Argentina is one of the largest economies in South America. In recent years, the government has focused in promoting economic development along with social inclusion with the support of the World Bank.
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Stronger and Broader Integration Key to Revert Region’s Lag in Global Trade LIMA, May 19th, 2015 – Back in the 1980’s, trade ties for Latin America and the Cari... Show More +bbean were very similar to those of East Asia -- thin and focused on a single key player in the North, United States and Japan, respectively. Today, East Asia’s trade network is much denser and productive, crisscrossing among its countries and extending to the north. In contrast, Latin America’s remains narrow and dominated by the United States, followed at a very distant second by Brazil.The World Bank’s latest flagship report for the region, “Latin America and the Rising South: Changing World, Changing Priorities” launched here today, provides an in-depth look at these global connections in trade and finance, and a sober assessment of their promise and trials for the region.The global economic landscape has experienced tectonic shifts that have left the old north-south hierarchy behind. In the past four decades, the gross domestic product (GDP) of the South doubled to about 40 percent of the world’s total, the share of global trade from the South also doubled to 51 percent and its share of global capital inflows nearly tripled to 50 percent. Within a decade the expectation is that the share of the developing world in global GDP will be higher (55 percent) than that of the North.“The rise of the South has left a noticeable mark upon the world economy. But this unquestionable impact conceals important differences among the countries of the South,” said Augusto de la Torre, World Bank Chief Economist for the region.“The differences between the wealth of connections from Asia, compared to those of Latin America, suggest that our region is still not benefitting from the virtuous circle created by integrating more with your neighbors and then with the world.” The report finds, for instance, that between 2000 and 2012, the South’s share of global manufacture exports increased from 32 to 48 percent but most it due to China. In fact, China’s share increased by more than 10 percentage points while the share of the other top 20 manufacture exporters from the South - which include Brazil and Chile - increased by only 8 percent in total. What’s more, for some countries in the South, including Mexico, it actually decreased.Also significant is the fact that East Asian countries participate much more actively in cross-country production networks, known as Global Value Chains (GVCs), than most Latin American countries. In fact, the report finds that Latin American countries tend to integrate to GVCs only at the beginning –as exporters of raw materials- or at the end – as manufacturers of final goods – and not in the middle, a “sweet spot” that provides the most potential growth gains.“The initial force from the global South’s emergence -- and in particularly the China-led commodity boom -- brought tremendous economic and social gains to Latin America. Today, however, as that force wanes, it is more pressing for Latin American countries to become better players in this transformed landscape,” said De la Torre. “What we have learned so far is that it is not enough to have global trade or to receive foreign direct investment. There is more to be done to take full advantage of that trade and investment.”More precisely, Latin America and the Caribbean will need to find ways to improve its human and physical capital as well as its technological capacity and business environment. To that end, the report points to three policy areas for policymakers to consider in this transformed global environment that calls for a rethinking of priorities:Allowing economic flexibility in labor and capital reallocations so that labor and capital can find their way into the most productive sectors.Learning through international trade and investment so that the region does not underutilize its cross-border commercial and financial connections with neighbors and other partners.Raising saving rates to help enhance trade diversification by reducing overvalued currency that makes exports less competitive.All these crucial reforms, the report concludes, will require deft political leadership. But it argues that this irreversible change in the global economy is a unique opportunity for Latin America to unleash its growth potential once and for all.For more information on the World Bank's work in Latin America and the Caribbean: www.worldbank.org/lacVisit us on Facebook: http://www.facebook.com/worldbankBe updated via Twitter: http://www.twitter.com/BancoMundialLACFor our YouTube channel: http://www.youtube.com/worldbank Show Less -
ChallengeDespite the province of Córdoba’s contribution to Argentina’s recovery and rapid economic growth following the 2001 crisis, few resources were available to maintain and extend the province’s ... Show More +road network. This led to a severe maintenance backlog, which threatened Córdoba’s growing agriculture and tourism sectors. In 2003 the provincial road sector budget amounted to US$ 26 million at a time when the minimum financial need was estimated to be US$ 80 million. Addressing the most urgent needs in rehabilitation and paving would allow the province to enhance competitiveness and prevent the road infrastructure from becoming a bottleneck to further growth.SolutionThrough the Cordoba Road Infrastructure Project, the World Bank supported the provincial government’s use of performance based rehabilitation and performance contracts, known by their Spanish acronym, CREMA. These contracts have the advantage of committing funds upfront for routine maintenance over an extended period of time, instead of depending on stop-and-go funding for maintenance.The project partnered with the Ministry of Finance on institutional interventions to improve the quality of provincial expenditures through better project management, monitoring, and evaluation. In addition, the project provided technical assistance to enhance the capacity of the Provincial Directorate of Highways to prioritize and optimize investments through the development of an efficient road network management strategy. The objective of this strategy is to expand and maintain in good condition the road network. Finally, the project collaborated with the provincial government on the comprehensive Road Safety Plan and provided equipment to the Provincial Highway Patrol, which helped to reduce deaths caused by traffic accidents on provincial roads.ResultsUnder the CREMA modality, the project financed the paving of 125 km of provincial roads and covered the rehabilitation and maintenance of another140 km of provincial roads. The project’s support for institutional development helped to consolidate the basic building blocks for a performance-based culture in provincial administration.Some of the projects additional outcomes include:Employment generation opportunities increased with new local commercial and agro-industrial centers.Access to 38 education centers and 20 health centers improved, with a more permanent presence of medical personnel.Mobility and access increased on the order of 120 percent, especially in heavy goods vehicles and more frequent public transport.Improved road safety conditions and enforcement mechanisms led to reductions in the mortality rate on provincial and national roads.Bank Group ContributionThe Bank was a key partner in road safety efforts through technical assistance, knowledge exchange, and cross-fertilization of experiences. The Bank provided financing of US$75 million over the seven-year project implementation period. Also, the project received two grants from the Global Road Safety Facility to finance an International Road Assessment Program survey and a Capacity Assessment Review.PartnersProject implementation required a strong partnership between the Bank and the Provincial Ministry of Finance, Ministry of Public Works, the Agency for Investment and Financing, Provincial Directorate of Highways, and the Ministry of Government’s Directorate of Road Accidents Preventions (DPAT). All institutional strengthening activities were carried out with the government’s resources and in-house capabilities. Local counterpart financing was US$ 21.54 million. This partnership created a productive synergy between the DPAT, the Road Safety National Agency and the Global Road Safety Facility, and led to the successful development of a provincial road safety plan.Moving ForwardThe Bank foresees no further operation, except for the completion of CREMA contracts under execution as part of the Provincial Roads Project II. The Cordoba Provincial Directorate of Highways has developed its own road maintenance contracts known as “contratos de cobertura,”which are awarded to contractors to provide maintenance services on a certain number of kilometers of road. These contracts have the same objective of CREMA contracts of committing funds upfront for routine maintenance over an extended period of time instead of depending on stop-and-go funding. Provincial Law No. 10,081 ensures financial sustainability of the road maintenance projects by imposing a fuel levy, which is expected to bring in revenues of about US$ 100 million per year.BeneficiariesBy improving the condition of provincial roads, local users and road transport services directly benefited from the decreased transport costs and upgraded road safety.Also, the project enhanced access to social services and markets for rural communities. For instance, by paving a 27.2 km road the project facilitated access to the town of La Cumbrecita, one of the province’s cherished tourist attractions.“The construction of the bridge and pavement of the road that connected our town with Villa General Belgrano and other bigger cities have a high positive impact, because now we can have easier access to supplies, faster emergency care, and also expand special educational courses for kids, like language and music classes.” Emilia Galeano (local business owner, La Cumbrecita) Show Less -
Managing their own activities – without waiting for a manager or someone else to tell them what to do – and dividing profits are also new experiences for them. Curiously, Moana claims that her income ... Show More +has declined. Previously, she made about R$1000 every 15 days whereas today she earns between R$600 and R$900. In Parelhas, the financial blow is even greater: collectors obtain an average of R$215 per month, which they complement with the Bolsa Familia social program and food baskets distributed by the city.Dreams for the future“Nevertheless, life as a collector does not compare with that of working in dumps. I was very isolated, very aggressive, because I couldn’t stand the way collectors were humiliated. Today I like to go out, talk and visit with my colleagues. And I returned to school,” says Ednalva.She added that over time, more people will realize how important collectors are for the environment. “Everywhere we go, there are no longer people tearing bags open to collect what they want and leaving the rest of the garbage on the sidewalk.”The possibility of increasing incomes depends on the associations’ ability to expand their area of operation. None can cover the whole city with the infrastructure currently available.This may soon change, however, through the Río Grande do Norte Sustentavel Initiative, which is supported by the World Bank and implemented by the state government. With project funds, associations will be able to build their own warehouses and buy equipment to process more recyclable materials. They will also receive technical assistance and business management training.“Investments will transform these individuals into real social-environmental business owners,” says Fatima Amazonas, project manager at the World Bank.This effort in the two cities is being replicated in other parts of Latin America, including Argentina and Peru. There is still much to do, however: of the 15 million people worldwide who make a living collecting recyclable materials from the garbage, four million live in Latin America. Of these, at least 75% work in unsanitary conditions. It is estimated that in Brazil alone, there are between 500,000 and 800,000 of these collectors. Show Less -
In Peru, Jim Yong Kim highlights initiatives aimed at improving educational quality as a way to combat extreme poverty and promote shared prosperityLIMA, May 7th, 2015 – The President of the World Ban... Show More +k Group (WBG), Jim Yong Kim, today highlighted Peru’s efforts in delivering quality education to poor and vulnerable students, and called for further progress as a way to eradicate extreme poverty and promote shared prosperity among more Peruvians. President Kim travelled to Peru as part of the Road to Lima, a knowledge exchange initiative that highlights development milestones in advance of the World Bank Group and International Monetary Fund Annual Meetings that will take place in Lima next October.President Kim traveled with the President of Peru, Ollanta Humala, and the Minister of Education, Jaime Saavedra, to the Pasco region to meet with recipients of Beca 18 scholarships and students at a high-performance school in Chontabamba in Oxapampa Province. He talked with the students about their educational experiences and the importance of access to quality education for all Peruvians at all levels.President Kim told the students and school authorities present at the meeting that the schools can “help Peru innovate to improve student performance and teacher training and evaluation,” and contribute to a “better future for Peru” because “better learning outcomes help to build a competitive labor force, to create jobs and to promote inclusive economic growth.” High performance schools offer outstanding poor students the opportunity to attend a boarding school-type institution that provides quality educational instruction and resources to develop their skills. The Beca 18 program helps low income youth access higher education. Both initiatives provide disadvantaged students new opportunities to compete in an increasingly global labor market.Following the visit, President Kim and President Humala talked to the press in Oxapampa, and highlighted Peru’s economic progress. Thanks to a transparent and prudent macroeconomic framework, Peru has managed to stabilize and strengthen its economy.“This impressive and improving track record shows that Peru has much to share with the world about promoting development. This is just one reason why it’s a natural fit to host our Annual Meetings in October. Between now and then, we’ll continue to work closely with the Government on the Road to Lima, a knowledge initiative that, among other things, showcases to the world what Peru, Latin America and the Caribbean countries have taught us about doing development right,” Kim said.This is Kim’s second visit to Peru as President of the WBG. As an infectious disease doctor, Kim worked extensively in the country early in his career. His goal was to provide high quality health services to poor communities close to Lima. His practice included a focus on patients with multiple-drug-resistant tuberculosis. Jim Yong Kim will return to Lima in October to be part of the Annual Meetings of the World Bank Group and the International Monetary Fund.-----------------------For more information on the World Bank's work in Latin America and the Caribbean: www.worldbank.org/lacVisit us on Facebook: http://www.facebook.com/worldbankBe updated via Twitter: http://www.twitter.com/BancoMundialLACFor our YouTube channel: http://www.youtube.com/worldbank Show Less -
Jim Yong Kim will visit education initiatives with President Ollanta Humala in the Pasco region. His trip is part of the “Road to Lima” program in advance of the World Bank Group’s Annual Me... Show More +etings in Lima in October. LIMA, May 6, 2015 - The President of the World Bank Group (WBG) will visit Peru on May 7th, 2015, to observe the country’s progress delivering quality education to poor and vulnerable students. President Kim will travel with President Ollanta Humala and Education Minister Jaime Saavedra to the Pasco region to meet with recipients of “Beca18” scholarships and students at a high-performance school in Chontabamba in Oxapampa Province. President Kim and President Humala will give statements to the press upon completing their visit to the school.High-performance schools offer outstanding poor students the opportunity to enter a boarding institution that provides quality educational instruction and resources to develop their skills. The Beca 18 scholarship program helps low-income youth access higher education. Both initiatives provide disadvantaged students new opportunities to compete in an increasingly global labor market.President Kim’s visit is part of the “Road to Lima” program taking place in the lead up to the Annual Meetings of the World Bank Group and International Monetary Fund (IMF) in Lima, Peru, this October. The Road to Lima is a knowledge sharing initiative involving conferences and other activities that highlight development milestones that are essential for emerging economies in the 21st century, from equitable growth, quality education and jobs to efforts to address citizen insecurity. President Kim will return to Lima for the meetings.This is Dr. Kim’s second visit to Peru as President of the World Bank Group. In June 2013, he traveled to Lamay in the Cusco Region where he emphasized the importance of quality education to ending extreme poverty and increasing opportunities for all in Peru and in Latin America. President Kim, an infectious disease physician, worked extensively in Peru early in his career. He aimed to provide top quality health services to poor communities near Lima. His practice included a focus on patients suffering from multi-drug resistant tuberculosis. Show Less -