The first South American country to join the OECD, Chile is one to the fastest growing Latin American economies. But despite making considerable progress in reducing poverty, inequality is still a massive challenge needing to be faced.
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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 -
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 -