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Iglesias: IDB will support Latin American countries to define strategies for competitiveness

SANTIAGO, Chile - The Inter-American Development Bank will help the countries of Latin America and the Caribbean define strategies for competitiveness agreed upon by governments, the private sector, and civil society, IDB President Enrique V. Iglesias said today.

Inaugurating a two-day seminar on the Road to Competitiveness organized by the Economic Commission for Latin America and the Caribbean (ECLAC) and the IDB, Iglesias said that while Latin America had carried out far-reaching reforms over the past decade that allowed it to recover economic stability and democratic governance, its countries still face major challenges.

"Among those challenges is the issue of our economies’ ability to compete," he said. "We must acknowledge the fact that Latin America’s links with the international markets are still based largely on commodity exports; about 70 percent of our exports are primary goods."

This fact implies that the region continues to depend on exports which are vulnerable to wide price fluctuations.

Iglesias said that the IDB would work with ECLAC and other international institutions to help Latin American and Caribbean countries develop strategies that will allow them to compete more effectively in world markets.

The Bank expects to launch a broad cooperation program that will offer technical assistance as well as support for the national dialogues where competitiveness strategies are forged by all sectors of society.

The IDB’s Research Department is already working with the World Economic Forum to extend to Latin America and the Caribbean the international competitiveness indicators of the World Competitiveness Report, the leading international monitor in this field.

Competitiveness will also be the focus of this year’s Report on Economic and Social Progress prepared by the Bank’s Research Department.

Competitiveness has become an issue of primary concern for Latin American countries, which are becoming increasingly integrated into the world economy. While this process of integration is essential to achieve growth, and although the international markets represent a source of demand that is more dynamic than domestic markets, trade liberalization alone is not enough to achieve favorable rates of growth and needed structural change.

Latin American growth rates continue to be lackluster, far below those achieved by Southeast Asia, a region that inspired many of the reforms that were carried out in the last decade in Latin America.

The seminar held at ECLAC opened a series of forums prior to the Annual Meeting of the IDB Board of Governors, which will take place next week in the Mapocho Station Cultural Center in Santiago.

During the first day of the seminar the participants were to analyze mesoeconomic and microeconomic aspects of competitiveness on the basis of studies undertaken by CEPAL on sector productivity trends in Latin American countries. They were also to discuss the importance of sector policies in developing new competitiveness by encouraging technological innovation and utilizing factors such as information and knowledge to increase productivity.

During the second day of the seminar panelists will focus on the institutional aspects of competitiveness from the macroeconomic standpoint on the basis of studies by the Research Department of the IDB. The participants will discuss the impact of legal and regulatory frameworks in removing obstacles to competitiveness, such as scarce financing and deficiencies in key services, including electricity, telecommunications and transportation.

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