ASUNCIÓN, PARAGUAY, 12 August 2009: Among the many effects of the global economic crisis, there is one that is key, but usually ignored: the return of politics in shaping the future of Latin America and Caribbean, said Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC).
Bárcena spoke during an international seminar on social policies in times of crisis held in Asunción, Paraguay.
– The future is built with ideas, with a long-term, strategic perspective, and broad political and social agreements that make viable the path of development and offer democratic governance in our countries, she said.
According to Bárcena, the current global financial crisis has put an end to the 25-year illusion that the market resolves everything, opening new avenues for debating economic, social and environmental issues.
In her view, the region should seek a new balance between the state, the market and citizens, and as a result, the creation and renewal of public and private, solidary and communitarian institutions.
Underlying this task, believes Bárcena, is the need for a stronger state based on a more solid “fiscal agreement” that may give way to political agreements on the level, composition and trend of public spending and its financing.
– Social spending levels are conditioned by a country’s tax collection capacity, and our region collects little, stated Bárcena.
She underscored the importance of social spending in times of crisis, recalling that while it took 14 years to recover pre-crisis growth levels after the 1980 crisis, it took 25 years for the region to attain pre-crisis poverty levels (40.5%).
Several countries in the region have put in place social assistance policies, such as conditional transfer programmes, which have great potential to mitigate poverty and curb the strong impact of the crisis on low-income sectors and human capital. Bárcena warned, however, that the percentage of GDP and of social expenditures allocated to these projects continue to be very low.
Kilde:www.eclac.org
