Latin America draws up a future of accelerated sustainable economic growth with equity

Growth is the necessary condition for social and economic well-being, but this postulate can only take one path today: that of equity and sustainable development. For this reason, the immediate future of Latin America and the Caribbean is a mirror into which the rest of the world also looks. The region has the unavoidable urgency to accelerate an increase in its GDP, which this year will be 2.5%, below the global average. This objective, however, also involves a series of crucial challenges such as the energy transition, social cohesion, the fight against organized crime, and territorial integration. These are the underlying reflections that drive the International Economic Forum Latin America and the Caribbean, organized in Panama City by CAF —Development Bank of Latin America and the Caribbean, the PRISA Group, and World in Progress (WIP).

The first day of the conclave, attended Tuesday by some 1,500 participants, delved into the diagnosis and reviewed the challenges of an economic panorama in which concerns and hopes are mixed. From the political balances that threaten the region — the host president, José Raúl Mulino, has unequivocally defended the sovereignty of the Panama Canal in the face of threats from Donald Trump — to structural problems such as violence, which in addition to suffocating the population represents a monumental burden for public and private coffers. But also opportunities. As Sergio Díaz-Granados, executive president of CAF, stressed, this is a region “of solutions” that, in addition, has all the necessary resources to grow, recalled the president of PRISA, Joseph Oughourlian, while warning about the lack of “private savings and investment.”

The search for solutions was precisely the guiding thread of the forum, which has been compared to a “Latin American Davos” at various discussions. The question was repeated from panel to panel: how to get back on the path to growth? For various regional leaders and many of the 250 speakers from 15 countries convened in Panama, the answer can only be found in Latin America and the Caribbean, a kind of laboratory for the global economy. Based on this majority consensus, a path opens up to find formulas for growth.

“The fracture that is occurring in our societies is called the breakdown of consensus on reality, and from that breakdown it is very difficult to reach an agreement,” emphasized Pepa Bueno, director of EL PAÍS, in a conversation with economists and experts such as Carlos Felipe Jaramillo, vice president of the World Bank, or José Manuel Salazar-Xirinachs, executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC). But that consensus exists and is a fundamental starting point, as is the agreement on the need to increase productivity. “Development is not an ideological issue, it is neither right-wing nor left-wing. In a world as polarized as today’s, we only have to understand that states have a role, companies another, and each one has to do its part,” said Paraguayan President Santiago Peña.

“The issue is not just what is produced, but how it is produced,” said Secretary-General of the United Nations Conference on Trade and Development Rebeca Grynspan, who stressed “an essential triad for the region”: investment in infrastructure, digitalization, and capabilities. Stanley Motta, chairman of the board of directors of Copa Holdings, emphasized cooperation between the public and private sectors and the urgency of investing in decent jobs and quality education.

These perspectives were supplemented by a reflection on regional integration by former Italian prime minister Matteo Renzi. “Should Latin America and the Caribbean have a different relationship with Europe? Yes. But should it follow it as a model? I don’t think so,” he said, referring to the excesses of bureaucracy that sometimes obscure the path to the future. And this is a key moment in which Latin America has to focus on the future, both immediate and in the medium and long term. In a press conference at the end of the last presentation, Díaz-Granados warned that climate change is a burden on the development that the region seeks. “We have to prepare ourselves well for what is coming. Last year alone, the economic losses due to this crisis were around $7 billion,” he lamented.

CAF increased its portfolio by 15% between 2021 and 2024 and the bank’s analysts expect it to maintain the trend by another 5% this year. “We are the great piggy bank of Latin America,” Díaz-Granados joked. Asked about Trump’s return to the White House and the Republican magnate’s withdrawal from the Paris Agreement, the bank’s president was cautious: “The absence of such an important country as the United States clearly worries us, but we have to wait for the evolution of these decisions.”

Environmentalists are not the only ones who are tired of the major climate forums being reduced to waving the green flag. Panama’s Environment Minister Juan Carlos Navarro was very critical in one of the parallel sessions about the lack of “urgency” of decision-makers. “Scientists and environmentalists are looking for a way out of extinction while the world is being destroyed around us. There is a lack of urgency, including among those who are going to give presentations at the COP. Look what happened in Cali...” he said, alluding to the fact that COP16 was suspended without all the expected agreements being reached. “Welcome to the new reality; climate change is real. But are the solutions real and effective? I don’t think so,” he concluded.

For the minister, there are two essential solutions to alleviate the ravages of the climate crisis: stop destroying the planet and its biodiversity and speed up the transition to renewable energy. In 2024, Panama lost about $1 billion as a result of drought. “Although we are a carbon-negative country [absorbing more carbon than it emits], we are the first to pay the price,” he added. On Thursday, the debate will continue with the help of sociologist and climate change expert Jeremy Rifkin, retired United States Army General Laura Richardson, and Rachel Adams, founder and CEO of the Global Center for Artificial Intelligence Governance.

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