Latin American Economic Outlook 2019

Development in Transition

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Latin America and the Caribbean has seen a remarkable socio-economic progress since the beginning of the century. Countries strengthened their macroeconomic situations, living standards improved, and poverty and inequality declined. Yet, large structural vulnerabilities remain and new ones have emerged. Many of these are linked to countries’ transition to higher income and development levels. The Latin American Economic Outlook 2019: Development in Transition (LEO 2019) presents a fresh analytical approach to the region’s development trajectories. It assesses four development traps relating to productivity, social vulnerability, institutions and the environment. It outlines local opportunities for responding to these traps and seeks ways of improving the interactions and interlinkages between global public goods and national development agendas, all in the context of the United Nations 2030 Agenda. LEO 2019 calls for improving domestic capacities and adopting a new vision of international co-operation as a facilitator to support efforts to achieve sustainable development for all throughout the region.

English Also available in: Spanish

The “new” development traps

There are different symptoms that suggest that Latin American and Caribbean (LAC) countries are facing a number of “new” development traps that act as a barrier to further inclusive and sustainable growth. While these traps reflect some longstanding issues, they are new – or increasingly important – in the sense that they are also the result of progress towards higher income levels, which is surfacing – as well as creating – new development challenges. This highlights the relevance of the “development in transition” approach for LAC. These development traps are vicious circles that limit the capacity of LAC countries to move towards greater levels of development. This chapter highlights the existence of four main development traps: the productivity trap, the social vulnerability trap, the institutional trap and the environmental trap. These interlinked traps are particularly relevant in a rapidly changing global context, which poses new and increasingly complex challenges. Overcoming these traps and turning these vicious circles into virtuous circles will set LAC on a path of greater sustainable development and higher well-being for all.

English Also available in: Spanish


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