A deeper economic integration among Latin American countries will make the region more competitive in international markets and boost long-term growth, according to a new World Bank report.
Better Neighbors: Toward a Renewal of Economic Integration in Latin America argues that a renewed integration strategy that takes advantage of the synergies between regional and global economic integration can contribute to growth with stability. This is particularly relevant for a region that is just coming out of two years of recession.
“Regional economic integration offers a way forward to reactivate the economic growth needed for reducing poverty and boosting shared prosperity,” said Jorge Familiar, World Bank Vice President for Latin America and the Caribbean. “A more robust regional integration will make the region more competitive globally. Effective integration will require investment in infrastructure, connectivity and logistics, which will offer an additional boost in economic growth.”
Latin America has been pursuing regional integration since the 1960s with efforts intensifying since the mid-1990s. But regional exports remain at 20% of total exports, much less than the 60% and 50% regional exports in the European Union and East Asia Pacific, respectively.
The World Bank report proposes an “open regionalism” that reaps unexploited synergies between regional and global economic integration, on the premise that pro-growth integration with the world cannot be achieved without first strengthening the region’s own neighborhood. To do so, the report lays out a five-pronged strategy…
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