Countries of the Region Urge for Rethinking the Financing Agenda for a Sustainable and Egalitarian Recovery

The current crisis must be harnessed as an opportunity for rethinking the financing agenda for the development of middle-income countries, such as those in Latin America and the Caribbean. This is the time to achieve a broad social and political consensus that would enable implementing ambitious reforms with the aim of forging a process of sustainable and egalitarian construction for the future, the representatives of Latin American and Caribbean countries gathered at the thirty-sixth session of the Committee of the Whole of the Economic Commission for Latin America and the Caribbean (ECLAC) concurred today.

Participating in the meeting, which took place today at the United Nations' headquarters in New York, were representatives from 37 Member States of ECLAC and 3 associate members, who approved the Commission's program of work for 2023 and reaffirmed its role as an essential component of the UN system, with a view to achieving sustainable development along its three dimensions - economic, social and environmental - in a balanced and integrated way, regionwide.

The event was inaugurated by Rodolfo Solano, Minister of Foreign Affairs and Worship of Costa Rica, in his capacity as Chair of the Committee of the Whole of ECLAC, along with Alicia Bárcena, the Commission's Executive Secretary, and it featured special remarks by Maria Luiza Ribeiro, Chef de Cabinet of the Executive Office of the United Nations Secretary-General, António Guterres.

In his opening remarks, Costa Rica's Foreign Minister, Rodolfo Solano, affirmed that ECLAC is an unconditional ally of Latin America and the Caribbean in articulating efforts to better address challenges and make progress on the Sustainable Development Goals (SDGs).

"Costa Rica has worked very closely with the Commission to achieve more inclusive and equitable societies," he expressed.

Maria Luiza Ribeiro, meanwhile, emphasized that ECLAC's work has put special attention on the effects of COVID-19 and on the structural causes of inequality, poverty and exclusion, in line with the 2030 Agenda for Sustainable Development.

In her remarks, Alicia Bárcena pointed up Costa Rica's leadership as Chair of the Committee of the Whole of ECLAC. In addition, she reported on the Commission's activities in 2020 and stressed that, despite the pandemic prompted by COVID-19, the mandates that countries had given ECLAC have been fulfilled.

On this occasion, the senior official presented the document An innovative financing for development agenda for the recovery in Latin America and the Caribbean, prepared by ECLAC at the request of the Government of Costa Rica.

"COVID-19 has demonstrated the need to address the problem of financing for development in middle-income countries. The pandemic has worsened the structural problems of Latin America and the Caribbean in relation to investment, productivity, informality, inequality and poverty," Alicia Bárcena underscored in her presentation.

She recalled that Latin America and the Caribbean is currently the most indebted region in the developing world. Gross general-government debt averages 77.7% of regional GDP, although in some cases it exceeds 100% of national GDP, and the total debt service represents 59% of the region's exports of goods and services.

"The high level of indebtedness resulting from lower tax collection, along with the increase in current transfers to support households and businesses, has increased countries' liquidity needs, despite the considerable heterogeneity of their fiscal situation and debt vulnerability. This situation has reduced the fiscal space for implementing countercyclical policies, undermining the capacity of countries to build a better future," the Executive Secretary of ECLAC affirmed.

The report proposes an innovative financing for development agenda for the region's recovery based on five policy actions: i) expand and redistribute liquidity from developed to developing countries; ii) strengthen regional cooperation by enhancing the lending and response capacity of regional, subregional and national financial institutions, and strengthening their linkages with multilateral development banks; iii) carry out institutional reform of the multilateral debt architecture; iv) provide countries with a set of innovative instruments aimed at increasing debt repayment capacity and avoiding excessive indebtedness; and v) integrate liquidity and debt reduction measures into a development financing strategy aimed at building forward better. On this last point, the document cites the example of the Caribbean Resilience Fund, a trust fund established as a public-private partnership geared towards financing strategic interventions throughout the Caribbean to alleviate the difficulties affecting the subregion.

In their resolutions, the member countries of the Committee of the Whole acknowledged ECLAC's efforts to ensure the continuity of its operations and the availability of its products and services, considering the challenges imposed by the COVID-19 pandemic, and they reiterated the Commission's role in supporting the implementation of the 2030 Agenda, as well as in the regional and global response to achieve a sustainable, resilient and inclusive recovery from the pandemic.

Furthermore, the Member States approved the change converting the Committee on South-South Cooperation into the Regional Conference on South-South Cooperation in Latin America and the Caribbean, which will become a subsidiary body of ECLAC that will contribute to supporting Member States on south-south and triangular cooperation initiatives.

Finally, they ratified that ECLAC's thirty-ninth session will take place in 2022 in Argentina.

In the framework of the meeting, Alicia Bárcena announced that she and UN Secretary-General António Guterres have agreed that her tenure at the helm of ECLAC's Executive Secretariat will officially conclude on March 31, 2022.

Via video, the Secretary-General, António Guterres, praised Alicia Bárcena's "stellar leadership" at the head of ECLAC, an institution where she led "a progressive and visionary administration."

Meanwhile, the ambassadors present at the meeting expressed gratitude and appreciation for the work carried out by Alicia Bárcena, to whom they gave a standing ovation, wishing her the very best at the end of her mandate.

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