The covid-19 pandemic and the war in Ukraine, responsible for triggering inflation and food insecurity, open up several opportunities in Latin America, such as clean energy and new technologies, according to a group of experts gathered this Monday by the research center. Atlantic Council in New York
In the debate “From Ukraine to the Americas: fortifying the recovery before global shocks”, organized on the eve of the opening of the UN General Assembly, the great annual meeting in New York, several experts gave clues for the future development of the region.
The range of opportunities is wide: manufacturing lithium batteries for electric cars – Argentina, Bolivia and Chile, the three main producers, are in the region -, producing semiconductors, creating health product chains, developing technologies to avoid food waste , or promote technologies to increase agricultural production.
The United States is working with Brazil, Argentina and Mexico to build pharmaceutical supply chains, and the production of medical supplies opens up opportunities to also work with Costa Rica, Panama or Canada, assured the undersecretary for economic growth, energy and the environment at the Department of American State, José W. Fernández.
Mexico is a candidate for manufacturing lithium batteries and Costa Rica for semiconductors, while Colombia offers significant manufacturing potential, he recalled.
For Martin Spicer, from the International Finance Corporation, it is also essential to focus on the digital economy, a sector in which the region lags behind other parts of the world, and services need to be lowered.
“It is up to us to try to take advantage of the opportunities”, said Fernández, after recalling that the region has other challenges to overcome inequalities and economic backwardness: improving the education system and eradicating corruption, which eats from “3% to 4%” of the region’s Gross Domestic Product (GDP).
But the most pressing problem at the moment is difficult access to food, which affects “270 million people” in the region, according to Fernández.
Something made worse by the covid-19 pandemic and the high food prices that the Russian invasion of Ukraine caused seven months ago.
In western Guatemala, the price of corn – a staple in the diet of the population – has risen by 50% and that of fertilizers by 200%, recalled Marcela Escobari, assistant administrator for the Latin America and Caribbean office at the US International Agency for Development.
And in countries like Haiti, the withdrawal of fuel subsidies has unleashed public anger.
Inflation is “a real challenge that complicates the situation left by the pandemic,” said Lisa Schineller, from A&P Global Ratings.
The region’s three main economies, Brazil, Mexico and Argentina, “have grown structurally less than they should,” and in the case of Mexico it is still below pre-pandemic levels, Schineller said.
And given the situation in the United States, the “very complex” global environment and the dynamics of inflation, the region will enter “into recession next year”, with possible exceptions, such as Guatemala or Costa Rica, which grew last year “more than than expected”.
The situation in the region will also be affected by financial problems, high interest rates and capital outflows, recalled the head of European diplomacy, Josep Borrell.
Both Borrell and Ukrainian Foreign Minister Dmytro Kuleba wanted to make it clear that the situation is not due to the sanctions that the international community has imposed on Russia, despite the “Russian narrative wanting to convince the world that the war and the blockade are Ukraine’s fault”.