Three Opportunities for Latin America to Help Address Pressing Global Issues

Ilan Goldfajn, President Of The Inter-american Development Bank, Discusses The Potential for Latin America to Lead On Clean Energy, Food Insecurity, and Conservation

Key Takeaways

• Latin America ended a second decade of stagnant productivity in 2023, but the loss provides an opportunity for growth.

• Ilan Goldfajn, president of the Inter-American Development Bank, shared three opportunities for Latin America and the Caribbean to use the region’s resources to solve global problems.

• Taking advantage of Latin America’s resources will require collaboration and investment from the public and private sector.

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Latin America ended its second “lost decade”—a period of minimal productivity growth—last year. From 2014 to 2023, average annual growth hovered just below 0.9%, worse than the 1.3% rate during the first lost decade in the 1980s. However, the situation offers a potential “inflection point” for growth and global leadership in Latin America, said Ilan Goldfajn, president of the Inter-American Development Bank.

The IDB provides the main source of developmental financing for Latin America and the Caribbean and is focused on improving quality of life in the region. The IDB is made up of 48 countries, ranging from Argentina to Panama.

“What I see as a potential inflection point is the global challenges,” Goldfajn said at a recent event hosted by the Johns Hopkins School of Advanced International Studies at the Hopkins Bloomberg Center. “And it happens that those global challenges are very well suited for Latin America to be part of the solution.”

1. Boosting Clean Energy
The first opportunity, Goldfajn said, is providing clean energy to combat climate change. Latin America has one of the cleanest electricity sectors in the world, according to the International Energy Agency, with renewable energy generating 60% of the region’s electricity—twice the global average. Goldfajn sees this as an opening for Latin America to lead the globe in advancing clean energy and exporting its resources.

2. Meeting Global Food Insecurity
Goldfajn said Latin America could help solve the world’s growing food insecurity crisis. The COVID-19 pandemic more than doubled the number of food-insecure people around the world, according to the World Food Program, and the United Nations estimates there are around 735 million people currently facing hunger in the world. Continued high inflation rates are exacerbating this crisis.

Latin America and the Caribbean could help meet this need, as the region is a top global food supplier, exporting 40% of its food supply and accounting for 17% of total food exports worldwide. Top exports include poultry, soybeans, pork, fruits, and vegetables.

3. Protecting Nature and Biodiversity
Protecting the Amazon rainforest, which spans more than 2.5 million square miles across nine countries, is one of the most important defenses against climate change, Goldfajn said. It’s home to millions of animals, the largest river by volume, and stores more than 150 billion metric tons of carbon, according to Scientific American. Goldfajn says protecting the Amazon is a key way Latin America can help prevent climate change and protect the world’s essential resources.

Throughout his career, Goldfajn said, he has found that creating change and driving solutions comes from collaboration between academia, policymakers, and the public and private sectors. And he believes starting with the issues that everyone agrees on is one of the most effective ways to foster results.

For example, most people in Latin America agree on protecting the Amazon rainforest. Last year, the IDB approved a $300 million policy reform loan to support Brazil’s efforts to achieve net zero greenhouse gas emissions by 2050, including key protections of the Amazon. “It’s incredible how much we have passed in the last year after finding a consensus over [the Amazon],” Goldfajn said. “Everyone was excited, and together we’ve found incredible success so far.”

However, to recover from the “lost decade” and take advantage of these opportunities, the public and private sectors in Latin America and the Caribbean must work together to make key investments in these resources, Goldfajn said.

“For the first time in a long time, not only does Latin America need the world, but … all of the world needs Latin America,” he said.

Text originally published here