Latin American integration is one of the most present desires in the imagination of the region. Throughout history, it was a romantic idea that came close to reaching land, but it has been a difficult road, with countless obstacles in the way, with unbuilt bridges and borders to unite.
There are large deficits in infrastructure financing: while investment in transport infrastructure in the OECD (Organization for Economic Cooperation and Development) reaches 505 dollars per capita per year, the average for Latin American and Caribbean countries is of 87 dollars. These figures show the development opportunities that we are missing, and reflect the historical debt we owe to the region's aspirations.
But new winds have arrived in the region that can reverse this inertia and ensure that the integration of Latin America and the Caribbean becomes an engine of economic growth, social well-being, greater competitiveness and more transcendent leadership in global trends such as digital transformation, climate change, food security or migratory flows.
These airs originated in May of this year, when the Brasilia Consensus was announced and from CAF-development bank of Latin America and the Caribbean we began to work with the Government of Brazil and the BNDES (National Bank for Economic and Social Development) . The IDB (Inter-American Development Bank) and Fonplata, regional financial institutions, joined this initiative, showing that collaborative work is necessary to achieve sustainable development in Latin America and the Caribbean.
The result is the mobilization of up to 10 billion dollars in strategic integration projects, of which 3 billion dollars will be contributed by CAF. This is a collective effort between countries and international organizations to revive integration initiatives and promote infrastructure projects that facilitate trade and services between the countries of South America. These funds are part of the Integration Routes initiative, signed in Rio de Janeiro in the presence of Lula da Silva.
Only under this collaborative lens will we be able to overcome the large gaps we have in relation to other regions. For example, since the mid-1990s, only 15% of Latin American and Caribbean exports come from intraregional trade, while in Europe they account for 60%, in North America 45% and in the East and Southeast Asia 35%.
One of the main obstacles has to do with geography: we are mountains, desert, paramo, Andes, glaciers, Caribbean and Pacific. The leap in terms of integration is only possible with more and better physical, energy and digital infrastructure. In energy matters, for example, despite having a significant energy production capacity, we have not managed to connect South America with Mesoamerica or with the Caribbean.
Another challenge is reducing logistics costs. Trucks, for example, do not travel at the global average speed: in Europe they go at 80 km/h, and in Latin America and the Caribbean at 18 km/h. We are also conditioned by the current processes and dynamics of intraregional trade, such as a Mexico that is very connected to the United States in the north, a Brazil that can open up more to the region, and small and large countries that must connect more and better.
The situation at the borders (tariff and non-tariff barriers) is another of the bottlenecks of integration. In Argentina, Brazil, Chile or Colombia, the costs of technical measures, such as sanitary and phytosanitary measures or labeling requirements, are equivalent to tariffs of between 4% and 6%. Furthermore, at most border crossings in South America there is a double documentary and inspection control that increases the times and costs of crossing the borders.
We cannot approach Latin American and Caribbean integration in isolation or by waging war on our own. We need multidimensional visions and voices that help us better understand and value the benefits of a cohesive, coordinated and united region for the economic and social well-being of Latin Americans and Caribbean people.
#winds #integration #Latin #America #Caribbean