Every exercise of business hope in Latin America, the region of the world hardest hit by the pandemic, leads to the contradiction of a singular prognosis: that of the lost decade. After five years of extremely low growth and now a deep recession from which, according to different economic estimates, we will not recover in per capita terms until 2025, its possibility is more than a mere prophecy. And fighting against it, therefore, a task of the first order.
In the framework of the Ibero-American Summit, I had the opportunity to share with the business community of the region four reasons to think about a different decade: rescued and redeemed. The first is the lesson in digital technologies that we all had (business, civil society, universities and governments) thanks to the pandemic. From telemedicine to teleworking, from e-commerce to the e-learning, we saw years of progress in just months and with it promises of innovation, digitization and productivity within our reach if we manage to close the prevailing gaps of inequalities and access.
The second is what is happening in the area of sustainability. This recovery will be very different from the previous one. The world will delay in being austere and will invest like never before, internalizing also social, environmental and governance criteria. This will benefit the commitment to a green economy and to the renewable and sustainable infrastructure sectors, where Latin America has much to gain. We have pioneering companies, a population concerned about climate change, and the world’s largest reserves of water and essential minerals (such as lithium) needed for new value chains.
The third reason is China and the United States. Following this pandemic, it is estimated that by 2028 China will become the world’s leading economy. To do this, its economy will have to double, adding $ 15 trillion to world GDP in just eight years, the highest gross growth in history. This may lead us to another raw materials supercycle, especially benefiting South America. At the same time, the region will be able to take advantage of the acceleration of North American growth as a result of the impressive fiscal packages of the Biden Administration, as well as the phenomenon of the reshoring.
The last reason for optimism is our youth and our women. Latin America’s “great demographic bonus” —the largest and best-educated cohort we’ve ever had — is old enough to vote en masse, transform institutions, and even be president (or better: president). Young people demand a voice, fairness and leadership, as well as better job prospects, more training and fewer skills gaps in their environment.
There are, however, several factors that can ruin this panorama and that we could summarize in four “shortcomings”: vaccines, financing, social dialogue or leadership. We need vaccines to openly begin the recovery and financing so that there is no lack of resources to make transformations and essential investments: these two “obstacles” do not depend only on us, but also directly involve multilateral institutions, without which all efforts will be insufficient, such as as emphasized in the Ibero-American Summit of Heads of State and Government.
But the last two obstacles are purely ours: dialogue to regenerate politics, remake the social pact and prevent the new electoral cycle from leading to an increase in polarization, mistrust or populism. For this, we need leadership at the height of the times, not only in the political system, but also in the business sector and in civil society.
This complex panorama explains the three things that I have recently had the opportunity to see in the region’s business community. First, awareness of risks and opportunities. Second, presence: nobody wants to leave Latin America because new horizons are being forged in the region (Softbank, for example, our largest technology investor, has just announced that it will invest $ 1 billion more this year). And third, commitment: the desire to do things differently, to go beyond the bottom line, to rebuild public-private partnerships and to assume responsibilities in the fight against poverty and climate change. Consciousness, presence and commitment. In times of uncertainty, what matters is not whether the omen is bad or good. What matters is with what spirit we approach it. Because the answer will always be in our hands, the ability to avoid a new lost decade and to fight against all odds.
Rebecca Grynspan She is the Ibero-American Secretary General.