ECLAC: The private sector is to be an agent of change for the productive transformation of the Latin American and Caribbean economy

The private sector is to be an agent of change for the transformation of the economy of Latin America and the Caribbean towards a more productive, inclusive and sustainable development of the region, playing an even more important role in the framework of productive economic policy development. Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), José Manuel Salazar-Xirinachs, stated on Friday, June 28, at the launch of the Regional Dialogue: “The role of the private sector in the new vision of Productive Development Policy (PDP) in Latin America and the Caribbean.”

“To escape the low-growth trap in Latin America and the Caribbean, it is crucial that countries scale up and improve their productive development policies. There is a completely new paradigm about what these policies are and how to design them, and this is what we are promoting at ECLAC,” explained José Manuel Salazar-Xirinachs at an event organized by ECLAC, the International Organization of Employers (IOE) and the International Labor Organization (ILO).

ECLAC’s highest body explained that “we are talking about productive development policies that prioritize proper governance processes and collaboration between key stakeholders. This means PDPs, understood primarily as collaborative efforts between the public sector, the private sector, academia and civil society, aimed at identifying and eliminating bottlenecks that may limit productive transformation, along with initiatives that would boost economic growth, productivity and competitiveness.”

“The private sector is already participating in productive development policies in many of our countries and territories and there are many successful cases. However, we are convinced that entrepreneurs and their representatives could play an even more important role in this policy,” emphasized José Manuel Salazar-Xirinachs during the opening session of the event, which was attended by government officials, representatives of business associations from the countries of the region and specialists from international organizations.

In addition to contributing to the development of PDPs, to ensure greater relevance of these policies, the private sector should co-lead cluster initiatives, invest more in research and development (R&D) and generate new activities that would diversify economies, a senior official identified during the presentation entitled “The Transformation of the Development Model of Latin America and the Caribbean and the Role of the PDP.”

Similarly, large companies could act as “anchor companies” to increase the productivity of their suppliers, as well as support the international integration of other companies based on their capabilities and distribution channels, he stressed.

According to José Manuel Salazar-Xirinachs, “we need to support sectoral efforts. It is important for countries to work with the private sector in specific sectors through public policies. ECLAC has identified a portfolio of sectors that can drive a major productive transformation in Latin America and the Caribbean.

The opening session also saw speeches from Roberto Suárez Santos, Secretary General of the IOE, and Ana Moreira, Regional Director of the ILO for Latin America and the Caribbean, followed by a presentation by the Director of Public Policy of the Confederation of Production and Commerce (CPC) in Chile, Javier Irarrázaval, on the main findings of the ILO’s 2023 report on increasing productivity in Latin America.

IOE’s Roberto Suárez Santos confirmed that “effective private sector collaboration that can make an impact is linked to national and global policy change. There is no point in large multinational corporations committing resources to, for example, training young people or strengthening AI integration if there are then no policies, regulations or institutions to support and integrate it.” He added: “We believe it is important for the private sector to show leadership. We cannot allow ourselves to be carried away by an absolutely negative approach. We must navigate these complex waters with a depoliticized approach.”

Meanwhile, Ana Moreira, ILO Regional Director for Latin America and the Caribbean, stressed that the current context of low growth and stagnant productivity requires that “the region seeks options to improve and scale up productive development policies in partnership with society and the private sector, workers, academia and civil society. Business organizations are fundamental and can actively contribute to the design, implementation and management of these new and necessary productive development policies.”

During his presentation, José Manuel Salazar-Xirinachs also emphasized that social dialogue is a key instrument for managing and steering the transformations that the region needs. “It is important not only to have a dialogue on labor issues, but also on macroeconomics, productive development and territorial development,” he said, announcing that in September ECLAC will publish a new, emblematic report on productive development policies in Latin America and the Caribbean, aimed at will be an annual publication.

During five panel discussions, event participants shared positive experiences related to the participation of the private sector in public-private governance spaces in solving strategic problems such as sustainable development, bridging talent gaps, creating and disseminating technologies and knowledge, and territorial productive development.

The regional dialogue was attended by representatives of business groups, government authorities and specialists from Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Paraguay and Peru.