The only way to boost economic growth in Latin America is through a new political pact that encourages private investment in the region, experts agreed in a forum organized by the Economic Commission for Latin America and the Caribbean (ECLAC).
During the XXXVI Regional Seminar on Fiscal Policy, a group of academics and representatives of regional organizations debated the fiscal situation in Latin America, the havoc left by the covid-19 pandemic and the challenges ahead.
Daniel Titelman, director of the Economic Development Division of ECLAC, emphasized that the great challenge for Latin American countries is to improve their fiscal policy and attract greater investment, for which it is necessary to think about tax reforms with a medium and long terms.
An example of the region’s challenges, he said, are the challenges posed by climate change, for which investments ranging from 3 to 16 points of the gross domestic product are needed each year.
Other specialists from the International Monetary Fund, Inter-American Development Bank and Organization for Economic Cooperation and Development highlighted that the pandemic opened a space for several countries to improve their fiscal consolidation thanks to the fact that spending as a percentage of GDP remained stable. However, they indicated, this is still 6 or 7 points higher than prudential levels.
In his participation, Juan Carlos Moreno-Brid, economist and researcher at UNAM, highlighted that the fiscal consolidation of the region must be sought with a medium-term vision, focused on investment.
However, he warned, the great challenge is a fiscal pact, since governments can convince or even force companies to pay taxes; However, it is not possible to force them to invest in the countries.