Caribbean, Latin America need more state sector accountability - World Bank
Even as the Caribbean contemplates the mountain that it will have to climb if it is to ascend the lofty peak of the Sustainable Development Goals (SDGs) - a collection of 17 interlinked global goals designed by the United Nations General Assembly (UNGA) in 2015 to be a “blueprint to achieve a better and more sustainable future for all” - a new World Bank Report suggests that the region may be even further away from the realisation of those goals than might have originally been imagined.
While regional governments and multi-national organisations, governments, and international organisations are putting their heads together in pursuit of what many observers believe is the unattainable goal of realising the SDGs by 2030, the World Bank in a report released earlier this month, titled “Recovering Growth, Rebuilding Dynamic Post-Covid Economies Amid Fiscal Constraints,” says that the region must first tackle the socio-economic debris accumulated on account of the COVID-19 pandemic before it can focus on seeking to attain the SDGs.
The Bank’s prognosis that the socio-economic scars of the COVID-19 pandemic will likely take years to fade if countries in the hemisphere do not move immediately to further fuel a lacklustre recovery, puts into perspective what now appears to be a mountain to climb in order to reach the summit of the attainment of the SDGs.
Seeking to put the region’s prevailing socio-economic dilemma into statistical perspective, the Bank’s ‘numbers’ indicate that while regional growth is projected to recover at 6.3% this year, this will not be sufficient for most countries to completely recover from the 6.7% contraction that occurred in 2020, the year in which COVID19 struck in the region. What is even more worrying, according to the World Bank Report, is that growth forecasts for the region over the next two years suggest that overall regional growth will sink below 3%. This, it says, will take countries back to the low growth rates of the 2010’s, fuelling pre-existing fears of another lost decade of development for the region.
In the face of what the Bank appears to perceive as a ‘hard road to travel,’ it sets the region the task of moving without delay to seek to generate the kind of growth rates that would move the region forward and lessen social tensions. The recommended agenda, the World Bank report says, must include the implementation of “long-delayed but feasible reforms in infrastructure, education, health, energy policy, and innovation,” as well as tackling what it says are “new challenges” arising out of what is now a global climate change emergency.
“Countries in the region made enormous efforts to help families in the midst of the pandemic. Now, the challenge is to generate a robust recovery which provides job opportunities and heals the wounds of the crisis,” the Bank’s Vice President for Latin America and the Caribbean Carlos Felipe Jaramillo is quoted as saying.
From the Bank’s perspective the element of the stillglobal rampage by the COVID-19 pandemic remains the ‘x factor’ in the equation. Accordingly, it asserts that the persistence of the virus will affect growth while high private sector indebtedness may limit capacity to drive recovery while impacting debt limit potential for future government activity.
The report, meanwhile, urges the boosting of transparency and accountability in the state sector and the embracing of private sector discipline while advocating the rethinking of spending priorities, by among other things, better targeting subsidies to vulnerable populations, expanding property, and to a lesser extent income taxes, raising levies on unhealthy goods and carbon emissions, and improving tax enforcement in a region where average evasion rates for corporate income tax is almost 50 per cent.