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Alicia Bárcena Executive Secretary Economic Commission for ...

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  • Las rectas punteadas en la parte derecha del gráfico son las tasas de crecimiento promedio anuales del PIB per capita entre 1990 y 2008 en: AZUL: Asia (6 países) : 4.1% (no son todos los países en desarrollo, solo Asia emergente) VERDE: Mundo: 2.0% América Latina y el Caribe (19 países): 1.7%
  • The productivity gap between Latin America and the United States broadened considerably from 1990 to 2007, as shown in figure 2 by the very slight shift in the productivity lines (horizontal axis of the figure) for Latin America and a much larger shift in the case of those for the United States. (The horizontal arrow for Latin America, compared with that corresponding to the United States, illustrates the productivity gap.) As can also be seen in figure 2, in Latin America natural-resource-intensive sectors continued to account for a major component of value added in total output during this period (vertical axis), and it was in this sector that productivity rose the most (horizontal axis). By contrast, in the United States the value added of engineering-intensive sectors (vertical axis) increased sharply, and this sector accounted for the largest portion in the increase in productivity. This specialization in natural resources led to a rising demand for energy, given the high energy consumption of natural-resource-intensive sectors. The adverse effect of this has been twofold: energy consumption per unit product has risen in comparison with that of the United States and other industrialized countries and, simultaneously, the region has failed to narrow the productivity gap. Moreover, higher energy consumption per unit product has led to rising greenhouse gas emissions. For economic and social reasons, the production and consumption models in the region are highly dependent on fossil fuels, which has spurred higher energy consumption while at the same time generating an unsustainable pattern that the international community will begin to sanction through economic and trade measures.
  • Página 16-17; página 29 La reducción de las tasas de pobreza entre 1990 y 2008 se explica por la combinación del efecto crecimiento y distribución. Que no fue la misma a lo largo del período. Entre 2002 y 2008 el factor predominante en la reducción fue el efecto crecimiento, en magnitud menor que en 1990-2002 donde el efecto crecimiento no solo predominó sobre el efecto distribución, sino que este último tuvo un efecto adverso en algunos países, tendiendo a aumentar la pobreza; en cambio, en el período siguiente, el efecto crecimiento cedió parte de su influencia a la redistribución, que contribuyó favorablemente a la disminución de la pobreza en todos los países, salvo Guatemala. Crecimiento se relaciona con el aumento real de los ingresos laborales entre 1990 y 2008. Entre 1990-2002 el ingreso laboral por ocupado cayó en la generalidad de países y fue el crecimiento del porcentaje de población activa el que permitió que los ingresos laborales por persona se incrementaran, o al menos no cayeran tanto, en el período. En cambio en 2002-2008 se caracterizó por un marcado aumento del ingreso laboral por ocupado, que además fue acompañado con una reducción del desempleo. El porcentaje de población activa no tuvo en este período variaciones significativas, y en muchos casos estas presentaron signo negativo, incluso en los países que lograron las mayores reducciones de pobreza. En el período completo, 1990-2008, se corrobora lo positivo de la reducción de la tasa de dependencia demográfica (o “bono demográfico”). Los logros conseguidos en años recientes en materia de lucha contra la pobreza han llevado a que la situación actual sea más favorable que las de las dos décadas pasadas. Las actuales tasas de pobreza por debajo de las de 1990, cuando prácticamente la mitad de los latinoamericanos no tenía ingresos suficientes para cubrir las necesidades básicas. En la comparación con 1980 también se verifica una reducción apreciable de la incidencia de la pobreza aunque insuficiente para contrarrestar completamente el elevado crecimiento poblacional del período. En términos absolutos, el número de personas pobres e indigentes de 2008 supera al de aquel año en 44 millones y 9 millones respectivamente. 2008 fue el último año de un sexenio caracterizado por la reducción de la pobreza y la desigualdad. La tasa de pobreza alcanzo 33% , 11 puntos porcentuales menos que el 2002. Un total de 180 millones de pobres al finalizar el 2008.
  • Per capita GDP grew by 3% or more per year for five consecutive years Surplus in the regional current account coupled with economic growth
  • Entendemos por reprimarización el aumento en la participación de las materias primas no procesadas (barra verde) en las exportaciones totales. Esto no significa creer en la tesis de la “maldición de los RR.NN” En CEPAL también pensamos que este proceso de reprimarización se está produciendo en alguna manera en las manufacturas y los servicios, dado el bajo valor agregado incorporado por la industria en algunos países, como la industria maquiladora mexicana y centroamericana.
  • Four allies generally aided the decline in poverty from 1990 to 2008, although with varying intensities in different periods… Economic growth (the 1990s, with higher employment rates, and starting in 2002, with both higher employment and higher income) Improvements in distribution (only from 2002 to 2008) Large increase in social spending (growth resumes in the 1990s and consolidates between 2002 and 2008) Demographic effect (drop in the fertility and dependency rates and in average household size—more pronounced in the first stage than in the second) Factors behind the poverty trend: “growth” and “distribution” effects Between 1990 and 2008, about 85% of the reduction in poverty came from rising average household incomes (“growth effect ”) The other 15% came from changes in income distribution (“distribution effect ”) The 1990-2002 and 2002-2008 subperiods present differences in the contribution of the two effects , The distribution effect was very small and even negative in some countries between 1990 and 2002, tending to increase poverty , The distribution effect became more important between 2002 and 2008, helping to lower poverty, but the growth effect remained the more powerful, Despite the traditional intractability of distributive inequality, the Gini index dropped by an average of 5% between 2002 and 2008 Notwithstanding the decline in inequality between 2002 and 2008, the share of the poorest 20% is still very low The total income share of the poorest 20% in Latin America is less than half the income share of that quintile in the OECD countries
  • La relación de dependencia, al vincular la población en edades potencialmente inactivas (menores de 15 años y de 60 años y más), con la población en edades potencialmente activas (entre 15 y 59 años) constituye un importante indicador de los efectos potenciales de los cambios demográficos sobre el desarrollo socioeconómico. Se estima que la relación de dependencia promedio en América Latina experimentó un aumento entre 1950 y mediados de los años 60 debido a un incremento relativo de la población infantil, y a partir de entonces empezó a reducirse de manera sostenida debido a la caída de la fecundidad. Se proyecta que esta reducción continúe hasta aproximadamente el ano 2020, cuando vuelve a crecer gradualmente por cuenta del incremento relativo de la población adulta mayor. Pero si bien va a seguir cayendo hasta el 2020, la caída pronunciada se da hasta aproximadamente el 2010. la región contó por tanto entre 1990 y 2008 con los últimos años de caída pronunciada de las tasas de dependencia
  • Brasil, Chile, Mexico, Uruguay, Costa Rica, Argentina, Bolivia, Mexico, Ecuador y Panama Venezuela más de 18%
  • THIS CHART SHOWS THE DECLINE IN POVERTY BETWEEN 2002 AND 2008 AND THE REVERSAL OF THIS TREND IN 2009, PRECEDED BY A REVERSAL OF THE INDIGENCE TREND IN 2008 Despite a poor performance with poverty and indigence in 2008, the comparison with 2002 is still positive, that being the year when the indicators peaked at their highest levels since the 1990s, Over six years there was a cumulative decline of 11 percentage points in the poverty rate, while indigence fell by 6.4 percentage points, When these figures are expressed in terms of percentage changes in levels, it becomes clear that more was achieved with indigence, as this diminished at a rate of 6.6% a year while poverty did so at 4.7% a year, The 2002-2008 period was also characterized by a reduction in the total number of poor and indigent people to 41 million and 26 million, respectively, This sets the period clearly apart from earlier ones, There is a high degree of heterogeneity between countries, The lowest poverty levels are found in Argentina (urban areas), Chile, Uruguay and Costa Rica, with poverty rates below 22% and indigence rates of between 3% and 7%, The medium-low poverty group comprises Brazil, Panama and the Bolivarian Republic of Venezuela, with poverty remaining below 30%, The group of countries with medium-high poverty includes Colombia, Ecuador (data for urban areas), Mexico, El Salvador, Peru and the Dominican Republic, with poverty rates of between 35% and 48%, The countries with the highest poverty and indigence rates, exceeding 50% and 30%, respectively, are the Plurinational State of Bolivia, Guatemala, Honduras, Nicaragua and Paraguay.
  • En contraste con lo que se observó en el resto de la región, el Caribe no exhibe aún una tendencia sostenida al desendeudamiento y la razón entre la deuda y el PIB es la más elevada de la región, lo que ratifica su vulnerabilidad en este campo y actúa como un limitante a la capacidad de los estados de implementar medidas anticrisis. TRADE: In 2009 the volume of international trade decreased by 12.9%. In Latin America and the Caribbean the volume of trade decreased 13.5% in 2009 (23,3% in value). EL comercio mundial creción un 25% en el 1TRIM2010 en comparación con igual periodo de 2009 y para todo el año la OMC espera un crecimiento del comercio mundial en torno a 9.5% (7.5% desarrollados y 11% los países en desarrollo y transición). ALC 2010 : expo de bienes +21,4% en valor y +7% en volumen ; impo de bienes +17,1% en valor y +6,5% en volumen. La recuperación del comercio tanto de América del Sur como de México y Centroamérica ha dependido en las ventajas comparativas tradicionales; en el caso de Am del Sur, recursos naturales, mientras en el caso de México y CA, más bien, en manufacturas intensivas en mano de obra no calificada. En ambos casos, persiste un desafío de innovación y productividad. TOURISM: In the Caribbean, tourism has created income equivalent to 17,3% of GDP in 2008, meaning the impact of the crisis was particularly severe in this subregion. In Mexico there were also the effects of the A(H1N1) influenza. The World Tourism Organization forecasts an increase in the arrival of international tourists of between 2% and 4% in the Americas for 2010. REMITTANCES: Fell around 10% in the region in 2009. For 2010, ECLAC forecasts an increase of these flows of around 5%; nevertheless, this increase will not be sufficient to compensate the losses incurred in 2009. The slow recovery of remittances may be rooted in the low dynamism of the labour markets of developed countries. In the 1Q2010, comparing to 1Q2009: Ecuador +0,7%, El Salvador +0,5%, Jamaica +9,9%, Nicaragua +3,2%, Dominican Republic +5,4%. FINANCIAL ACCOUNT AND FDI: Luego del momento más álgido de la crisis financiera global a fines de 2008, la región exhibió un continuo proceso de recuperación del acceso a los mercados financieros internacionales, del dinamismo de la inversión externa directa y de la acumulación de reservas. Durante 2010 estas tendencias se mantuvieron y los indicadores del nivel de riesgo continuaron descendiendo, al tiempo que los montos de deuda emitida en los mercados de capitales internacionales por parte de países de la región han alcanzado niveles récord. Es notorio el crecimiento de la emisión de deuda privada por parte de la región, lo que refleja las mejores condiciones de acceso a estos mercados que en épocas previas. In 2009 FDI inflows to LAC decreased 42% due to the global crisis and in 2010 ECLAC estimates an increase of between 40 and 50% PRIVATE SECTOR EXPENDITURE: Esta sólida reactivación (crecimiento estimado de 5,2% en 2010) se basa en gran parte en el dinamismo de la demanda interna, en una aceleración de la inversión y en un comportamiento robusto de las exportaciones, impulsadas por la demanda de China y el resto de Asia, así como por la normalización de la demanda de EEUU. Recuperación más lenta en los países importadores de productos básicos y dependientes de turismo y remesas EMPLOYMENT: En la mayoría de los países, la desaceleración de los aumentos salariales fue menor que la disminución de la tasa de inflación, por lo que los salarios crecieron en términos reales. El incremento de los salarios medios reales tuvo un papel estabilizador de los ingresos de muchos hogares y de esta manera contrarrestó en parte la evolución negativa del empleo en gran parte del 2009. El desempleo se estima que caerá al 7.8% desde un 8.2% (2009). Las mayores disminuciones en tasa de desempleo se registraron en Brasil, Chile y Uruguay.
  • The forecasts are being revised and will be upgraded. The final regional growth rate for 2010 is very likely to be above 5.6 near event to 6 % INTERNATIONAL TRADE IS GROWING AND TERMS OF TRADE IMPROVING BUT IMPORTANT CHALLENGES REMAIN
  • ESTE ES EL GRAN MENSAJE DEL DOCUMENTO
  • Macroeconomic policy for inclusive development: It is necessary not only to achieve greater economic dynamism, but also higher levels of social inclusion and equality, less exposure to the impact of external volatility, more productive investment and generate more quality jobs. The region can grow more and better Production structure: It is crucial to transform the production structure to overcome the structural heterogeneity that the countries in the region face domestically and externally through three areas of policy: Industrial, with an emphasis on innovation Technological, focusing on the creation and dissemination of knowledge and Support for small- and médium-sized enterprises (SMEs) Place does matter: Social gaps and productivity also have their spatial expression, hence the urgency of creating policies to address territorial heterogeneity within countries Intergovernmental transfers and territorial cohesion funds are critical in correcting regional disparities Employment and labour institutions – the key to equality of opportunities and social inclusion: Employment is the master key to solve inequality and close the gaps occurring in income, access to social security and job stability, as well as discrimination against women, ethnic minorities and youth Promotion of a labor pact that will generate economic dynamism and protect the worker Closing social gaps: The State has a crucial role in correcting inequality, implying a steady increase in social spending and progress towards stronger social institutions and income transfer systems to improve distribution to the most vulnerable The State, political action, fiscal policy and social covenants – an equation in the making: it is necessary to provide the State with greater ability to redistribute resources and promote equality is recognized A welfare State moving towards a tax structure and a transfer system emphasizing social solidarity A new equation State-market-society, we should be able to achieve development with quality jobs, social cohesion and environmental sustainability
  • Consenso sobre prioridades y su financiamiento – Pacto Fiscal De recaudar poco y mal a: Estructura tributaria progresiva Expandir la carga tributaria Reducir evasión y exenciones generalizadas Definir prioridades de gasto: En lo social énfasis en lo no contributivo En lo productivo: más para innovación Banca de desarrollo: financiamiento inclusivo Destinar inversión pública a infraestructura, economía baja en carbono y pro-empleo
  • En promedio la presión tributaria de América Latina es alrededor del 18% del PIB, nivel muy bajo en relación con el grado de desarrollo relativo y en comparación con las necesidades de recursos para las políticas públicas planteadas en el documento. Con todo, la evolución de la carga tributaria (incluyendo seguridad social) entre 1990 y el 2008 muestra un incremento desde 12,8% en 1990 al 18,4% en 2008. Sin embargo, el problema más grave es que menos de un tercio de la recaudación corresponde a impuestos directos, mientras que el grueso de la carga recae en impuestos al consumo y otros impuestos indirectos, lo que merma el impacto redistributivo de la recaudación.
  • Esto implica quitar a unos para dar a otros, para que todos ganen inter-temporalmente.
  • Para avanzar en pactos sociales es imprescindible el apoyo de actores políticos y sociales. Esto requiere crear un clima cultural que favorezca una coalición redistributiva. Es fundamental el rol de la clase media en la construcción del pacto fiscal.

Alicia Bárcena Executive Secretary Economic Commission for ... Alicia Bárcena Executive Secretary Economic Commission for ... Presentation Transcript

  • Alicia Bárcena Executive Secretary Economic Commission for Latin America and the Caribbean Dialogue with the Second Committee New York, 3 November 2010
  • The policies pursued since the 1980s did not produce the rapid, sustained economic growth that was expected…
    • LATIN AMERICA AND THE CARIBBEAN : GDP GROWTH COMPARED WITH TOTAL GDP OF DEVELOPING COUNTRIES AND THE WORLD
    • ( Annual rates of variation )
    Source : Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures and World Bank, World Development Indicators [online database].
    • LATIN AMERICA (SELECTED COUNTRIES) AND THE UNITED STATES: PRODUCTIVITY
    • AND BREAKDOWN OF INDUSTRIAL VALUE ADDED
    • (Percentages of industrial GDP and 1985 dollars)
    … Nor they worked towards closing the productivity gaps prevailing in the countries of the region, both domestically and with the United States Source : Economic Commission for Latin America and the Caribbean (ECLAC), Industrial Performance Analysis Program (PADI), on the basis of official figures.
  • In terms of poverty, the lost decade of the 1980s was followed by a difficult 1990s and a new century with notable achievements LATIN AMERICA: POVERTY RATES, 1980-2008 ( Percentages ) Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official information.
  • The excellent external conditions prevailing in the period 2003-2008 strongly contributed to the historical achievement of growing with external-account surpluses and improved public finances
            • LATIN AMERICA AND THE CARIBBEAN: PER CAPITA GDP GROWTH RATE, CURRENT ACCOUNT BALANCE AND OVERALL FISCAL BALANCE
    • (In annual growth rates and percentages of GDP)
            • Source : Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
  • Main features and achievements in 2003-2008
    • Three simultaneous macroeconomic developments:
      • Sound fiscal policies and a better public debt profile
      • More flexible exchange rates and unprecedentedly high international reserves (+150% between 2003 and 2008)
      • A regional current-account surplus with economic growth
    • Ready access to external financing
    • Increase in trade (I + X) (value: 138%/volume: 49%)
    • Terms of trade improved by 25% in the region
    • Per capita GDP grew by more than 3% per year for five consecutive years
    • Unemployment diminished from 11% to 7.3% with job quality
    • Poverty rates fell by 11 percentage points (from 44% to 33%)
  • Nevertheless, the boom in commodity prices has led to the “reprimarization” of the region’s export structure LATIN AMERICA AND THE CARIBBEAN: STRUCTURE OF WORLDWIDE EXPORTS SINCE THE EARLY 1980s ( Percentages of the regional total ) Source : Economic Commission for Latin America and the Caribbean (ELCAC), on the basis of United Nations COMTRADE database.
  • LATIN AMERICA (18 COUNTRIES): GINI INDEX, AROUND 1990, 2002 AND 2008 a Economic growth and improvements in income distribution were powerful allies in combating poverty… Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of household surveys conducted in the respective countries a Urban areas. Countries in which inequality increased Countries in which inequality decreased Countries in which inequality decreased Countries in which inequality increased
    • Number of persons of inactive age per 100 persons of active age :
    • (0-14) + (60 +) / (15-59)
    • Sharp fall:
    • Easy yield from the demographic dividend
    • (1970-2010/2015)
    • Stabilization at low levels:
    • The dividend persists, but its activation depends on other factors
    • (2010/2015-2021)
    • Beginning of the end of the demographic dividend:
    • The dependency rate begins to rise
    • 2021-
    … so, too, was the sharp fall in the demographic dependency rate at the regional level
  • For the first time in the history of the region there were improvements in equality
    • Besides growth, the decrease in poverty rates in the region was also stimulated by improvements in income distribution
    • It is the first time in the history of the region that there are improvements in equality indicators
    • The Gini Index improved between 3% and 10% in 10 out of 20 countries
    • Income in poor households improved 20% (equalize to grow)
  • The backslide in poverty indicators in 2009 did not wipe out the substantial gains of the past six years, but it did slow the rate of reduction LATIN AMERICA AND THE CARIBBEAN: POVERTY AND EXTREME POVERTY, 1980 – 2009 a (Percentages and millions of persons) Percentages Millions of persons Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of household surveys conducted in the respective countries. a Estimate for 18 countries of the region plus Haiti, The figures shown above the bars represent the percentage and total number of poor (indigent plus non-indigent poor). 18.6 22.5 18.5 19.4 13.3 12.6 12.9 13.7 40.5 48.3 43.8 44.0 36.3 34.1 33.0 34.1 0 10 20 30 40 50 60 1980 1990 1999 2002 2006 2007 2008 2009 Indigent Non-indigent poor 62 93 89 97 71 68 71 76 136 200 211 221 193 184 180 189 0 50 100 150 200 250 300 1980 1990 1999 2002 2006 2007 2008 2009 Indigent Non-indigent poor
  • The speed of recovery in this crisis was faster compared with other crises LATIN AMERICA: GROSS DOMESTIC PRODUCT IN CONSTANT US DOLLARS FROM 2000 (Rates of change, with seasonal adjustments)
    • The previous exceptional period of prosperity created a larger space for the implementation of public policies, with the exception of the Caribbean
      • Monetary and financial policy
      • Fiscal policy
      • Trade policy
      • Labour policy
    • Trade is increasing
    • Terms of trade are improving
    • Tourism is recovering and Remittances begin to increase again
    • The region returned to the international financial markets
    • Private sector expenditure is recovering
    • Private consumption is pushed up by increased employment
    Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official information.
  • Latin America and the Caribbean will grow above 5.6% in 2010 LATIN AMERICA AND THE CARIBBEAN: GDP GROWTH, 2010 a (Percentages) Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official information. a Forecasts.
  • Why time for equality?
    • The crisis has produced questions about the dominant model, creating a turning point —and thus an opportunity to chart a new course
    • That model had been associated with two decades of high wealth concentration
    • The challenge at this juncture is to achieve greater equality
    • For the region, this means facing up to its historical and more recent liabilities:
      • Worst income distribution in the world
      • Increasingly heterogeneous production patterns
      • Segmentation of the labour market and social protection
      • Racial, ethnic and gender discrimination
      • Asymmetrical vulnerability to climate change
  • Social equality and economic growth are not mutually exclusive
    • Growth needs equality; equality needs growth
      • With macroeconomic conditions that mitigate volatility, stimulate productivity and favour inclusion
      • With production patterns that close internal and external gaps
    • Promoting equality by building human skills and actively redressing disparities
      • Universalizing rights and social benefits
      • Fostering inclusion through the labour market
      • Achieving territorial convergence
    • With a smarter and stronger State in order to be able to redistribute, regulate and supervise
  • A development agenda based on six pillars
    • Macroeconomic policy for inclusive development to mitigate volatility, stimulate productivity and favour inclusion
    • Overcoming structural heterogeneity and productivity gaps through more innovation, dissemination of knowledge and support for small- and medium-sized enterprises (SMEs)
    • Overcoming territorial disparities affecting productive, institutional and social development capacities and hindering national production linkages
    • Creating more and better employment to improve equality of opportunities and social inclusion
    • Closing social gaps through a steady increase in social spending and stronger social institutions
    • Building consensus around social and fiscal covenants and a new role for the State
  • A development agenda based on six pillars
    • Macroeconomic policy for inclusive development: It is necessary not only to achieve greater economic dynamism, but also higher levels of social inclusion and equality, less exposure to the impact of external volatility, more productive investment and generate more quality jobs. The region can grow more and better
    • Production structure: It is crucial to transform the production structure to overcome the structural heterogeneity that the countries in the region face domestically and externally through three areas of policy:
      • Industrial, with an emphasis on innovation
      • Technological, focusing on the creation and dissemination of knowledge and
      • Support for small- and medium-sized enterprises (SMEs)
    • Place does matter: Social gaps and productivity also have their spatial expression, hence the urgency of creating policies to address territorial heterogeneity within countries
      • Intergovernmental transfers and territorial cohesion funds are critical in correcting regional disparities
  • A development agenda based on six pillars
    • Employment and labour institutions – the key to equality of opportunities and social inclusion: Employment is the master key to solve inequality and close the gaps occurring in income, access to social security and job stability, as well as discrimination against women, ethnic minorities and youth
      • Promotion of a labor pact that will generate economic dynamism and protect the worker
    • Closing social gaps : The State has a crucial role in correcting inequality, implying a steady increase in social spending and progress towards stronger social institutions and income transfer systems to improve distribution to the most vulnerable
    • The State, political action, fiscal policy and social covenants – an equation in the making: it is necessary to provide the State with greater ability to redistribute resources and promote equality is recognized
      • A welfare State moving towards a tax structure and a transfer system emphasizing social solidarity
      • A new equation State-market-society, we should be able to achieve development with quality jobs, social cohesion and environmental sustainability
  • The fiscal covenant: a sine qua non
    • Never before had the region so many democratically elected governments and for such a long period of time
    • Democracy is ultimately the reflection of the decisions of the citizens in terms of which public goods should be provided to the population, in which manner and magnitude
    • A fiscal covenant is essential in order to enhance the State’s capacity to redistribute resources and play a more active role in promoting equality and production convergence:
      • There is significant scope for promoting and strengthening the redistributive role of the State, as regards both
      • Social expenditure and
      • The collection of revenue to finance it (tax structure)
  • There are three specific problems:
    • Tax systems deliver low levels of revenue and are badly designed
      • A regressive tax structure
      • A low tax burden in most countries
      • High levels of evasion
      • Widespread exemptions
    • Social spending with little redistributive impact
      • A weak non-contributory pillar
      • In terms of production: minimum support provided to SMEs and segmented access to financing
    • Insufficient investment for development
      • In infrastructure
      • In research, science and innovation
      • In development banking institutions: inclusive financing
      • In cleaner matrices from the environmental perspective
  • Latin America has a more regressive tax structure and a higher proportion of indirect taxes than other regions of the world LATIN AMERICA AND THE CARIBBEAN: COMPARATIVE FISCAL STRUCTURE (Percentages of GDP) Source : Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official OECD figures.
  • A fiscal covenant means that the different public and private stakeholders must come together to define priorities and instruments
    • A clear-cut path for the State to:
      • Gradually increase the tax burden, with a view to creating tax systems providing appropriate incentives for productive investment
      • Reform the tax structure by previously agreed stages, primarily by raising income tax
      • Improve tax collection by reducing and progressively controlling tax evasion, and gradually eliminating exemptions from direct taxes with a view to achieving greater equity and efficiency
    • A shared platform which correlates changes in the tax burden and structure with the allocation of the generated fiscal space among public policies
    • A clear, agreed public agenda for enhancing the transparency, efficiency and effectiveness of public spending and institutions
    • A roadmap for gradually reprogramming social spending in which intra- and intersectoral restructuring demonstrably produces a stronger redistributive impact, greater social cohesion and more widespread externalities in terms of equity and productivity
  • New equation: State-market-society
    • The public sphere as a forum for collective interests and not simply for State or national matters
    • Political agreements for a new social and intergenerational covenant, with specific responsibilities and accountability systems
    • Consolidation of a culture of collective development based on tolerance of difference and diversity
    • Strategic internally defined long-term vision that promotes covenants between the stakeholders in production
    • Policies of State —not only of the current government or administration—channelled through democratic institutions
  •