Latin America’s possibilities for growth and competition in the global market should focus on innovation and forging closer ties with Asian Pacific nations, which have become the world’s main pole of economic growth, said the Economic Commission for Latin America and the Caribbean in two reports.
The documents were presented Friday by Alicia Bárcena, the organization’s executive secretary, during the Latin American Pacific Basin Forum held in Cuzco, Peru.
In the first report, “Science and Technology in the Latin American Pacific Basin: Opportunity for Innovation and Competition,” the Economic Commission suggests that innovation is a central element in development strategies because it gives way to sustainable, long-term economic growth with equality and competitiveness.
The analysis of the performance of countries in the Latin American Pacific Basin (Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and Peru) in terms of research and development shows that the region has not been too active in this field: average investment has been lower than a half percent of gross domestic product in recent years and in many countries it barely reaches a tenth of a percent.
In contrast, some Asian-Pacific nations, such as Hong Kong, China, Singapore or South Korea, have increased investment by over 5 percent in only seven years.
The number of researchers per one thousand members of the economically active population reveals significant differences: Chile has 2.03 researchers per every one thousand, Mexico has 1.08, and Costa Rica and Colombia 0.3, while Japan and South Korea have 10.
“In light of this, reducing the productivity gap is essential for advancing towards structural changes and the diversification of exports, strengthening sectors intensive in technology and knowledge,” said Ms. Bárcena.
In the document “The Latin American Pacific Basin: Creating Paths for Complementation and Integration with Asia,” the commission asserts that closer ties with the Asia Pacific region may require more institution-building in the Pacific Basin as a way to boost its identity before Asian nations.
The study notes that the participation of the Latin American Pacific Basin in world trade represents slightly more than 3 percent of global exports of goods, less than half of that of the Association of Southeast Asian Nations comprised by Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. Their total is 65 percent.
The report concludes that greater economic ties between the Basin and Asia should consider a two-pronged approach that, on the one hand, seeks a more efficient use of the comparative advantages of natural resources, and on the other, intensifies efforts to foment its international competitiveness in the manufacturing sector by encouraging the insertion of companies in the Pacific Basin in Asian supply and value chains.
“We need to view relations with Asia Pacific not as a menace, but as a great opportunity and advantage,” said Ms. Bárcena. “The countries in the basin should agree on a common and coordinated strategy in managing its relations with Asia Pacific, which has become the most dynamic pole of the world economy.”