DIGITALISATION KEY TO IMPLEMENTING INCLUSIVE AND SUSTAINABLE ECONOMIC MODEL IN LATIN AMERICA
Hannover, Germany – November 17, 2020: Manufacturing in Latin American has been hit hard by the COVID-19 pandemic in 2020, with significant decreases in industrial production, intra-regional trade and exports compounding existing barriers to growth. However, accelerated digitalisation prompted by the crisis offers an opportunity for transformative reforms and closer intra-regional cooperation and trade integration, believes a panel of experts that convened virtually for the the Global Manufacturing and Industrialisation Summit’s #GMIS2020 Digital Series on “Latin America and the Caribbean: Manufacturing and Economic Growth in the post-Covid-19 Era”.
Diego Masera, Deputy Director of the Regional and Field Coordination Department and Chief of the Regional Coordination Division for Latin America and the Caribbean, UNIDO, opened the session by noting that the disruption of the COVID-19 pandemic in the region had been “exacerbated by weak social protection structures, fragmented health systems and deep inequalities.” Masera highlighted that COVID-19 will cause the region’s worst recession in the past 100 years and generate a 9.1% contraction of regional gross domestic product (GDP) in 2020 according to ECLAC data. Referencing United Nations Secretary-General Antonio Guterres’s recent report on the impact of Covid-19 in the region, Masera added, “there is a need to build back with equality by fostering sustainable industrial and technological policies, and stronger regional economic integration.”
Silvia Ortega, Manager of International Affairs at the National Society of Industries in Peru, noted that the pandemic containment measures had led to a regional shortfall in goods and a freeze to transport systems, bringing regional economic activity “to a standstill”. She observed that Latin American countries in many cases re-shored to their countries of origin, worsening regional trade and production, leading to a fall of 22 per cent in expected exports, with countries dependent on markets in Asia at risk of being the most exposed. In the longer term, the region needs to rethink its economic model, she believes. “This challenge consists of rethinking previous models of development and moving towards more sectoral models, where we can invest in capacity building and research in order to generate regional value chains that allow us to grow in the region, generate decent employment and ensure that a crisis such as the current one does not affect us so drastically in the development of our countries,” observed Hooker Ortega.
Dr Clemente Ruiz Durán, National Researcher of the National Council of Science and Technology (CONACYT) and professor at the National Autonomous University of Mexico, noted that digitalisation has allowed the economy to continue functioning. He stated that digitalisation would enable sustainable energy, mobility, communication and transport systems. Dr. Ruiz Durán noted that many communities had been marginalised in Latin America, adding that “to solve this problem, governments have to carry out enormous public investments that allow the digitalisation of the whole region and that the population can benefit from.” Dr. Ruiz Durán urged pairing initiatives between Micro, Small and Medium Enterprises (MSMEs) and large firms for integration in regional value chains, and training programmes. “I propose to turn our eyes towards Latin America instead of the rest of the world,” he said. “I believe that this is a great opportunity and if we do it well, it can be the beginning of a redefinition of industrial development in Latin America,” concluded Dr. Ruiz Durán.
Tomás Karagozian, President, UIA Joven/ Unión Industrial Argentina, stressed the importance of a regionalised economy, advocating for increased dialogue and consensus in order to “overcome these recurring crises that we go through every four to five years.” He underlined the need for institutional reforms, including incentivising “good behaviour”, the formal economy through reducing taxes, combining work and training for young people, and public-private partnerships. Karagozian noted that digitalsation had accelerated during the pandemic, but Latin America continues to face issues of management and leadership, and value chain integration, while being poised to benefit from productivity increases. Those that have the best “productive matrices” will adapt quickest to digitalisation, he believes. “I believe that we must all work on digitalisation and towards stronger and more consolidated productive matrices at local level with a great regional connection, and with global participation in terms of information exchange, digitalisation and sharing of experiences,” urged Karagozian.
Concluding, Masera conceptualised the crisis as an opportunity to move towards sustainability, social equity and the achievement of the Sustainable Development Goals. “Indeed, this crisis provides an opportunity to change our approach to the development of manufacturing in the region. In this regard, we must focus our energies on supporting more inclusive, sustainable and people-centred development,” he urged. “ UNIDO in Latin America and the Caribbean focuses on promoting knowledge sharing, technical cooperation and technology transfer at the regional and interregional levels that enable countries to strengthen their institutional capacity, create value added, diversify production and increase technical capacity.”
The virtual panel discussion was the latest in a new sequence of weekly sessions held by the #GMIS2020 Digital Series, following the Virtual Summit that was held on September 4-5, 2020. The session is available to watch on-demand at https://bit.ly/2YHVHyY.
Notes to Editors
The Global Manufacturing and Industrialisation Summit (GMIS) was established in 2015 to build bridges between manufacturers, governments and NGOs, technologists, and investors in harnessing the Fourth Industrial Revolution’s (4IR) transformation of manufacturing to enable the regeneration of the global economy. A joint initiative by the United Arab Emirates and the United Nations Industrial Development Organization (UNIDO), GMIS is a global platform that presents stakeholders with an opportunity to shape the future of the manufacturing sector and contribute towards global good by advancing some of the United Nations Sustainable Development Goals.
The first two editions of the Global Manufacturing and Industrialisation Summit were held in Abu Dhabi, United Arab Emirates in March 2017, and Yekaterinburg, Russia in July 2019, respectively, with each edition welcoming over 3,000 high-level delegates from over 40 countries.
GMIS 2020, the third edition of the Global Manufacturing and Industrialisation Summit, will be held virtually as a sequence of Digital Series starting June 2020 followed by a virtual Summit in September 2020, and will focus on the theme of glocalisation.
To learn more about GMIS, please visit https://gmisummit.com/ and follow GMIS on Twitter: @GMISummit, Instagram: @gmisummit, LinkedIn: GMIS – Global Manufacturing & Industrialisation Summit, and Facebook: @GMISummit.
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