SANTIAGO, Chile - As the Inter-American Development Bank (IDB) opened its 42nd Annual Meeting of the Boards of Governors in Santiago, Chile last week, attendees grappled with an overarching theme: How can Latin America further its development and become a fierce competitor as it steps into the next decade?
Last Thursday, representatives from the civil society joined with government officials to discuss the issue that might be at the very heart of developmental problems throughout the continent: "good government."
It's nothing new to hear that Latin America is often at the brunt of political scandals and government upheavals; because of this, officials noted, a lack of good government has been the main hindrance to development. Notably, on more than one occasion, deals coming out of certain countries, most recently Peru, have been delayed as a result of political uproar.
"With few exceptions, our public policies have been ineffectual not because the underlying technical design is deficient, but because in the absence of a broad democratic institutional base, it has been very difficult for governments to truly address the needs and aspirations of the city," said Enrique V. Iglesias, president of the IDB. He added, "Once we acknowledge that institutions are indeed important, we must likewise acknowledge the importance of the politics, since the caliber of the country's institutions depends essentially on the quality of its political system."
As the conference continues throughout the week, economists, bankers, and investors will discuss Latin America's apparent reputation of instability and the need for a legal and regulatory framework to improve financing. Additionally, panelists will speak on pension funds and their importance to Latin American capital markets, as well as what the governments and the private sector can do to improve market growth. Stay tuned for coverage in next week's ASR.