Right path for the times

XING WEI/FOR CHINA DAILY

Greater integration into the Belt and Road Initiative would benefit Latin America and the Caribbean

The region that makes up Latin America and the Caribbean encompasses more than 30 countries. In addition to suffering from the traditional regional problems, they are also suffering significantly from the impacts of the current deterioration of the global economy.

According to the International Monetary Fund, uncertainty caused by the pandemic continues to cast a shadow on the recovery globally and in Latin America and the Caribbean.

Surging inflation is another challenge. Prices in regional economies, including Brazil, Chile, Colombia, Mexico and Peru, increased by 8.3 percent in 2021, which is the largest jump in 15 years.

Inflationary pressures in the United States and across the region, which calls for an even faster withdrawal of monetary accommodation and associated tighter global and domestic financial conditions, also represent major risks to the regional recovery.

In the current world context, a number of developed countries are focusing their resources on solving their internal problems. As a result, they have significantly reduced their aid to developing countries, including those in Latin America and the Caribbean.

Countries in the region should seek greater integration with the Belt and Road Initiative.

Although Latin America and the Caribbean are places of significant dimensional disparities, diversities of sectoral activities, different political systems and social realities, many of the initiative's objectives align with the region's main demands.

The regional countries share many common problems, among them the lack of the necessary wherewithal to improve their productivity. External technology and finance will help the situation of economic stagnation.

This aid would impact the production of products, giving them greater added value, increase the supply of jobs and contribute to the reduction of social inequalities. It is important to emphasize that this development must be focused on the use of innovation, as this will be a significant growth differential in the coming years for all countries.

Another major common problem is the need to expand and adapt the educational sector to the new reality. Even considering the impact of the pandemic, which has hampered the regularity of studies, the region's educational content needs to undergo a significant transformation to align the education offered with the demands of job providers.

The region's education system seems far from modern teaching practices, contributing to the rise in unemployment.

The region is also faced with the climate change challenge, which is causing extreme weather events. Developing technologies for the early identification of potentially catastrophic natural disasters would be of great value to the region.

The list of needs in the region is immense, and it would undoubtedly be beneficial to countries in the region if they are integrated more into the Belt and Road Initiative.

The Belt and Road Initiative has five cooperation priorities: policy coordination, connectivity of infrastructure, unimpeded trade, financial integration and closer people-to-people ties. This five-priority structure already shows the potential of the initiative to address the main problems in the region.

In Latin America and the Caribbean, inefficient and insufficient infrastructure also worries the region, as it harms the economic development of countries. In the Belt and Road Initiative, there is an emphasis on actions to make trade between countries freer and without the traditional protectionist barriers.

With greater integration into the initiative, Latin American and the Caribbean countries would have greater access to significant players that are participants in the Belt and Road.

The most critical issues in the region at the moment is the availability of financial resources. Also, for the resources to be used well, it will be necessary to carry out financial integration based on the implementation of correct macroeconomic fundamentals and the capabilities of the financial institutions involved.

To sum up, considering the current global context, where economic destabilization is likely to continue, the best option for Latin America and the Caribbean is greater integration with the Belt and Road Initiative. This integration will drive economic growth and enhance the well-being of people in the region.

The author is director of the China-Brazil Center for Research and Business. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn