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Experts at OAS Debate on How to Improve Public Management to Facilitate Economic Growth in the Region

Experts gathered today at the XXXVII Policy Round Table of the Organization of American States (OAS) debated on how to improve the effectiveness of public management in the countries of the region to guarantee more equal economic growth, further reduce poverty levels, and improve the quality of life of its citizens.

The discussion surrounded the report “Latin American Economic Outlook 2012: Transforming the State for Development”, produced by the Organisation for Economic Co-operation and Development (OECD) and the Economic Commission for Latin America and the Caribbean (ECLAC). Participants were Carlos Álvarez, Deputy Director of the OECD’s Development Centre; Inés Bustillo, Director of the Washington Office of ECLAC; and Robert Devlin, Director of the OAS Department for Effective Public Management.

Inés Bustillo, of ECLAC, and Carlos Álvarez, of OECD, presented the contents of the report, which refer to the “good moment for the region.” According to Bustillo, in the last years there have been “tremendously significant achievements,” including on matters of poverty reduction and income redistribution. “If one observes the economic performance of the region during the last ten years, independently of the goings on of the global economy, you can see a region that is consolidating its management, especially in the macroeconomic arena, its integration into the global economy, and is become stronger, generating spaces for substantial reforms that can guarantee a stable growth and development in the long term,” Álvarez said.

Nevertheless, the two experts agreed that it is necessary that the progress in these and other areas continue, because there are still significant challenges. “Basically our vision is that addressing these challenges involves a transformation of the State, to make it more efficient, more effective,” said Inés Bustillo, and referred to how the report speaks particularly about the need for progress in education, infrastructure, and productive transformation and innovation. These areas, said the ECLAC representative, are “key issues not only for better growth but a more equal growth, key issues for competitiveness and equity.” “They are essential dimensions in the theory of economic growth in which public action makes substantial difference,” Álvarez added.

The improvements to the State, continued Bustillo, must include in some countries a tax reform. “In Latin America and the Caribbean there have been some very significant successes in the last years. Nevertheless, the region as a whole, despite the strength of public finances, in terms of income collects little and collects poorly. We see some great gaps between the resources available to the State, what the State can collect, and the needs for development,” she said. To walk towards these tax changes it is necessary, she added, “a strengthening of the social contract,” linking more directly the payment of taxes with the creation of high-quality public services.

Robert Devlin, of the OAS Department for Effective Public Management, highlighted that, according to the text presented today, “Latin America has done something that in the 1980s and 70s was thought impossible, and that is to have good micromanagement,” thanks to which “it was prepared for this big crisis.” Also, he said, “the report points out correctly that we’re in a very uncertain world now, and so the region has to increase its fiscal space, increase its macroeconomic strength, and also deal with some of the little blips that we’ve seen lately, like more inflation in some countries.”

Among the principal challenges facing the subcontinent, Devlin mentioned the lack of coordination to efficiently apply the strategies for growth. “I think this is one of the major weaknesses in Latin America. You can have a great strategy, like in sports, but if you don’t have good execution you don’t win. It’s the same thing in Latin America, you need excellent coordination between ministries, between ministries and their executing agencies, and between central governments and local governments. This is a major Achilles heel in the region that has to be addressed, and is not an easy one,” he concluded.

Irene Klinger, Director of the OAS Department of International Affairs, and moderator of the Policy Round Table, recalled for her part that Latin America and the Caribbean today are “an example of a gradual consolidation and strengthening of democratic Systems.” Nevertheless, she noted that the possibility of contagion from the global economic recession threatens the achievements reached and the continuation of economic growth, for which “faced with the many challenges that still exist, especially regarding the improvement of quality of life and poverty and inequality reduction, the State can and must play a fundamental role by creating quality jobs, consolidating solid, transparent and just tax systems, betting on the education and training of the population, increasing the effectiveness of investment in infrastructure, and supporting innovation and productive development,” concluded Klinger.

A gallery of photos of the event is available here.

For more information, please visit the OAS Website at www.oas.org.

Reference: E-1004/11