ECLAC reviews regional economies

SANTIAGO, Chile (CMC):

The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, says the investment ratio in the region is not enough to maintain high growth rates.

In addressing the XXIV Regional Seminar on Fiscal Policy in Chile, Bárcena said investment, unfortunately, has been one of the adjustment variables in previous crises.

"Investment in Latin America and the Caribbean is not only highly volatile, but during economic upturns, it is also unable to recover from its fall during the downturn," she told the high-level meeting, which included top officials from the International Monetary Fund and the Organisation for Economic Co-operation and Development.

"Private investment has not been dynamic and public investment has been declining," added Bárcena.

According to Bárcena, the quality of public finances in the region has improved.

"Public debt has been significantly lowered, and its profile and comp-osition are more balanced," she said.

"Tax revenues and the average tax rate (have) increased. The decrease in interest payments has created significant fiscal space, and social public spending has been maintained."

Focus on development

Bárcena urged that investment in the region be aimed at improving infrastructure, increasing research, science and innovation, promoting banking institutions for development, and developing cleaner matrices from an environmental perspective.

She called on regional countries to consolidate a "sustainable and, at the same time, stabilising" fiscal policy, with a low debt-GDP ratio in good times and counter-cyclical expenditure policies during recessive phases.

"Fiscal policy must contribute to long-term economic growth through stable investment in physical and human capital and innovation," she said. "It must also have a redistributive impact, which includes progressive tax rates."