Renewable Energy and Regional Integration Drive Latin American Vision for Growth

With its abundance of natural resources and emergence from many recent pandemic constraints, some Latin American nations are bullish about the region’s potential to become a global leader in providing clean energy. Regional specificities, such as the abundance of hydropower and solar energy, convey unique advantages – particularly if the Americas achieve greater electrical grid connectivity.

President Gustavo Francisco Petro Urrego of Colombia, speaking at a session on Leadership for Latin America at the 53rd World Economic Forum Annual Meeting, called for the region to “build an American electricity grid from Patagonia to Alaska”. Such connectivity would allow renewable energy producers in Latin America to sell power to the United States and Canada.

“We can make our continent the centre of clean energy production,” agreed Fernando Haddad, Minister of Finance of Brazil. He echoed the vast opportunities for Latin America to attract foreign investment and promote entrepreneurship through renewable energy. “All this will depend on regional integration,” he added. Better coordination among Latin American nations would facilitate trade, integrate financial markets and improve infrastructural connections in energy, transport and other sectors.

Access to global markets is central to many nations’ vision of prosperity in Latin America. Rodrigo Chaves Robles, President of Costa Rica, said: “Costa Rica has done very well by including itself in supply chains.” Costa Rica has actively promoted industries such as medical supplies, aerospace and back-office services. The nation’s leadership sees both bilateral and multilateral trade agreements as necessary for the ongoing growth of such sectors.

In the Dominican Republic, small- and medium-sized business represent the core of the economy. “SMEs are 70% of our productive base,” said Raquel Peña, Vice-President of the Dominican Republic. Reforms have focused on improving opportunities for SMEs such as facilitating loans to entrepreneurs and developing tax-free zones.

Achieving growth requires managing diverse national needs. In Ecuador, the new government focused on reducing corruption as a key to economic growth. “Fighting corruption and keeping public spending under tabs frees resources to invest in social affairs,” said Guillermo Lasso Mendoza, President of Ecuador.

An ongoing challenge in Colombia is tackling violence related to drug trade. “Colombia has lived for decades in violence. We used to call it perpetual violence,” said President Petro. He suggested that new agricultural opportunities could help stabilize violence-prone, cocaine-producing regions. One idea involves converting cocaine production to cocoa production, with the help of multinational corporations such as Nestlé. Moreover, nations around the world can help reduce violence by promoting decriminalization of some drugs and increasing prevention efforts focused on drug education.