The Way Ahead
There are several win-win areas where Latin America can improve competitiveness and inclusive growth at the same time:
Sound public institutions will be critical to lay the ground for productive and inclusive reforms, closing income gaps between and across countries.
Investing in equitable educational systems will equip large parts of the population with the skills required by modern economic production and therefore will create better job opportunities for all.
Bridging gaps in infrastructure capacity in the region, especially in ICT and transport will reduce logistics cost, boost efficiency and connect people to markets.
At the same time, improving the functioning of labor markets, social protection, financial inclusion and broad based asset building will be important to turn efficiency gains into shared prosperity.
Potential Priority Areas for Growth with Inclusion in Latin America:
| Country | Priority 1 | Priority 2 | Priority 3 |
|---|---|---|---|
| Argentina | Financial inclusion/ development | Institutions, corruption and rents | Innovation/ entrepreneurship |
| Bolivia | Basic/ Digital infrastructure | Innovation/ entrepreneurship | Fiscal transfers |
| Brazil | Institutions, corruption and rents | Innovation/ entrepreneurship | Educational quality, equity and training |
| Chile | Innovation/entrepreneurship | Labor market efficiency, wage and non-wage compensation | Fiscal transfers |
| Colombia | Institutions, corruption and rents | Innovation/entrepreneurship | Educational quality, equity and training |
| Costa Rica | Financial inclusion/ development | Innovation/entrepreneurship | Labor market efficiency |
| Dominican Republic | Innovation/ entrepreneurship | Institutions, corruption and rents | Fiscal transfers |
| El Salvador | Innovation/ entrepreneurship | Financial inclusion/ development | Institutions, corruption and rents |
| Guatemala | Innovation/ entrepreneurship | Institutions, corruption and rents | Educational quality, equity and training |
| Honduras | Basic/ Digital infrastructure | Institutions, corruption and rents | Innovation/entrepreneurship |
| Mexico | Institutions, corruption and rents | Labor market efficiency, wage and non-wage compensation | Innovation/ entrepreneurship |
| Nicaragua | Fiscal transfers | Innovation/ entrepreneurship | Educational quality, equity and training |
| Paraguay | Innovation/ entrepreneurship | Institutions, corruption and rents | Educational quality, equity and training |
| Panama | Institutions, corruption and rents | Innovation/ entrepreneurship | Educational quality, equity and training |
| Peru | Institutions, corruption and rents | Innovation/ entrepreneurship | Educational quality, equity and training |
| Uruguay | Financial inclusion/ development | Innovation/ entrepreneurship | Labor market efficiency, wage and non-wage compensation |
| Venezuela | Institutions, corruption and rents | Innovation/ entrepreneurship | Financial inclusion/ development |
Note: Color coding corresponds to recurring issue areas by thematic focus. Priorities are based on LATAMs performance gap vis-à-vis the global best combining results from the Global Competitiveness Report 2015-16 and Inclusive Growth Report 2015.