Development and employment in Latin America and the Caribbean a look ahead, document prepared by the Research Department of the ILO for the 18th American Regional Meeting

Latin America and the Caribbean has, generally speaking, shown greater resilience in the face of the current economic crisis than other regions, both in terms of economic growth and employment. The countries of Latin America have performed well economically and their labour markets have not been particularly affected, in spite of the uncertainty that the global economy is currently experiencing. This notwithstanding, the region faces the challenge of capitalizing on its numerous achievements, whilst not losing sight of its weaknesses. This document presents the most recent trends with regard to economic growth and employment in the region. In this context, it reflects on the slowdown in economic growth that has been observed recently in various Latin American countries, and highlights the different macroeconomic and labour-market challenges that the region confronts. Specifically, the paper advocates a more diversified productive structure that would favour the export of products with higher value added - which, in turn, requires investment in education to develop a workforce possessed of the skills needed for this structural change.Latin America and the Caribbean must also address the social challenge posed by the need to reduce income inequalities, extend social protection and reduce the weight of the informal sector in the region’s economy. Lastly, this document argues for the importance of designing and coordinating a set of policies to be implemented at both national and international level. Stronger regional economic integration and the promotion of internal sources of growth would contribute to industrial development and the diversification of the economic base. Also, better regulation of financial flows and stimulation of public and private investment would lead to stronger macroeconomic stability. With regard to social and labour-market policies, programmes that transfer cash to households, as well as measures that support the transition to formality, are extremely useful tools to fight poverty and social exclusion, and to promote inclusive economic growth. Finally, it is fundamental that these social protection measures be complemented by well-designed active labour-market policies that support the integration into the labour force of those most at risk of exclusion.