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On Planning for Development: Time for Equity: closing gaps, opening trails----------------Editor: Róbinson Rojas Sandford
From ECLAC  2012

Time for Equity: closing gaps, opening trails

Press Release

Deputy Executive Secretary of ECLAC:
"Planning for Development is Back in Latin America and the Caribbean"
Antonio Prado inaugurated the seminar in commemoration of the 50th anniversary of ILPES at ECLAC's headquarters, where the Colombian economist José Antonio Ocampo made a presentation

(2 July 2012) "Planning for development is back with a renewed strength and complex challenges," said today the Deputy Executive Secretary of ECLAC Antonio Prado, when opening the commemorative seminar to celebrate the fiftieth anniversary of the Latin American and Caribbean Institute for Economic and Social Planning (ILPES) at the organization's headquarters in Santiago, Chile.

ILPES was created by ECLAC on 2 July 1962 in the aim of supporting Latin American and Caribbean governments in the field of planning and public administration by providing training, consultancy and research services.

"Closing the multiple gaps in the region takes a long-term vision, strategic planning and long-lasting persistence," highlighted Prado at the international seminar that will conclude tomorrow. "The State must be capable of providing strategic management for the long run, looking ahead, and being involved in the design of strategies for guiding national development," he emphasized.

In this context, the high-level official announced that during ECLAC's Thirty-fourth Session, to be held from 27-31 August this year in El Salvador, the document Cambio estructural para la igualdad. Una visión integrada del desarrollo (Structural Change for Equality. An integrated vision of development), will be presented. The book elaborates on the concepts set forth in the document Time for Equality. Closing gaps, opening trails (2010), specifically proposing to strengthen the role of the State.

In the first day of the seminar, Jorge Máttar, Director of ILPES; José Antonio Ocampo, former Executive Secretary of ECLAC; and Juan Temístocles Montás, Minister of Economy, Planning and Development of the Dominican Republic also participated in the event, the latter having referred to the development of his country in the last 60 years.

Jorge Máttar recalled that "thousands of students have sat in the lecture halls of ILPES and have transmitted ECLAC's school of thought and expertise to their countries; many of these students have held or currently hold high-level positions within their governments and other institutions". In addition to this, he commented on the Commission's production of more than 2,500 publications on planning and development.

"ILPES is, has been - and we want it to continue being - a setting for learning, reflection and analysis of planning and development in Latin America and the Caribbean," he emphasized.

In his conference entitled El desarrollo latinoamericano y caribeño: retos, perspectivas y el papel de la planificación (Latin American and Caribbean development: challenges, perspectives and the role of planning), José Antonio Ocampo reviewed the recent economic history of the region, analyzed the current global crisis scenario and identified some challenges.

According to Ocampo, the most successful period for Latin America and the Caribbean when seen from the economic development perspective was from 1945 to 1980, when industrialization took place, as the region showed a GDP annual growth of 5.5%.

"Latin America has advanced in the last years in achieving a welfare state focused on assistance rather than universality, which is exactly what ECLAC has set as one of its current goals," said the professor from the University of Columbia, in the US.

On the current international economic crisis, the Colombian economist stated that "a possible breakdown of the euro would trigger an unprecedented crisis", as it would be the first time a reserve currency collapses. He called on the countries of the region to support regional integration and a more technology-based exports development, referring to the region's relationship with China as "highly unbalanced".

On social issues, he said "the fundamental agenda is that which has been defined by ECLAC in the last years and which is reflected in Time for equality, i.e. creating universal social development systems and carrying out great efforts for fiscal redistribution".

Finally, Ocampo mentioned that "the basic function of planning is to look at strategic options" and help countries "enable opportunities", as well as improving the institutional apparatus among Latin American States, "many of which show clear deficiencies".

On Tuesday 3 July, during the seminar's second day, former ILPES official Rolando Franco will make a presentation on the history of the Organization. Afterwards, the Minister of National Planning and Economic Policy of Costa Rica Roberto Gallardo will present his vision on the Planning Challenges in Latin America and the Caribbean with the comments of former directors of ILPES Alfredo Costa-Filho and Juan Carlos Ramírez, as well as current Director Jorge Máttar.

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Time for Equity: closing gaps, opening trails

Full document in PDF format (3553 kb)
Document in format epub (8915 kb)
Document in format mobi (10408 kb)
Cover, Contents, Foreword (PDF, 737 kb.)
Chapter I.- Crisis, post-crisis, new era: between the limits of development and the development we intended

A. The crisis: outbreak and outlook
1. Gauging the impact of the crisis
2. How the crisis caught up with Latin America and the Caribbean
3. Constraints and opportunities on the new international scene
4. The need for a new multilateral global architecture
5. The challenges of planetary climate security
B. The value of equality for the future
1. Taking the best of modern politics
2. Why now is the time for an equality agenda
3. Different but equal
4. The interaction of unmet needs
C. The issues before us

Chapter II .- Macroeconomic policy for development: moving on from lessons learned and charting a new course

A. Introduction
B. Achievements and shortcomings of macroeconomic reforms since the 1990s
1. Achievements
2. Shortcomings from the development perspective
C. Causes of instability in the real economy
D. Effects on growth and equity
E. The challenges of a macroeconomy for development
1. Countercyclical fiscal policy
2. Monetary policy
3. Exchange-rate policy, productive development and sustainable stability
4. Capital market reform
Chapter III.- Structural heterogeneity and productivity gaps: from fragmentation to convergence

A. Introduction
B. Heterogeneity among sectors and agents: external and internal convergence
1. Production structure and productivity dispersion
2. Productivity gaps and employment
3. Heterogeneity among agents: employment, wages and performance
C. Heterogeneity in the manufacturing sector: variations in the productivity
gap and specialization
D. Productivity gap and energy gap
E. Difficult choices
F. Incentive schemes and production policies
1. Macroeconomic structures and development policies
2. Microeconomic market incentives
3. Industrial policy 
4. Technology policy
5. SME-support policies
6. Towards an integrated agenda for production development
Chapter IV.-  Place does matter: territorial disparities and convergence

A. Introduction
B. The territorial dimension of inequality
1. Territorial heterogeneity in Latin America
2. Economic territorial disparities in Latin America
C. Hardship and segregation: regional and urban maps
1. The map of hardship in Latin America
2. Urban segregation as a replicator of inequalities
D. Policies for greater territorial equality and cohesion
1. Local development: many strategies, one aim
2. Institutional complexity and fiscal instruments
3. Territorial cohesion funds
4. Intervention criteria for urban segregation
Chapter V.-  Employment and labour institutions: the key to equality of opportunities and social inclusion

A. The vectors of equality and inequality in employment
B. Inequalities and gaps: the data speak for themselves
1. Labour market patterns at the aggregate level
2. Widening of the skills-wage gap
3. Distributive aspects of the production structure
4. Quality considerations
5. Labour-market integration of disadvantaged groups
C. Trends for the future
D. Policies for reducing inequality in the labour market
1. Labour institutions in the spotlight
2. Economic security and labour market inclusion: capacities, representation,
income and quality of work
3. The challenges of labour institutions: reconciling market efficiency and
protection of workers
Chapter VI.- Closing social gaps

A. Understanding and combating inequality
B. New approaches to social policy in Latin America and the Caribbean
1. Reforming the reforms of the 1980s
C. Structural parameters of well-being and social protection
1. Countries with severe well-being gaps
2. Countries with intermediate well-being gaps
3. Countries with small well-being gaps
D. The components of a welfare state
E. Towards a redistributive system of monetary transfers: when ethical
and pragmatic concerns coincide
1. Combating inequality and the juvenilization of poverty
2. Dealing with old-age insecurity
3. Towards a less vulnerable labour market: unemployment protection 
4. Summing up
F. The lever of education
1. Universalizing preschool education and extending the school day
2. Greater equality in secondary education outcomes, with smaller learning gaps
Chapter VII.- State, political action, fiscal policy and social covenants: an equation in the making

A. Where we are coming from
B. Where we want to go: recreating the link between the State and society
C. Towards a new State architecture: the main approaches for closing gaps and opening trails
1. The macroeconomic environment
2. Production convergence
3. Territorial convergence
4. More and better employment
5. Closing social gaps
D. Taxation as the key to linking the State with equality
1. The place of public spending in development
2. The progressive effects of income and expenditure
3. A progressive and efficient tax structure
4. The fiscal covenant for distributive equity
E. The importance of social covenants for equality and strategic development
1. Social covenants and equality
2. Labour covenants
3. Covenants and learning: a look at the positive experience of alliance-building between agents
4. By way of conclusion

Table I.1 Real GDP growth
Table I.2 Global and regional per capita GDP growth, 1970-2007
Table II.1 Latin America and the Caribbean (19 countries): GDP growth, 1971-2009 
Table II.2 Latin America (19 countries) and the world: annual variation in GDP, exports and non-export GDP, 1990-2008

Table III.1 Latin America (selected countries): productivity indices
Table III.2 United States: productivity indices
Table III.3 Latin America (selected countries) and the United States: internal convergence and relative productivity
Table III.4 Latin America (selected countries): relative productivity with respect to the United States
Table III.5 Latin America (selected countries): structure of employment, 1990-2008
Table III.6 Latin America (selected countries): share of employment, GDP and exports for different types of enterprises
Table III.7 Relative productivity of various agents compared with that of large enterprises
Table III.8 Latin America: trade balance
Table III.9 Research and development expenditures
Table III.10 Latin America (selected countries): spending by institutions that support small and medium-sized enterprises, 2005

Table IV.1 Latin America and members of OECD (both selected countries): variation in gaps between per capita GDP of the richest and poorest regions, by country
Table IV.2 Latin America (selected countries): summary of beta convergence outcomes, by periods

Table V.1 Latin America: relative labour income of urban employed working between 35 and 45 hours per week, by level of education and sex
Table V.2 Latin America: indicators of women’s labour market integration
Table V.3 Latin America: labour income of urban employed women working between 35 and 45 hours per week, relative to men, by level of education
Table V.4 Latin America: combinations of labour and social protection

Table VI.1 Latin America (country groups): selected well-being indicators
Table VI.2 Latin America (16 countries): coverage, benefits and poverty reduction achieved by transferring one poverty line to children aged under 5, around 2008
Table VI.3 Latin America (16 countries): coverage, benefits and poverty reduction achieved by transferring one half poverty line to children aged 5 to 14, around 2008
Table VI.4 Latin America (16 countries): coverage, benefits and poverty reduction achieved by transferring one poverty line to persons aged 65 and over, around 2008
Table VI.5 Latin America (16 countries): coverage, benefits and poverty reduction achieved by transferring one poverty line to unemployed persons, around 2008
Table VI.6 Latin America (16 countries): impact of a basic transfer on poverty and equity
Table VI.7 The Caribbean: public spending on education

Table VII.1 Latin America: tax revenue of central government, including social security contributions
Table VII.2 The Caribbean: tax revenue of central government, excluding social security contributions
Table VII.3 Latin America and Europe (selected countries): income inequality before and after taxes and transfers, 2008

Figure I.1 Growth in world trade by volume
Figure I.2 Latin America and the Caribbean: GDP growth, 2009
Figure I.3 Latin America and the Caribbean: per capita GDP growth, currentaccount balance and overall fiscal balance
Figure I.4 The Caribbean: GDP growth, 2002-2009
Figure I.5 Countries of the Organisation for Economic Co-operation and Development: real-term growth in actual and potential GDP, 2010-2014
Figure I.6 International trade volume growth
Figure I.7 Annual growth in external assets reported to the Bank for International Settlements, March 2006 to June 2009
Figure I.8 Scenarios for greenhouse gas emissions from 2000 to 2100 (in the absence of additional climate policies) and projections of surface temperatures
Figure I.9 Latin America and the Caribbean: ratio of per capita energy consumption to per capita GDP, 2007
Figure I.10 Latin America and the Caribbean: per capita GDP and energy intensity, 2007
Figure I.11 Latin America and the Caribbean: energy consumption growth, 1970-2007

Figure II.1 Latin America (19 countries): annual inflation rates, 1985-2009
Figure II.2 Latin America (19 countries): central government primary and overall balance, 1990-2008
Figure II.3 Latin America and developed countries: per capita GDP and income distribution, 2008
Figure II.4 Latin America (19 countries): gross fixed capital formation, 1970-2009
Figure II.5 Latin America (19 countries): annual variation in GDP and aggregate
demand, 1990-2009
Figure II.6 Latin America and the Caribbean: fiscal revenues and expenditures, 2008-2009
Figure II.7 Latin America (19 countries): external shocks and growth in aggregate demand, 1990-2009
Figure II.8 Latin America (19 countries): net capital flows and real exchange rate, 1980-2009
Figure II.9 Latin America (19 countries): output gap and gross investment rate, 1970-2009 

Figure III.1 Latin America (selected countries) and the United States: relative productivity and coefficient of variation
Figure III.2 Argentina, Brazil and the United States: wage variation coefficients
Figure III.3 Latin America (selected countries) and the United States: productivity and breakdown of industrial value added
Figure III.4 Relative productivity index of Latin America (selected countries) and productivity in the United States
Figure III.5 Latin America (four countries) and the United States: structure of energy consumption and productivity
Figure III.6 Brazil, Chile, Colombia and Mexico: energy gap and relative productivity compared with the United States, 1996-2006

Figure IV.1 Latin America: distribution of territories according to brackets of total GDP, around 2003
Figure IV.2 Latin America and OECD countries: territorial concentration and disparities, around 2003
Figure IV.3 Latin America (selected countries): sigma coefficient, 1990-2006
Figure IV.4 Latin America and the Caribbean (20 countries): prevalence of chronic undernutrition  (stunting), maximum and minimum values by country, according to World Health Organization (WHO) standards
Figure IV.5 Latin America: average structure of subnational revenues, 1997-2007

Figure V.1 Latin America and the Caribbean: labour market participation, employment and unemployment, 1990-2009
Figure V.2 Latin America: urban population employed in low productivity sectors, around 1990, 2002-2003 and 2007-2008

Figure VI.1 Latin America (16 countries): Gini index, 1990-2008
Figure VI.2 Latin America and the Caribbean: poverty, indigence, employment, unemployment and the Gini coefficient, around 2002-2008
Figure VI.3 Latin America (18 countries): trends in social public spending and total public spending
Figure VI.4 Latin America (15 countries): distribution of public expenditure on social welfare and examples of cash transfers under selected conditional transfer programmes, by primary income quintile, 2005-2008
Figure VI.5 Latin America: number of dependants per formal worker
Figure VI.6 Child poverty ratios around 1990, 2002 and 2008: children aged 0-14 compared with those aged over 14

Figure VI.7 Latin America (16 countries): cost of transferring one poverty line to children aged under 5, around 2008
Figure VI.8 Latin America (16 countries): cost of transferring half the poverty line to children aged 5 to 14, around 2008
Figure VI.9 Latin America (18 countries): percentage of households with a member aged 65 or over who receives a retirement benefit or pension, by income levels, around 2007
Figure VI.10 Latin America (16 countries): cost of transferring one poverty line to persons aged 65 and over, around 2008
Figure VI.11 Latin America (16 countries): cost of transferring one poverty line to the unemployed, around 2008
Figure VI.12 Latin America (16 countries): cost of all income transfers to vulnerable households and all households
Figure VI.13 Latin America (12 countries): children aged 3 to 5 attending an educational establishment, around 2007
Figure VI.14 Latin America (18 countries): lower and upper secondary school
completion among young people aged 20 to 24, by household income quintile and sex, around 2006
Figure VI.15 Educational outcomes and the Gini coefficient

Figure VII.1 Latin America (18 countries): Gini coefficient for primary per capita income and total per capita income of households, around 2008
Figure VII.2 Latin America and the Organisation for Economic Co-operation and Development (OECD): public transfers and Gini coefficient
Figure VII.3 Latin America and the Organisation for Economic Co-operation and Development (OECD): income tax and Gini coefficient
Figure VII.4 Global comparison of tax burden and per capita GDP in purchasing power parity
Figure VII.5 Latin America and the Organisation for Economic Co-operation and Development (OECD): tax revenue and per capita GDP, 2007
Figure VII.6 Latin America and the Caribbean and the Organisation for Economic Co-operation and Development (OECD): comparison of income taxation
Figure VII.7 Latin America (18 countries): people who believe that the tax burden is very heavy, by degree of confidence in tax spending and social gaps in countries, 2003 and 2005
Figure VII.8 Latin America (18 countries): confidence in political institutions by perception of fairness as regards income distribution, 1997-2007

Box II.1 Growth of the deficit in the Caribbean
Box II.2 Capital control: an ounce of prevention
Box IV.1 Territories of citizenship: an equality policy with a territorial focus
Box IV.2 Decentralization and equality in Latin America
Box VI.1 Social protection: beyond the contributory rationale
Box VI.2 Social spending and social investment
Box VI.3 Health systems: financing and stratification
Box VI.4 Methodology for estimating the costs of transfers

Diagram III.1 Matrix of production development and energy sustainability
Diagram III.2 Another empty box? The energy gap and the productivity gap, 1996-2006

Map IV.1 South America: population aged under 18 years with at least one serious hardship in smaller administrative regions, around 2000
Map IV.2 Central America: population aged under 18 years with at least one serious hardship in smaller administrative regions, around 2000
Map IV.3 Greater Buenos Aires: selected socio-economic indicators, 2001
Map IV.4 Mexico City: selected socio-economic indicators, 2000
Map IV.5 Greater Santiago: selected socio-economic indicators, 2002
Map IV.6 Metropolitan area

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