CAF is committed to a green and digital economy in Latin America after COVID

The Development Bank of Latin America-CAF promotes the strengthening of multilateral action to achieve economic recovery in the region
CAF's Executive President, the Colombian Sergio Díaz-Granados, in an interview with EFE.

EFE/Rodrigo Jiménez  -   CAF's Executive President, the Colombian Sergio Díaz-Granados, in an interview with EFE

The Development Bank of Latin America-CAF is committed to a green and digital economy, together with a strengthening of multilateral action, to achieve economic recovery in the region after the scourge of the pandemic.

"In the case of Latin America, the recovery must necessarily be green, digital and focused on people," said the executive president of CAF, the Colombian Sergio Díaz-Granados in an interview with Efe.

The new head of CAF, who took office on 2 September, insists that "the pandemic leaves the region poorer, more indebted and with more deaths compared to the global situation, and this is a reality that must be taken as a starting point at this time".

Díaz-Granados recalls that, with just 8% of the world's population, Latin America accounts for more than 30% of the total number of deaths.

According to the latest data from the World Health Organisation (WHO), Latin America and the Caribbean has registered 1.4 million deaths, out of a total of 4.6 million worldwide, with a population of more than 600 million inhabitants, compared to 7,900 worldwide.

Therefore, he insists: "The response to this challenge that COVID has left us with is a multilateral response, a response that requires a combination of coordination and mobilisation factors to prepare our governments to overcome what the pandemic has meant so far".

A green and digital solution

A change in the energy matrix to reduce the carbon footprint or boost reforestation to combat climate change are some of the CAF's proposals for the immediate future.

To this end, its president wants to turn this entity "into an active bank in green financing", and therefore proposes to increase the 26% of financing dedicated to this type of activity that it had in 2020 to 40% in 2026, with projects that can range from climate action to biodiversity.

"If the world wants to move towards carbon neutrality, Latin America must necessarily be taken into account," he explains, citing reforestation as an example.

And in the face of the digital divide left by the pandemic, with huge rural areas where the lack of coverage deprived thousands of children and young people of education during the months of confinement, CAF is committed to digitalisation for economic reactivation.

"The basis of the reactivation must be digital, to quickly make up for lost time, and it must also have young people and women at the centre of the action (...), the two labour markets that are most difficult to break the inertia of unemployment," says Díaz-Granados.

To this end, he insists on working much more on "preparing infrastructures in the territories".

Integration

The new Executive President of CAF explains that he sees a great interest "in recovering and improving physical integration in Latin America", in border posts, in electrical interconnection, in digital integration, in improving trade in services (...).

Although he acknowledged that in the end, what mobilises integration is "political will". "We will move forward to the extent that the partners want to do so and we will be ready to continue promoting initiatives," he concludes.

However, he insists: "The global voice of Ibero-America will be better and stronger to the extent that we are more coordinated".

With regard to the role of Spain, which will celebrate its 20th anniversary as a member of the CAF in 2022, Díaz-Granados wants Spain to be a "platform" for involving new partners in the European Union.

Díaz-Granados, who visited Spain this week for two days, held meetings with the First Vice-President of the Government and Minister of Economy, Nadia Calviño, and with the Third Vice-President and Minister of Ecological Transition, Teresa Ribera, as well as with the CEOE, Spain's main business organisation, among other entities.

The Development Bank of Latin America-CAF is made up of 17 Latin American and Caribbean countries, as well as Spain, Portugal and 13 private Latin American banks. It has 13 offices to attend to the projects developed in the region.