MercoPress. South Atlantic News Agency

ECLAC underlines significance of EU investments in the region: 500bn in a decade

Ms Bárcena also called for “a more symmetrical, balanced and equitable relationship with Europe”

The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena called for “a more symmetrical, balanced and equitable relationship with Europe” during the first CELAC/EU academic summit in Santiago de Chile.

The most senior representative of this United Nations regional commission analysed the current socio-economic context of Latin American and Caribbean countries, as well as the region's opportunities for deepening its trade relations with the European Union.

Ms Bárcena highlighted that Latin American and Caribbean countries are learning from the past, applying macroeconomic prudence and progressive social policies, while Europe is accusing the welfare society of being responsible for the economic crisis.

Speaking to representatives from over 200 universities and study centres from both regions, Ms Bárcena added that “the welfare society was not the cause of the crisis, and whether it needs to be updated or reformed is a different matter. In Latin America, we aspire to a welfare society. This paradox is something we need to assess and discuss”.

The Executive Secretary based her presentation on the document “European Union and Latin America and the Caribbean: investments for growth, social inclusion and environmental sustainability”, which ECLAC  will make available to leaders attending the First Summit of the Community of Latin American and Caribbean States and the European Union (CELAC-EU) this week in the Chilean capital.

“We want foreign investment that helps us modernize our production structure, that contributes to employment, that helps us care for the environment and that respects social rights” insisted Ms Bárcena.

The EU is Latam and the Caribbean's main cooperation contributor, largest direct investor and second trading partner. Over the past decade EU invested an average 30 billion dollars per year in the region and currently foreign direct investment (FDI) is almost 500 billion dollars.

While EU investment has mainly targeted South America, United States has been the main source of FDI for Mexico, Central America and the Caribbean. The region's three largest economies (Brazil, Mexico and Argentina) received 80% of total investment between 2000 and 2009.

Ms Bárcena said the region values European FDI but with the following features: it promotes technology transfer; includes production investment that generates jobs and is characterized by good labour practices and social corporate responsibility.

Likewise innovation and research and development (R&D) activities of trans-national European enterprises have been highly significant in Latin America and the Caribbean, and represent about 64% of all such undertakings. These activities are a means of transferring technology and knowledge, increasing local technical capacity, generating spill-over productivity effects and creating highly skilled jobs.

Finally ECLAC Executive Secretary concluded by saying that investment in areas such as energy efficiency and renewables must be a priority.