FAO Regional Office for Latin America and the Caribbean

Latin american challenges in the new global economy - J. A. Berdegué on behalf of DG J. Graziano da Silva

Buenos Aires, Argentina, 13th december 2017.

It is a distinct honor to take part in this Session representing the Director General of FAO, Dr Jose Graziano da Silva.

Like any developing region Latin America and the Caribbean has multiple challenges. The 17 interrelated SDGs and the 169 targets represent our agreed upon formulation of what we need to do in terms of creating a better future for each and for all.

However, in the time that I have in this session, I would like to highlight one particular challenge: reducing the structural inequalities that affect Latin America and the Caribbean, some of which have a particular manifestation in rural societies.

Inequality is not a new challenge in this region. In fact, one could argue that inequality is the original sin with which our countries began their history. The whole of the Inca Empire, covering modern-day Ecuador, Peru, and parts of Argentina, Bolivia and Chile, was divided into about 5000 Encomiendas, while millions of members of the original civilization were left with nothing. Such was the origin of our economies and of our societies.

The old challenge of pervasive and persistent inequality continues to act as a powerful break on the development potential of our region, and of our rural areas in particular. It reduces economic growth, it reduces the impact on poverty of such growth, it weakens our democracies and the rule of law, it erodes our formal institutions, it prevents millions from expressing their full development potential.

Economic inequality is perhaps the most talked about expression of this challenge. The Gini index of rural income is in the high 40s in countries that have embraced agri-food trade, like Brazil, Chile, Colombia, Mexico and Peru.. In all of these countries, rural income has shown significant growth, in part thanks to agrifood trade, but the rural Gini index has barely moved, meaning that few are capturing most of the benefits. In fact, Chile, Mexico and Peru are leaders in terms of the share of their agricultural value added that is exported, but they are also leaders in rural economic inequality.

Ethnic inequality is another manifestation of this challenge. In Mexico there are 2.4 indigenous individuals that are chronically undernourished, for each non-indigenous person. In Guatemala it is 1.4; in Honduras 1.7; in Panama 3.2. In total, there are close to 45 million indigenous citizens in the region.

Gender inequality in rural areas is also pervasive. In Chile there are 137 rural women living in poverty, for every 100 men. In Uruguay, 143. In Costa Rica, 125. Three countries that are deeply engaged in global agrifood markets, but where, somehow, rural women appear to benefit far less than rural men do from the opportunities of trade.

We all know that many rural men and women register significant amounts of unpaid work. But in nine countries for which we have data, between 65% and 86% of the total labor of rural women is unpaid, and this is between 38 and 58 percentage points greater than the same statistic for men.

Territorial inequalities are another expression of the structural unbalances affecting this region. Central and Northern Mexico vs the South; the Coast of Peru and Ecuador vs the Highland; Bogota vs the Caribbean region in Colombia; the Pacific vs the Caribbean coasts in Nicaragua; the Brazilian South and the phenomenal Cerrados, vs the Northeast.

There are deeply ingrained structures and institutions that sustain and reproduce these inequalities. Eroding the power of these structures and institutions is not a simple task under the best of circumstances.

We have examples were agrifood trade has been a positively disruptive force not only in economic terms but also in creating more opportunities for sectors of the population that had been left behind not for decades but for centuries. However, so far, these examples are too few, perhaps more the exception than the norm. At FAO, we propose that making trade socially inclusive must be the norm, the standard that we aspire to. It will only happen if we make it an explicit objective. Unless we do so, it will be an uphill struggle for rural Latin America and the Caribbean to meet the 17 SDGs with their 169 targets.

Thank you very much.