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Productivity in LAC has not grown fast enough to keep pace with or significantly close the gap with advanced economies. Over the past two decades, labour productivity accounted for just one quarter of average GDP growth in LAC, while it has contributed as much as 80% in other emerging economies. The OECD supports the region in the design and implementation of productivity enhancing reforms, including strengthening competition and improving the investment environment. The work programme also helps to diversify economies through trade and foster better integration into regional and global value chains, while reducing overdependence on natural resources. The OECD supports LAC countries to foster innovation and SME uptake of new technologies, and improve formal employment and skills.

Innovative social policies implemented in LAC since the 1990s have contributed to a reduction in poverty and inequality.? Yet most of those who escaped poverty are now part of a new vulnerable middle class that makes up 40% of the population. Those belonging to this socio-economic group have low quality and usually informal jobs associated with low social protection and low, often unstable, incomes. The OECD helps to identify avenues to strengthen LAC’s social protection systems to break the vicious circle of poverty and informal employment. It helps the region address the deep causes of the stagnation of social mobility, by improving the equity and quality of education and health systems, expanding early child education and the care economy, and facilitating greater participation of women in the labour force. It also helps reduce territorial disparities by empowering communities through innovative tools such as digital inclusion, financial inclusion, and the social and solidarity economy.?

70% of Latin Americans have low or no trust in their government. The erosion of trust puts democracy at risk, encourages political polarisation, and undermines growth and social cohesion by reducing investor and consumer confidence. It also weakens the effectiveness of public policies, programmes and regulations that depend on citizens’ co-operation and compliance. The OECD supports governments in the design and implementation of comprehensive strategies to promote government integrity, combat bribery and corruption, improve the civil service and digital government for a more efficient public service delivery, and enhance open and participatory regulatory and policy processes. All of this enhances trust, which together with strategies to curb tax evasion, increases revenue collection and strengthens institutions.

The LAC region is highly vulnerable to climate change, with 18% of global extreme weather events associated to climate change concentrated in the Americas. The related economic damage represents 45% of global material losses to weather events in the last 50 years. At the same time, more than a quarter of the region’s primary energy and more than 60% of electricity generation come from renewables, twice the global averages. LAC is a major producer of critical minerals, accounting for 40% of global production of copper and 35% of the world’s lithium supply. LAC also has significant potential in graphite, nickel, manganese and rare earth elements production. The OECD supports the region to design and implement comprehensive environmental sustainability strategies, to strengthen resilience to climate related events, while also advising governments on alternatives for financing a green and just transition.?