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Regional Industry Regional Industry Consultation in Latin Consultation in Latin America and the America and the CaribbeanCaribbean

Programa de las Naciones Unidaspara el Medio Ambiente

Programme des Nations Unies pour l’EnvironnementUnited Nations Environment ProgrammePrograma das Naçoes Unidas o Meio Ambiente

Oficina Regional para América Latina y el CaribeOficina Regional para América Latina y el CaribeRegional Office for Latin America and the CaribbeanRegional Office for Latin America and the Caribbean

Brazil, October Brazil, October 20012001

Dr. Diego Masera

Regional Industry Programme Co-ordinator

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Economic Growth in Latin America and the Caribbean

1981-1990:1981-1990:The Lost Decade

•Growth less than 1 percent annually• External debt crisis

• 200 million people in poverty•Introduction of the model based on the

opening of markets and globalisation

THE EXPORT MODEL

1950-1980:1950-1980:Import Substitution Model (ECLAC)

Growth more than 5%on average, annually

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Economic and Social Situation in 2001

- In México, is $160 billion dollars- In Central America is $17 billion dollars

1990-2000:1990-2000:

•Economic growth of 3.2% annually• Poverty Growth: 224 million of persons in 1999 (12%)• Increased inequity: 20% > income 20% < income• Increased unemployment• Lower salary value• 500,000 professionals left the region• Increased External Debt

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The Industry in 2001

• Economic Model based on the intensive exploitation of natural resources • Increased export level of pollutant industries (steel, aluminium, etc.)

• LAC region main exports are: - Minerals - Agricultural products - Wood - Fish - Other products from the “maquila” with only 3% of national inputs

• Industry of low added value products

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The Industry in 2001

• Increased unemployment and informality

•Reduction in research and development of (cleaner) technologies

•Export done by a small number of large industries

•95% of the enterprises are MSEs and offer 85% of employment

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Some problems faced by MSEs

•MSEs lack contractual power and have higher costs of inputs •Excesive fiscal requirements

•Lack of access to funding

•High interest rates

•Lack of qualified workers

•Complex and inneficient Government structures

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Environmental Impact

- In México, 600,000 ha per year

- In Central America, 200,000 per year

Corredor Biológico Mesoamericano

Environmental degradation:

• Loss of forests 4.5 million ha of forests lost annually

• Degraded soil 243 million ha in South America, and 65 million ha in Mesoamerica

• Biodiversity Thousands of endangered species and many extinct

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Environmental Impact

• Water - High level of pollution In Central America, only 2% of wastewater is treated. In Mexico, 13% - Critical supply in some areas

• Coastal Marine Zones Contamination Loss of mangroves (65% loss) Damage to coral reefs Sediments Chemicals High exploitation of marine resources

Industrial Waste Tourism

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Sustainability?

+ Disasters+ Vulnerability+ Insufficient Growth+ Poverty+ Unemployment+ Inequity

SUSTAINABLILITY?

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Need for change

• Rethink the relationship between environment and trade and ‘domesticate’ globalisation

• Aim at an economical growth of at least 6% annually

• Search for a solution to external debt problems

•Reduce volatility of capitals

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Productivity needs

•Increase social spending - better health services - more and better education - increased productivity

•Reduce pressure on natural resources

•Develop internal markets

•Increase support to MSEs

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Productivity needs

• Increase Private Investment More and better paid jobs

•Promote the creation of industrial clusters

•Increase exports of high added value products from diversified sources and low environmental impact industries

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International Commitments

• Fullfilment of commitments by developed countries in relation to Agenda 21 and the Rio Declaration

• Kyoto Protocol: stabilization of greenhouse gases to prevent disasters

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Some environmental that need improvement

• Solid waste Only 40% are adequately managed

• Polluted waterTreatment and re-use of

urban and industrial water

• Air pollution Transportation Industrial emissions

Climate Change

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•Wider use of renewable energy and promotion of energy saving

•Handling and treatment of toxic materials and waste

•Sust. management of forests

•Development and use of cleaner technologies

Report Recommendations

Some environmental that need improvement

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• Promote the industry’s competitivity but with a rational and sound use of natural resources and the environment

• Ensure private sector pro-active participation in the design and development of national and international environmental laws and rules

• Promote technical training and the development and adoption of cleaner technologies

Report Recommendations

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• Promote sustainable tourism

• Develop the internal market in each country

• Promote the production of high added value products

• Promote and integrate the MSEs as central elements of a sustainable industrial development

• Reduce dependency on highly pollutant industries

Report Recommendations

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• Develop economic incentives and avail funds for cleaner production

• Increased access to capital at competitive rates

• Promote innovation and industrial clusters

• Fight poverty and social inequity

• Develop and use a regional model of indicators of sustainable industrial development

Report Recommendations

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Programa de las Naciones Unidas para el Medio AmbientePrograma das Naçoes Unidas o Meio Ambiente

Oficina Regional para América Latina y el Caribe

Blvd. de los Virreyes 155, Lomas de VirreyesCP 11000 México, D.F., MEXICO

http://www.rolac.unep.mxhttp://www.rolac.unep.mx