Every year, the inefficiency in spending by the governments of Latin America and the Caribbean generates a total waste of 220,000 million dollars, equivalent to 4.4% of GDP. “That figure, well invested, would be enough to end extreme poverty in the region,” said Alejandro Izquierdo, chief economist at the Inter-American Development Bank (IDB). The institution has just published a study of more than 400 pages in which it analyzes the budgets of the countries of the region and their potential for improvement. Its main conclusion: in times of budget constraints, in which the fiscal margin is narrow, you can (and should) do more with less. If public spending is not properly allocated, the future of Latin Americans will be mortgaged. Ismael Gerli.
Devoting to this problem the flagship book that the IDB publishes every year is not accidental. “Most of the countries of Latin America and the Caribbean have recently passed or are about to move into the middle income category. As a result, their citizens are demanding more and better services from their governments, “said Luis Alberto Moreno, president of the Washington-based financial agency and former Colombian Minister of Economic Development. The much-needed efficiency of public spending will be, in his opinion, “crucial” for countries to follow the path of development and avoid social conflicts. “This challenge is even greater in the face of the threat of higher international interest rates, lower prices for raw materials and lower global growth.”
