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Responding to Discontent in Latin America and the Caribbean: A Case for More Inclusive Ownership

Rita Da Costa, Adriana Caicedo, Martina Lejtreger - OECD • 25 April 2022
Uploaded by GPEDC • 25 April 2022

Rita Da Costa, Senior Counsellor and Head of Development in Transition at OECD Development Centre

Adriana Caicedo, Policy Analyst at OECD Development Centre 

Martina Lejtreger, International Consultant


The COVID-19 pandemic has made it clear that international co-operation can no longer rely on a one-way transfer of funds or expertise, but rather on equal multilateral partnerships based on shared interests, experiences and reciprocity. The ability of international co-operation to address current global challenges will determine both its transformative potential and the strength of recovery globally. 
 
Since late 2019, mass demonstrations unfolded in the Latin America and the Caribbean (LAC) as a response to deepening economic disparity, inequalities and social injustice. Protests in LAC countries can be related to governments’ insufficient responses to structural vulnerabilities or persisting development traps but they are also reinforced by unregulated global megatrends and lack of international frameworks governing an increasing interconnected world. All of which have an impact on the rising inequalities and lack of opportunities for citizens in the region.  Climate change, offshoring, over-financialization of the economy, tax challenges arising from digitalization, or the debt crisis are just some of these megatrends that urgently require collective action among countries. However, despite efforts under the current global governance architecture, most of these global phenomena are still largely unregulated. 
 
This discontent in the region can be traced back to these weaknesses in global governance, with international institutions and the international system needing to become more horizontal, representative and effectiveInternational economic asymmetries are becoming harder to ignore, especially now that the pandemic has further narrowed LAC countries’ fiscal space, particularly for those with high debt levels prior to the crisis. This in turn reduces public institutions’ capacity to respond to citizens’ needs and move forward towards a new social contract. 
 
Responding to this discontent in the region implies considering citizens’ voices and claims, both at the national and the international level. There is a need to embed the countries' perspectives in the national reform agenda by considering ground realities regarding the demand for and use of foreign development finance. Mechanisms to put this in place are lacking today. A shift in international co-operation needs to address weaknesses in global governance institutions and asymmetric, top-down decision-making structures.
 
Now it is clearer than ever that breaking the vicious cycle between global megatrends and social discontent at the national level requires engaging in international partnerships that take unorthodox routes with and count on wide stakeholder support. The multilateral system needs to promote a process of experimentalism and empower citizens, employing a broader set of tools, with the guidance of a wider range of voices, including those of the discontented themselves. In fact, most people in the region recognize international co-operation to be part of the solution. Almost 50% of Latin Americans and Caribbean citizens surveyed were in favor of more co-operation after COVID-19, and 70% think it is essential to deal with current global challenges (Figure 1). Globally, 81% of people in advanced economies support multilateralism, reinforcing the idea that countries should act as part of an international community that works together to solve shared problems. Both of these are good signs towards an active involvement in providing new co-operation frameworks and tools.

 

Figure 1. How Latin American and Caribbean citizens perceive international co-operation

 

Source: OECD et al. (2021), Latin American Economic Outlook 2021: Working Together for a Better Recovery, OECD Publishing, Paris, https://doi.org/10.1787/5fedabe5-en

 

In order to change the current pattern of things, Latin American countries and their citizens, and all developing countries, should shift from being at the end tail of current global dynamics and in turn become active players in the shaping of new multilateral solutions that ensure their wellbeing as well as the provision of global public goods. This calls for all countries in the multilateral system to reassess the meaning of country ownership and the value of inclusive partnerships, as well as their means of implementation.
 
First, country ownership was upheld since the Paris Declaration as the means through which “countries set their own national development priorities, and development partners align their support accordingly while using country systems”. Ownership approaches can be differentiated in three broad categories: ownership of priorities (what development activities take place), ownership of implementation (who is accountable for a set of results), and ownership of resources (how development activities are funded).
 
The post‑COVID‑19 international co-operation needs to revitalize this principle by experimenting new ways of leveraging Southern perspectives in multilateral spheres, putting developing countries’ and their citizens’ interests in negotiating tables and endowing international co‑operation with local level context and knowledge. Guaranteeing ownership of priorities should therefore start from the very onset, by reframing multilateral arenas and agendas to fit all countries at all development levels and better aligning national and international goals. Country ownership can be reaffirmed as an active principle instead of a passive one, meaning that citizenry and governments must play a role in defining core development priorities of countries, avoiding policy incoherencies, allowing for the required adaptation to specific contexts, and this way try to overcome the trade-offs between country ownership and development partners’ priorities.
 
Second, more participatory international partnerships are especially important for frontier policy issues such as the ones posed by global megatrends. Effective governance of climate change, international migration, the digitalization of the economy and other issues on a pressing implementation track requires significant social change, a dialogue on equal footing and bottom‑up collaboration that provides multilateral policy makers with early and relevant insights. For LAC countries, this could mean redefining spaces for external debt negotiation, given it has become the most indebted region in the world, with the highest share of external debt service in relation to exports of goods and services (57%).
 
The principle of inclusive partnerships, which recognizes the different and complementary roles of all actors, could also be re-discussed with a people-centered focus. A reflection needs to take place on what the new mechanisms of participation would look like, and how they could guarantee inclusive and effective policy dialogue. Strategic questions that remain are: What benefits does participation bring and to whom? Who should participate in the international co-operation process? When and how should the various stakeholders be included? 
 
The active participation of representative groups of civil society, the private sector, subnational governments and the academy in the agenda‑setting process of international co‑operation would increase the legitimacy of its mission, turning it into an opportunity to connect global governance more closely to citizens’ daily concerns. Nevertheless, to address social discontent, multi‑stakeholder platforms should avoid clustering constituencies without considering power imbalances. 
 
Looking forward, there are initiatives on where the debate should lead us. Experts have suggested the launching of a new global conversation, based on real-time knowledge and evidence, with a balanced participation of the Southern and Northern providers as well as new actors of development co-operation including the private sector and philanthropy. All perspectives will be essential in the upcoming months to reassess how to ensure effective development co-operation.