Growing along the road
to social equality
• Interview with Alicia Bárcena, ECLAC executive secretary

Laura Bécquer Paseiro

THE Economic Commission for Latin America and the Caribbean (ECLAC) was established by the UN Economic and Social Council in 1948 to contribute to regional economic development, coordinate action to promote it and to reinforce economic relations among countries. Subsequently, its work extended to the Caribbean nations and the incorporation of a social development dimension. Headquartered in Santiago de Chile, it has two sub-regional bases: one for Central America in Mexico, and another for the Caribbean in Trinidad & Tobago.

Alicia Bárcena Ibarra, ECLAC executive secretary since 2008, talks with Granma about how the region has battled with the crisis and her assessment of the current process of updating the Cuban economic model.

ECLAC talks about the renewed role of the state because we are emerging from a period in which in which it became very clear that the self-regulatory market was not the solution, it was not helping us to solve the serious problems of distribution which we have. We are the most unequal region in the world and this is due, to a large extent, to the fact that a solely market based model leads to greater inequality. By definition, this proposal always privileges the winners, not because they are good or bad, but because the allocation of resources is made under other criteria.

We think that the role of the state is essential in order to regulate a market which is capable of encouraging initiative, innovation, efficiency, but always with a very clear idea of the development objectives being pursued. It is the state which can regulate economic activity in order to ensure that profits from productivity are distributed in a more equitable manner.

Every country must decide on the kind of model which it wishes to follow, the kind of balance which must exist between the state, productive entities and society. This is the so-called social pact. And it also moves through a fiscal pact where citizens decide how much to contribute and invest in their own progress. This taxation rate is what is going to generate income looking toward the future. The state creates policies to implement stability and economic growth, productive development, job promotion and greater social equality.

That is why it is fundamental to redefine the role of the state in order to generate appropriate conditions which will lead to sustainable development with equality. In other words, to propose a vision in which the state occupies a central role in economic and social growth.

The economic crisis, which had a severe impact on the region in 2009, exposed the structural deficiencies which are blocking progress in Latin America and prompted questions on its capacity to confront the new panorama.

The crisis destroyed social progress in Latin America. Having consolidated itself as the most unequal place in the world, a problem was created the solution of which lies in having to rethink the way in which the state was relegated in terms of economic decisions in recent decades.

However, the region has learnt many things from the past. I believe that it has macroeconomic wisdom, greater economic discipline. It has learnt how to manage inflation, the external debt and public finances more carefully. Latin America has succeeded in accumulating international reserves, but above all has understood that a society which is much more interconnected in relation to social issues is far stronger in the face of crises.

On the other hand, we still have many challenges. One of those is how to increase investment in infrastructure and production and retain the capacity to maintain social spending, particularly related to increasing human capital, and to concentrate investment in productive and social infrastructure.

In general terms, I believe that the region has made its way through this crisis much better than in other areas. We can see a deceleration of growth but not such a sharp fall as elsewhere. This resistance is due, fundamentally, to responding with fiscal stimulation, social and commercial programs, among others.

Bárcena also made reference to the process underway in Cuba of updating its economic model.

These guidelines for the economic and social policy of the Communist Party are defining how to advance toward more concrete and sustainable policies of financing development, which would come from the country’s own productivity, and with mechanisms of solidarity. Cuba has made a very serious commitment to fulfilling that. I perceive an atmosphere of enormous enthusiasm for implementing, moving forward, revitalizing, building.

It is also clear that Cuba is seeking a balance between what the state can resolve by itself and what requires a pact between it and society to take the country’s project forward.

There is a marvelous opportunity here to create a progressive fiscal and progressive base, in contrast to other countries where fiscal policies are inadequate because taxes are fixed on the basis of consumption and not on the heritage of productivity.

Fiscal policies require an element of solidarity, which is not an issue for the Cuban system, given that it is by definition equitable and cooperative.

The major challenge is how to preserve the magnificent achievements of the Revolution in relation to health, education, social equality; how to consolidate these social achievements through economic sustainability.