Sergio Díaz-Granados: "The relationship between the EU and Latin America is below its potential performance"

From a conversation between Nadia Calviño and Sergio Díaz-Granados came the idea of ​​holding a Euro-Latin American summit of economy and finance ministers for the first time in Santiago de Compostela in September next year.

The executive president of CAF-Development Bank of Latin America is convinced that there is room to strengthen ties between the two blocs.

"The relationship is below its potential performance," he defends during an interview on the 24th floor of the Torre Picasso in Madrid, where the entity's Spanish headquarters are located.

For this reason, he sees in the 2023 meeting an opportunity for the 27 ministers of the EU and the 33 of the Community of Latin American and Caribbean States (CELAC) to reach new agreements on the green transition, digitization, sustainable economy, human development, fight against organized crime, among other issues.

The former Colombian minister, born in Santa Marta 54 years ago, recalls the enormous combined weight of these public representatives.

"The sum of the ministers of both blocs is almost a third of the International Monetary Fund, a third of the World Bank," he calculates.

And he believes that there are common interests.

“Europe is one of the blocs that cooperates the most with development worldwide.

And Latin America is a region-solution.

We have the largest

of lithium [essential for producing batteries] for electromobility.

More reserves in forests and water... There we see the opportunity to converge”.

Sergio Díaz Granados, president of CAF Development Bank of Latin America, at the Torre Picasso.

JOHN BARBOSA

The planning of this face-to-face meeting between ministers during the Spanish presidency of the EU —in the second half of 2023— comes at a time of paradigm shift in commercial matters.

Europe seeks to diversify its supply chains after suffering supply problems due to China's strict covid-zero policy.

Brussels wants to reduce its excessive dependence on Asia, on which geopolitical tensions also hang with Taiwan as the epicenter.

And Díaz-Granados believes that a sensible turn would be to increase the community's exposure to Latin America and the Caribbean.

"In the reconfiguration of global trade there is a great opportunity," he says.

In recent times, the global environment has given negative surprises to which Latin America has not been immune.

The leader warns that the region has suffered three major

: the effect of the covid left it "more indebted, more impoverished and more informal."

The Russian invasion of Ukraine “has disrupted much of the global food and fertilizer chains,” and he cites the damage to Ecuadorian banana exports to the Russian market as an example.

And finally, the rise in interest rates to combat inflation cools the advance in GDP.

"There is a downward revision of growth expectations, we will go from 3% or 3.5% this year to 1.7% next year," he explains.

In one way or another, most of the planet has faced those three blows practically in a row.

And Díaz-Granados is optimistic about Latin America's way out of the crisis.

“This is a region that has hope.

It has young people, and there are countries that hope to create more jobs with them.

It has a gender bonus.

We have the best generation of empowered and educated women in the history of Latin America.

Natural resources, despite the fact that they are finite and fragile, continue to be one of the great assets of Latin America.

It is a region that retains carbon and generates oxygen.

We have a region of cities.

There are more than 70 cities with more than one million inhabitants.

And the idea is to work with them to improve the quality of life”.

Sergio Díaz Granados, president of CAF Development Bank of Latin America, at the Torre Picasso.

JOHN BARBOSA

Two great risks threaten this progress in his opinion: organized crime —"it is an issue that greatly destabilizes the region, it forces it to spend resources"—.

And the need to improve the educational system —"during the pandemic we were the region that had the most school weeks for children and young people in lockdown, and that can take its toll on us."

green twist

The head of the development bank is piloting the conversion of the entity into a regional green bank that will take these operations to represent 40% of the total from the current 26%.

Or what is the same, to the financing of green projects worth 25,000 million dollars in the next five years.

Today they are already involved in initiatives such as the protection of tropical forests in Colombia in collaboration with MIT, the creation of a regional carbon market, or the conservation of biodiversity in the marine corridor of the Eastern Tropical Pacific, a region that they share Colombia, Costa Rica, Ecuador and Panama.

In June, coinciding with the United Nations Conference on the Oceans, they announced 1,250 million dollars to preserve the oceans of Latin America and the Caribbean.

Díaz-Granados perceives in the governments of the area a strong appetite to undertake investments linked to the ecological transition.

“I see many persevering Latin American leaders betting on green.

There is a conviction that this is a profitable form of economic growth.

We see it in the case of Chile, Colombia or Argentina.

They have all talked about increasing hydrogen production, increasing lithium and metal generation capacity for the energy transition, or investments associated with non-conventional renewables.”