Roundup: LatAm countries agree South-South cooperation key to curb inequality

The ranking of countries according to their GDP growth is ineffective in understanding inequality while bolstering South-South cooperation instead could better help Latin America overcome its obstacles, say experts.

GDP growth is incapable of reflecting inequality rates, as is the case of Latin American countries, according to some voices here at an ongoing regional conference.

In a speech Wednesday during the 36th session of the Economic Commission for Latin America and the Caribbean, Alicia Barcena, the UN agency's executive secretary, pointed to the fact that the World Bank lists 28 countries in the region as middle-income countries without recognizing any structural differences between them.

The World Bank has used this low, medium and high-income classification for over 40 years, based on GDP, but attendees at the meeting roundly rejected its applicability.

"Per capita income is also not the right indicator to measure the development of countries. Income divided by the population does not reflect absolutely who is receiving that income. This indicator is also obsolete," said Ricardo Herrera, director of the Chilean Agency for International Cooperation on Development.

He pointed to serious inequality within Chile, which is ranked as a middle-income country nevertheless.

"No country has said something about this until now. We are first to say these are not the right indicators," Herrera told Xinhua.

Salvador Arriola, director of international cooperation for the Iberoamerican Secretariat General, said it was "sad, dramatic and inefficient" that a criteria first used by the United Nations in 1971 is still used to define the development status of countries.

According to Arriola, this criteria determines the aid countries get from international banks, which demand strict concessions and charge high interest rates.

Arriola, a former Mexican ambassador to Uruguay and Guatemala, called for the creation of a new measure, which would take into account factors such as inequality, investments and the development of science and technology.

During the conference, countries from this region agreed that South-South cooperation is key to closing the equality gap. Nine countries spoke about future alliances under the umbrella of South-South cooperation, saying it is vital to progress across the region.

Barcena said further cooperation on a South-South basis in Latin America could also apply to collaboration with African nations, which face similar issues such as the governance of natural resources.

"We are at a very important time where we must define new paces and alliances in order to change our development model," Barcena said.

Gina Casar, executive director of the Mexican Agency for International Development Cooperation, said social projects and environmental efforts would also benefit from such partnerships in Latin America.

Such cooperation would work if it focused on mutual learning and avoiding the mistakes of the past, added Norma Vidal, Peru's deputy minister for development. Endi