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Latin America in the Global Economy

The Georgetown Americas Institute’s Latin America in the Global Economy (LAGE) program is a multiyear initiative to advance research and promote dialogue within the academy and with governments, the private sector, and civil society around the most critical economic challenges facing the region. A critical focus will be the emerging position of Latin America and the Caribbean (LAC) in a new global economic trade architecture characterized by deep structural changes.

In 2023 with the support of CAF - Development Bank of Latin America, the LAGE program will support a one-year research effort focused on untapped opportunities in global value chains (GVCs). The global economy is changing, bringing new challenges and opportunities for Latin America and the Caribbean (LAC). LAC is emerging from a COVID-19 crisis that led to one of the most dire recessions in its economic history, and the Russian invasion of Ukraine added to the gravity of the situation. Even before these shocks, there was already debate about the extent to which the world economy had been disrupted and entered a new phase of de-globalization with governments around the world reacting by recalibrating their trade and integration policy strategies.

In this context, there are high expectations in some policy circles around a potential reorganization of global value chains (GVCs) with the reshoring and nearshoring of manufacturing and service sector jobs. Driven by a flight to resilience and timeliness and changes in technology and labor costs—all accelerated by trade tensions with China, the COVID-19 shock and the invasion of Ukraine—this reorganization is expected to allow the region to overcome its historically low participation in GVCs. Recently, national security and geopolitical concerns have been added to the discourse on GVCs with concepts such as friendshoring.

There is, however, considerable uncertainty about this process of reorganization of GVCs and its likely impacts on LAC. If countries in the region want to seize the opportunities created by these changes, they still need to deepen their integration in the global markets and access world-class inputs and technologies, and in addition invest in high quality infrastructure, modern logistics, and sound regulatory practices.

To address these critical questions for LAC the Georgetown Americas Institute and CAF-Development Bank of Latin America have collaborated to launch a joint research program on Latin America: Untapped Opportunities in Global Value Chains. This program will bring together a group of highly recognized LAC experts to address knowledge gaps in existing research and ensure its relevance for policy discussions and private sector strategies. The program will consist of six studies, combining different methodological approaches, to provide a comprehensive assessment of LAC participation in GVCs and its potential and readiness to face a new emerging policy environment regarding the evolution of GVCs.

Publications

Towards a New Geometry of Global Value Chains: Lessons for the G20

October 16, 2024

Following an unprecedented surge in globalization post-WWII, notably accelerating from the mid-1980s until the 2008 financial crisis (referred to as 'hyper-globalization'), a subsequent period of 'slowbalization' emerged. The aftermath of the financial crisis witnessed a series of shocks, including…

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