Join us on Thursday, November 21, from 3:00 PM – 4:00 PM (ET) for a fireside chat with Kellie Meiman Hock and William Maloney as they delve into insights from the World Bank’s latest Latin America and the Caribbean Economic Review (LACER), addressing wealth taxes, investment trends, and new economic opportunities for the region.
RSVP here.
Although growth estimates are slightly higher than before, Latin America and the Caribbean show less dynamism compared to other regions of the world. Challenges remain, however, to redress fiscal imbalances and reduce debt, recover lost earnings power, and regain the advances in reducing poverty of the previous decade. Nor is there any prospect for substantially higher growth, which would help address those challenges. Investment, both public and private, remains depressed, and data suggest that the region is potentially missing the boat on “nearshoring” or “friendshoring,” the practice of bringing offshore operations to close or friendly countries.
Overcoming post-pandemic imbalances presents a valuable opportunity to address a long-overdue reform agenda. This agenda, crucial for the country’s progress, covers key areas such as infrastructure, education, regulation, competition, and tax policy. In the short run, the stubbornness of poverty and inequality is leading some governments to recur to take more direct measures, such as raising minimum wages to support the poor—with both positive and potentially negative consequences if not pursued with caution. Concerns have also surfaced about one dimension of poverty—food insecurity and the cost of an unhealthy diet.
Wealth taxes have moved to center stage in the global agenda, where such taxes are seen as a tool to reduce inequality, raise resources to fight global warming, and improve global governance. They also have the potential to raise growth, shifting the tax burden from productive investment—as noted, LAC’s taxes on firms are among the highest in the world— toward assets with likely less negative impact on economic dynamism. While greater reliance on wealth taxes has potential to address these goals, experience from the advanced economies suggests challenges in administration and sometimes unintended consequences depending on what type of wealth tax is considered.
Reforming the regional tax systems with an eye toward greater reliance on property taxes could increase equity, promote growth and generate fiscal space. The benefits will not be automatic, however. Investments need to be made in administrative capacity, and proper valuation is necessary to ensure progressivity.
Latin America and the Caribbean face persistent challenges with low public and private investment levels and rising debt, all restricting fiscal space. It also continues to grapple with longstanding challenges in infrastructure, education, productivity and violence, hindering its competitiveness. These challenges will come into sharper focus following discussions at the G-20, underscoring the need for actionable solutions to unlock the region’s economic potential. This conversation will explore how strategic investment and fiscal policies can pave the way for sustainable growth and equity. How can the region take advantage of nearshoring opportunities? What role could wealth taxes play in generating new fiscal space for countries? Which international forums and partnerships offer the most potential for advancing effective strategies to address these challenges?
Join us on Thursday, November 21, from 3:00 PM – 4:00 PM ET for a fireside chat with Kellie Meiman Hock and William Maloney as they delve into insights from the World Bank’s latest Latin America and the Caribbean Economic Review (LACER), addressing wealth taxes, investment trends, and new economic opportunities for the region.
This event will be held in English and will have simultaneous interpretation into Spanish.
Where? Inter-American Dialogue 1155 15 St NW, Suite 800, Washington, DC & Online
When? Thursday, November 21, from 3:00 PM – 4:00 PM ET
Please RSVP to receive information about this event
