Latin America poverty linked to high levels of corruption
Imagine you have a million dollars to spare and you want to invest the money in a developing country. What’s the first aspect you look at before investing? Apparently, foreign capital looks at corruption levels first.
For developing or third world nations, it is difficult to attract foreign or even local investment if conditions do not allow for investors to feel safe about whether their cash will ever make it back to their bank accounts with a handsome profit.
“In recent years, multiple cases of corruption have come to light in several Latin American countries which have affected trust in public institutions, weakening the quality of political systems and growth.
This problem affects productivity and the investment agenda in vital sectors for the development of our countries such as infrastructure increases transaction costs and decreases the efficiency of public spending, which highlights that the confidence crisis “directly affects the business climate.
Corruption has in some cases prevented the basic needs of citizens from being met.
The need for Latin America to have strong and efficient institutions to face the development challenges of the region is the main focus of almost all national and international investment forums.
Although the outlook in Latin America and the Caribbean is not homogeneous and hides very different realities from one country to another, there is a hemispheric consensus on the need to promote an agenda aimed at strengthening government institutions, governance and foster integrity both in the public and in the private.
The Lima Commitment adopted at the 2018 Summit of the Americas is, in many expert opinions, proof of that.
A development bank established in 1970 and made up of 19 countries and 13 private banks in the region – gather different opinion leaders year after year to discuss the main challenges that the region faces in terms of development, but not even such important institution has been able to manage the negative influence of money laundering, drug cartel influence and kick backs from multinationals.