1 Regional Industry Consultation in Latin America and the Caribbean Programa de las Naciones Unidas para el Medio Ambiente Programme des Nations Unies pour l’Environnement United Nations Environment Programme Programa das Naçoes Unidas o Meio Ambiente Oficina Regional para América Latina y el Caribe Regional Office for Latin America and the Caribbean Brazil, October 2001 Dr. Diego Masera Regional Industry Programme Co-ordinator

2 Economic Growth in Latin America and the Caribbean : : The Lost Decade Growth less than 1 percent annually External debt crisis 200 million people in poverty Introduction of the model based on the opening of markets and globalisation THE EXPORT MODEL : : Import Substitution Model (ECLAC) Growth more than 5% on average, annually

3 Economic and Social Situation in In México, is $160 billion dollars - In Central America is $17 billion dollars : : Economic growth of 3.2% annually Poverty Growth: 224 million of persons in 1999 (12%) Increased inequity: 20% > income 20% < income Increased unemployment Lower salary value 500,000 professionals left the region Increased External Debt = 19 1

4 The Industry in 2001 Economic Model based on the intensive exploitation of natural resources Increased export level of pollutant industries (steel, aluminium, etc.) LAC region main exports are: - Minerals - Agricultural products - Wood - Fish - Other products from the “maquila” with only 3% of national inputs Industry of low added value products

5 The Industry in 2001 Increased unemployment and informality Reduction in research and development of (cleaner) technologies Export done by a small number of large industries 95% of the enterprises are MSEs and offer 85% of employment

6 Some problems faced by MSEs MSEs lack contractual power and have higher costs of inputs Excesive fiscal requirements Lack of access to funding High interest rates Lack of qualified workers Complex and inneficient Government structures

7 Environmental Impact - In México, 600,000 ha per year - In Central America, 200,000 per year Corredor Biológico Mesoamericano Environmental degradation: Loss of forests 4.5 million ha of forests lost annually Degraded soil 243 million ha in South America, and 65 million ha in Mesoamerica Biodiversity Thousands of endangered species and many extinct

8 Environmental Impact Water - High level of pollution In Central America, only 2% of wastewater is treated. In Mexico, 13% - Critical supply in some areas Coastal Marine Zones Contamination Loss of mangroves (65% loss) Damage to coral reefs Sediments Chemicals High exploitation of marine resources Industrial Waste Tourism

9 Sustainability? + Disasters + Vulnerability + Insufficient Growth + Poverty + Unemployment + Inequity SUSTAINABLILITY?

10 Need for change Rethink the relationship between environment and trade and ‘domesticate’ globalisation Aim at an economical growth of at least 6% annually Search for a solution to external debt problems Reduce volatility of capitals

11 Productivity needs Increase social spending - better health services - more and better education - increased productivity Reduce pressure on natural resources Develop internal markets Increase support to MSEs

12 Productivity needs Increase Private Investment More and better paid jobs Promote the creation of industrial clusters Increase exports of high added value products from diversified sources and low environmental impact industries

13 International Commitments Fullfilment of commitments by developed countries in relation to Agenda 21 and the Rio Declaration Kyoto Protocol: stabilization of greenhouse gases to prevent disasters

14 Some environmental that need improvement Solid waste Only 40% are adequately managed Polluted water Treatment and re-use of urban and industrial water Air pollution Transportation Industrial emissions Climate Change

15 Wider use of renewable energy and promotion of energy saving Handling and treatment of toxic materials and waste Sust. management of forests Development and use of cleaner technologies Report Recommendations Some environmental that need improvement

16 Promote the industry’s competitivity but with a rational and sound use of natural resources and the environment Ensure private sector pro-active participation in the design and development of national and international environmental laws and rules Promote technical training and the development and adoption of cleaner technologies Report Recommendations

17 Promote sustainable tourism Develop the internal market in each country Promote the production of high added value products Promote and integrate the MSEs as central elements of a sustainable industrial development Reduce dependency on highly pollutant industries Report Recommendations

18 Develop economic incentives and avail funds for cleaner production Increased access to capital at competitive rates Promote innovation and industrial clusters Fight poverty and social inequity Develop and use a regional model of indicators of sustainable industrial development Report Recommendations

19 Programa de las Naciones Unidas para el Medio Ambiente Programa das Naçoes Unidas o Meio Ambiente Oficina Regional para América Latina y el Caribe Blvd. de los Virreyes 155, Lomas de Virreyes CP México, D.F., MEXICO