The Development Bank of Latin America will finance sustainable tourism projects to support states in their economic and green transition
Tourism is one of the most important sectors of the Latin American economies. In 2019, it represented 26% of total GDP in the Caribbean and 10% in Latin America, with similar percentages of employment in the region. The magnitude of this data explains the depth of the impact of the pandemic, which created the worst crisis in the history of international tourism and caused the loss of more than $900,000 million in these countries. In this context, the Development Bank of Latin America CAF has established a new office in the Dominican Republic to promote the development of “living and regenerative” tourism in the area that, in addition to avoiding negative environmental impacts, contributes to “restoration and enhancement of the natural and cultural heritage, effectively and equitably increasing its contribution to the well-being of people”.
-What are the projects that CAF develops in tourism development?
-As a development bank, we have different views on regional integration. Work for sustainability, for the environment, for more investments in Latin America, capitalization of investments, etc. And in that context, we have revised our strategy with a new management that we started last year. In September we proposed two main themes, one is the Green Bank of Latin America and the Caribbean and the other the Bank of Reactivation. The two things are linked to many sub-topics such as infrastructure, energy, water and sanitation, etc., but tourism is the one that somehow unites the two issues. The green, the sustainable, but also everything that has to do with the economic recovery of the region. Due to the pandemic, some countries in the world completely paralyzed their economies, especially those closely linked to tourism, with a huge negative impact on job losses.
-How has the pandemic affected the Latin American economy?
-The Caribbean suffered much more than Latin America, impacting about 75% of tourism activity, while in Latin America it was about 50%. There were people who even had to leave, who later had to emigrate because they lost their jobs, despite the fact that we now know that tourism problems in some places are returning to pre-pandemic periods. In Colombia, Honduras or El Salvador they are already returning to pre-pandemic numbers, but not all of Latin America yet and the current geopolitical problems are not helping to solve the problem either, in addition to the outbreaks of the pandemic in some regions . Our goal is therefore to finance projects from a sustainability and regeneration point of view, with a more positive vision that not only cares for the environment, but also acts in places where regenerative tourism is possible.
-Those who lost their jobs in Latin America had protection mechanisms similar to the ERTE in Spain?
-In all countries they had different mechanisms to alleviate these problems in one way or another. In some countries it was tax cuts, in others subsidies to companies so they could continue to pay employees’ salaries, cards to restart tourism… Each country’s response was different, we didn’t have an entity like the European Union , but different integration mechanisms such as Mercosur or the Pacific Alliance. But we could say that each state had similar characteristics to subsidize the maintenance of these jobs, although the resources were not infinite and other public expenditures had to be made, such as the establishment of new hospitals, the purchase of vaccines…
-And how will these projects promote the economic part through tourism?
-What we are doing is promoting a tourism agenda that has not been worked on. We came to Fitur and took advantage of the framework of the fair, the most important in the world, to meet the tourism ministers of the different countries. We want to know what the real needs are and what is needed in each of the countries. The ‘feedback’ we get is very good, closely related to the themes of sustainability, creative economy, circular economy… How to take advantage of the different positive circles that exist within each of the countries to improve the quality of the Projects. One of the good things about the pandemic is that it has made us aware of many risks. There is still a long way to go as we face a complex environmental situation worldwide. Although Latin America is not the largest emitter, we suffer a lot from the consequences on a global level. There are countries that have huge reserves of gas that could go a long way toward moving towards much cleaner energy. But people cannot cut off all energy overnight, there must be a just transition, especially for the countries in the region, which are suffering a lot.
-Do you support sustainable tourism companies?
-In this first phase we will look for the ‘feedback’ of the ministers. We have ideas about where we want to work. I think energy has to do with biodiversity and care for the environment, monitoring natural disasters to prevent all these problems as well. Everything related to natural and cultural heritage. That is one of the issues that is also very important for the topic of tourism.
-And what more or less temporary goal do you have to perform any action?
-We will start to carry out actions from this year, because we had a very good reception from the various ministers. What we need to see now is how we bring all these ideas to Earth. In this first phase, we listen, but we also start to think concretely about projects related to biodiversity, care for nature, care for the sea…
-And will you offer financing?
-Yes, we are a bank that annually finances about $15,000 million in projects in the region. Our goal is that over the next five years, 40% of our approvals will be green content, which equates to approximately $25,000 million over the next four years. We have the capacity that if a government asks us for funding for a project that fits the needs of the country and can help achieve these two big goals, we will move forward.
-Do you have a project in Spain or Europe?
-Spain and Portugal are members of CAF, which is a bank that has 21 countries, 19 from Latin America and the Caribbean and these two from Europe. Now we are working on a specific project with Spain to accompany it during the Presidency of the Council of the European Union during the second semester in different projects, such as accompanying the Summit of Heads of State that will take place in Brussels in July or the Ecofin Summit in September in Santiago de Compostela with the Economy Ministers of the Twenty-seven and the 33 of Latin America and the Caribbean, a meeting that has not been held since 2015.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
