BEYOND THE THREE-FOLD CRISIS: ¿CONTINUITY OR CHANGE?
History tells us that Albert Einstein once said “If you want different results, you have to try different approaches.” The essential message behind this statement is that we must innovate. The question that comes to mind if we apply this to the ongoing three-fold crisis –economic, health and environmental—, with a view to finding some answers at the ALIDE General Assembly, is: Should we continue to do things as we have in the past, or should we move toward a change, if our intention is to reach different results from the outlook of human development? The World Bank has said that both the health emergency and the global economic crisis produced by the COVID-19 pandemic have affected people worldwide, altering their means of survival, with the result that 2020 saw an increase of between 119 and 124 million in the number of poor. That same year, global growth contraction amounted to 4.3% and per capita GDP shrank 3.5%, with the figure for Latin America and the Caribbean standing at -6.9%. This virtually wiped out between three and four years of advances in poverty reduction efforts.
The year 2020 has been unique, in that while it has left us a legacy of negative effects, it has also produced changes in the way we go about our production activities and social relationships. On the one hand, trends have taken shape that, once this stage has passed, may become lasting features of society, such as teleworking, production process digitalization, intensive use of digital payment systems, online demand for products and services, automation and the use of artificial intelligence, and digital banking; education and all associated activities and functions –in other words, digitalization and automation of multiple processes, with the accompanying changes involved in terms of employment and human relations. That is why it is important to ask ourselves: What is the existing status of digitalization processes in the countries? How will that process be advanced and what are we doing to move ahead with the digitalization? How much progress have development banks made in this terrain and how are they providing support to enterprises in their digitalization efforts? How is digitalization changing the economy and altering the relations of financial and non-financial organizations with their customers?
As concern grows over the science, technology and innovation needed for recovery, sustainable development and in critical sectors like health, for example, an opportunity is also opening up to strengthen and expand the development banking programs. In that way, support can be provided for creating innovation and research ecosystems, particularly in the area of health; revaluing certain sectors like agriculture as a supplier of foodstuffs, and reshaping strategic sectors in order to ensure the continuity of basic production activities. In this line of action, what are the financial institutions going to do? How are States going to help enterprises in this regard? Can significant support for innovation and technological development be expected in Latin America? What will the micro, small and medium business sector do? Have sectors with a large innovative potential and a capacity for incorporating technological advances been identified? Will the health sector be given priority in research and technological development policy measures?
In the third place, we have the alternative of linking our efforts to sustainable development. “There is unmistakable evidence that long-term climate-friendly policies can be highly effective and contribute to rapid recovery, create jobs and lead to greater investment and innovation.” For that reason, development banks committed to environmental finance and whose aim is to support energy efficiency, renewable energy, sustainable infrastructure, agriculture and sustainable tourism, ecosystem conservation, bioeconomy, and urban development, are now confronting the opportunity to provide backing for sustainable recovery. Given the progress of development banks over the past few years, we need to ask ourselves: To what extent have development financing institutions strengthened their environmental finance programs? What new sectors or projects are they now supporting? How actively engaged are they in raising capital market funds to finance projects of this kind? How do they expect to put environmental finance to work in boosting economic recovery?
 Conversation between Nicolas Stern --author of the famous 2006 Stern Review on the Economics of Climate Change -- and Luis Alberto Moreno, the then President of the IDB. (May 2020)