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Canning House Research Forum

The Future of Latin America and the Caribbean

We aim to generate timely insights that will help policy-makers to generate a new economic model capable of fostering socioeconomic development and maintaining political stability.

Dr Amir Lebdioui

The Canning House Research Forum, emerging from our partnership with Canning House, is a five-year rolling programme of research and policy engagement led by our Canning House Research Fellow Dr Amir Lebdioui

Until 2022, Dr Lebdioui has produced one report titled "Inequality and Trade Diversification: How can Income Inequality in Latin America be Reduced beyond Commodity Booms?". In his report, Dr Amir Lebdioui, discusses the limits of what can be achieved in terms of inequality reduction without measures to diversify away from commodity dependence.

You can read the full report here

The Forum consists of a series of three individual, policy-focused research projects aiming to advance knowledge and offer insights of practical application to political, economic, social, and business policy-making. It will produce various outputs and host numerous events on the theme of The Future of Latin America and the Caribbean. 

1. Inequality, export diversification, and taxation in Latin America

After a decade of falling inequality in Latin America, recent years have seen disparities widen once more, leading to waves of protest across the region. In light of this, a growing number of scholars, politicians, civil society groups, and everyday citizens are calling for a new economic model that can reduce and reverse rampant income inequality.

This project aims to examine the paths towards a sustainable and just model of development in Latin America by investigating the complex relationships between income inequality, export diversification, and taxation.

Brazil_view from Papagaio slum in Belo Horizonte_stk_747x420_photo by Fred CardosoThe informal settlement of Papagaio in Belo Horizonte, Brazil (Fred Cardoso/Shutterstock)
 

By demonstrating the embeddedness of income inequality in the broader context of export concentration and by highlighting the role of taxation in both phenomena, this research sheds light on the need for a comprehensive, multidimensional approach to tackling inequality in the long term.

We aim to generate timely insights that will help policy-makers to generate a new economic model capable of fostering socioeconomic development and maintaining political stability. 

 2. Trade, extractives, and energy in the context of climate change

Commodity dependence and the vulnerability to climate change in Latin America

Latin American countries tend to rely on the exports of agro-based commodities and/or fossil fuels, which increases the vulnerability of their productive structures to climate change. Latin America is in fact the most agro-dependent region in the world in terms of exports.

chile_Chuquicamata Copper Mine_CC by SA_747x420_Diego Delso
Photo: Chuquicamata copper mine in Chile (Diego DelsoCC BY SA)
 

Agro-dependent economies are expected to experience productivity drops as a result of temperature and precipitation fluctuations, while fossil fuel-dependent countries are increasingly exposed to the risks of stranded assets in the context of a low carbon future.

This study will further assess the vulnerability of Latin American economies to climate change and justify the need for a process of economic diversification into new sectors and activities as swiftly as possible.

Opportunities for diversification may stem from the region’s endowment in so-called "minerals of the future". Latin America holds over half of the world reserves of lithium, for instance, which is a key component of green technologies.

This research project will investigate opportunities for and barriers to value addition in the region's lithium sector, as well as evaluating the possibility of cooperation amongst the "lithium triangle" countries (Argentina, Bolivia, Chile) and beyond.

Latin America’s integration in renewable energy value chains

A second element of the research will analyse the integration of Latin American countries within global value chains in the renewable energy sector:

• What opportunities exist for upgrading in the value chain by manufacturing goods and equipment that can feed into renewable energy technologies? 

• How can the countries of the region maximise the socioeconomic benefits that arise from energy transition?

• What kind of partnerships will be needed within and beyond the region?

This research is particularly important and timely given that Latin America is becoming a leading region in renewable energy deployment, with over 25 per cent of primary energy coming from renewables (twice the global average). 

3. A Green New Deal for Latin America?

In light of the region’s rampant inequality, there is a need for an alternative development model that can lead to the creation of decent jobs. Severe vulnerability to climate change as a result of dependence on agricultural and fossil-fuel exports also means that a Green New Deal could represent an opportunity for stimulating long-term and sustainable development in Latin America.

chile_solar panels atacama_stk_747x420Photo: Solar panels in Atacama, Chile (Abriendomundo/Shutterstock)
 

This research project poses several questions:

• Is a Green New Deal the way forward in Latin America?

• Is it feasible? What are the major political and economic barriers to implementing this kind of programme?

• What would the implications be for trade and investment between Latin America and the UK?