The chief economist of the World Bank for Latin America, Augusto de la Torre, claimed that economies in the region “are not specializing in employment training as they should” and that tax policies should be examined. Continuing the inequality’s reduction of the past decade shall be complicated, particularly considering that further economic slowdown is expected for 2015 and 2016.

“Latin America will be divided within a context of small growth, quite the opposito to context of the last decade’”, when growth required to reduce inequality and include middle-class people was “supported” by global demand, stated De la Torre.

The WB’s economist made his statements during a conference developed in the Wilson Centre of studies, in Washington. Ángel Mellizo, director of the Latin American Department of the Organisation for Economic Cooperation and Development (OECD) joined De la Torre in the conference.

Both experts pointed out the importance of the challenge the region faces, particularly considering that during 2014 Latin America only grew 0,8% and during 2015 is expected to grow only 1,7% according to a WB’s report published this month.

“It is a region that will have fewer resources and will need smarter policies to continue inequality reduction, as the slowdown is expected not only for 2015 but for 2016 as well”, said Mellizo.

He added that, even though inequality has been reduced, “Such reduction has been done from very high levels”.

He insisted on the importance of applying tax policies that increase tax collection within a more progressive context in order to affect low income’s sectors less.

Education is one of the most important areas where more money should be invested, stated De la Torre.

“In Latin America there still is a major correlation between the place you were born and the place where you will economically end”, explained the economist.

From a tax’s perspective, De la Torre focused on the need of countries with energy subsidies to seize the current reduction in oil prices to eliminate such subsidies and use the money to strengthen pension systems and finance educational programs.

Source:www.americaeconomia.com