Navigation path

Left navigation

Additional tools

Other available languages: ES

European Commission

MEMO

Brussels, 24 March 2014

EU cooperation with Latin America

Overview

Latin America is currently experiencing a period of economic growth and rising public expenditure and has seen a significant improvement in the job market, the fight against poverty and access to education. Since 2002, 60 million people (out of a total population of 580 million) have been lifted out of poverty, giving the continent an historic opportunity to eradicate poverty - in particular extreme poverty - for good. At the same time, Latin America is the only region in the world where social inclusion has in fact improved over the last decade.

Despite this, there has been less progress in the areas of fairness and social welfare, and Latin America remains the most unequal continent in the world in terms of income distribution. There are still real poverty gaps amongst the different countries. In Nicaragua, for example, the poorest country in Central America, 46% of the population lives on less than $2 a day, while in Costa Rica and Panama the percentage of people living in poverty is 24% and 29%, respectively.

Regional cooperation with Latin America:

The EU has over 18 years of experience of regional cooperation in Latin America and in that time has provided more than €1 billion of investment. Regional cooperation represents a privileged tool to share experience and know-how of Europe as a region with Latin American partners.

Between 2007- 2013 the EU provided €556 million for regional programming in Latin America. This was spent in the areas of social cohesion, water management, private sector development, higher education and information society, amongst others.

At the EUROsociAL conference in Brussels on 24th and 25th March, European Development Commissioner, Andris Piebalgs, talked about new EU support of at least €2.5 billion for Latin America for the years 2014 to 2020, which is part of the Development Cooperation Instrument, now published. This is to be spent on the areas of security, good governance, accountability and social equity, inclusive and sustainable economic growth, environmental sustainability, resilience and climate change, Erasmus+ (an education and training programme for young people in the EU and Latin America, as well as worldwide) and a sub-regional programme for Central America. These areas of cooperation were discussed with partner countries and the exact amount for each of them is yet to be decided.

The priorities for EU-Latin American co-operation were defined in the summits which took place in Rio (1999), Madrid (2002), Guadalajara (2004), Vienna (2006) and Lima (2008).

These priorities are:

  1. The fight against poverty and social inequality;

  2. The consolidation of good governance and the promotion of peace;

  3. Economic co-operation, trade development and support for regional integration.

Bilateral cooperation with countries in Latin America

In line with the Agenda for Change, the EU’s new policy blueprint to refocus its aid by priortising those sectors and countries where the need is greatest, the EU is setting up a new way to work with Latin America. For those countries which are facing the greatest challenges, bilateral cooperation will remain significant. But for those partner countries or regions where bilateral development cooperation is being discontinued, the EU will now be free to engage in a more strategic relationship, in which it seeks solutions on matters of common concern via regional cooperation, thematic programmes and new financial instruments. That’s why the EU’s regional funding will see such a significant increase; (nearly double) on amounts spent 2007 – 2013.

At the same time, bilateral cooperation with countries facing the greatest challenges in Latin America (Bolivia, El Salvador, Guatemala, Honduras, Paraguay and Nicaragua) will remain significant. Moreover, Colombia, Ecuador and Peru will benefit from bilateral funding, which will allow for a very gradual phase out.

From 2007 to 2013, the EU provided €214 million bilateral support for Nicaragua, €121 million for El Salvador and €135 million for Guatemala. Bolivia is the biggest recipient of EU aid in Latin America, receiving €241 million from 2007-2013. The EU provides 50% of all foreign assistance to Bolivia.

The Development Co-operation Instrument

Launched in January 2007, the Development Co-operation Instrument (DCI) replaced a wide range of geographic and thematic instruments which were created over time. In this way, it increases the effectiveness of the EU development cooperation. The DCI supports two areas in Latin America: geographic programmes, thematic programmes (eg food security, investing in people, migration, environment, and natural resources). €16.9 billion was provided to the DCI for the period 2007-2013. The new DCI, for the period 2014-2020, provides a total financial envelope of €19.6 billion, of which €2.5 are exclusively for Latin America.

ALL Latin American countries covered by DCI benefit from thematic and regional programmes. The DCI also covers Asia, the Gulf Region and South Africa.

The EU’s work on Latin America: Regional Projects in Focus:

A) AL-INVEST

Al-Invest is an economic co-operation programme that aims to support the internationalisation of small and medium enterprises (SMEs) in Latin America (enabling them to operate and trade across national boundaries), in collaboration with their European partners, in order to boost social cohesion in the region.

The AL-INVEST programme has assisted 30,000 small and medium enterprises in Latin America in their internationalisation processes between 2009 and 2013. In Central America and Mexico alone, AL-INVEST helped create new business worth more than €77 million.

More than 1,000 activities have been implemented, in more than 25 commercial sectors (the agro-industry, environment and the telecommunications sectors in particular).

B) EURO-SOLAR

EURO-SOLAR is a European Commission programme designed to reduce poverty in Latin America by giving isolated rural communities with no access to electricity a renewable source of electrical energy. Its total budget is €36 million. EURO-SOLAR has been implemented in Latin America’s eight poorest countries (based on the UN Human Development Index): Bolivia, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay and Peru.

EURO-SOLAR provided solar or wind power supply to remote rural communities without electricity access, by installing 600 electrification kits using photovoltaic or hybrid power systems (wind/photovoltaic). The communities also received a wide range of electrical appliances: computers, internet connections, telephones, printer/scanners, battery chargers, projectors, medical refrigeration equipment, water purifiers and lighting.

Thanks to the EURO-SOLAR programme, more than 300,000 people in eight of Latin America's most disadvantaged countries, who previously had no access to electricity, now benefit from among other things, schools with Internet-connected computers; the use of vaccines and medications which can be kept in refrigerators – thus preserving all of the product’s properties until it is administered - and remote training courses in health promotion and disease monitoring, in which local people can participate via the computers provided by the programme.

C) LAIF – Latin America Investment Facility

The LAIF's main purpose is to promote additional investments and key infrastructure in Latin America; focusing on transport, energy, and environment, as well as supporting social and private sector development in Latin American countries.

LAIF operates via financial non-refundable contributions to support loans from the European Investment Bank (EIB) and other European, multilateral and national, development financial institutions to partner countries. It encourages beneficiary governments and public institutions to carry out essential investments, allowing an increase in risk and credit ceilings, which cannot be financed either by the market or by the development finance institutions separately.

The types of operations financed under the LAIF are the following:

  1. Investment co-financing in public infrastructure projects;

  2. Loan guarantee cost financing;

  3. Technical assistance (financed as part of a specific investment operation or as a global envelope made available to eligible financial institutions);

  4. Risk capital operations (financed as part of a specific investment operation or as an envelope made available to eligible financial institutions).

LAIF has had an enthusiastic response from partner countries, Member States and financial institutions. For the period 2009-2013, 25 projects were approved, representing a total investment cost of more than €5 billion and a grant contribution of about € 196 million.

D) ALFA Project KID

Creating quality jobs is one of the biggest challenges in fighting poverty. The KID project invests in the education of professionals who are in the process of re-entering the workforce. It has benefited 8,000 women who were reentering the workforce for personal reasons (maternity, imprisonment, social problems, etc.) and 4,000 workers aged over 40, who were seeking training opportunities to enhance their living conditions.

The KID Project aims to improve access to university education, particularly lifelong learning for socially-excluded people, developing connections and integration between universities and NGOs, public institutions and private sector entities in 14 Latin American countries participating in the consortium.

This project, which received EU support of more than €2 million, is only one example of more than 40 actions supported as part of the ALFA III - Cooperation Programme between the European Union and Latin America on Higher Education.

For more information

Website of the DG Development and Cooperation - EuropeAid:

http://ec.europa.eu/europeaid/index_en.htm


Side Bar