The Inter-American Development Bank recently revealed a new analysis which shows that the government of Latin America has been spending money inefficiently that it lost the region including the Caribbean a total of $220 billion. This amount could have been enough to eliminate the extreme poverty that is currently their number one problem. Leonardo Gonzalez Dellan, a banker and entrepreneur, believed that the government should have been wiser when it comes to spending the people’s money.
The analysis also showed that because of the inefficient spending, the region’s growth went to a standstill and the government is not able to deliver the best services to the public including health, security and education. There is also no enough investment that go to human capital as well as infrastructure.
In a publication entitled Better Spending for Better Lives, inefficient spending is the reason why around 4.4 per cent of the total gross domestic product of the region went to waste. According to the report, the countries in Latin America and the Caribbean should not have invested their funds just to reach the middle income level rather they should have used it in more efficient ways.
The report’s lead editor, Carola Pessino, said that the region will be able to do so much more when given with only limited resources. She added that in the future it is best for the region to put their investments in things that will give the highest return in terms of social rate. in 2016, the public spending has reached more than $1.9 trillion while the amount of goods and services that were provided reached over $5.3 trillion.
The region’s average spending makes up 29.7 per cent of the total GDP. The figure is 6 per cent higher compared to the figures obtained in the early 2000s. While majority of the regions in the planet has reached over 50 per cent increase in public investment per capita, Latin America and the Caribbean remains at only 5 per cent. This is a sad truth recognized by the investor and banker, Leonardo Gonzalez Dellan. Hopefully the region will have learned how to allocate spending in order to avoid wasting a lot of funding.