LocationsUnder Pressure
Recalibrating the Future of Development in Latin America and the Caribbean
Latin America and the Caribbean is under pressure
The patterns of development progress in LAC over the last decades can be summarized in four simple tenets: significant progress has occurred; that progress has been unequal; it has slowed in recent years; and it is vulnerable to reversals.
After decades of sustained progress, advances in human development across LAC began to slow, particularly from the mid-2010s onwards. The rate of growth on the Human Development Index (HDI) in LAC decreased from a steady 0.7 percent between 1990 (when the indicator was first measured) and 2015, to 0.3 percent in the five-year period before the pandemic, and 0.2 percent since—signalling a stagnation in progress.
The COVID-19 pandemic marked a critical turning point, triggering the first-ever decline in the HDI since its inception. Although the region has since recovered, the pace of advancement remains sluggish, showing little indication of returning to its pre-pandemic trajectory.
HDI progress has been slowing since mid-2010s and has yet to recover its pre-pandemic trajectory
Uncertainty, once considered a disruption, has become the norm
While uncertainty has been on the rise globally, it reached especially acute levels in LAC by early 2025—standing nearly 50 percent above the global average and more than double what the region’s own level had been in 1990.[1]
This divergence became even more pronounced during a significant spike in early 2025; at that time, uncertainty increased globally by 77 percent relative to the previous year, while in LAC it surged dramatically by 101 percent over the same period. Such elevated uncertainty levels underscore the region’s heightened sensitivity to global threats.
Uncertainty in LAC has more than doubled since 1990, surpassing global averages
Uncertainty is not new, but the types of adverse events that the region is now facing are unlike those that came before.
Traditional risks are both more frequent and more intense, and novel threats are emerging due to rapidly evolving technologies, deepening social fragmentation and an increasingly changing climate. Moreover, multiple adverse events and hazards are interacting with each other —and with underlying structural vulnerabilities, such as slow growth and inequality—in complex and, often, unforeseen ways.
These factors have exposed profound vulnerabilities in the region’s development trajectory, challenging its ability to sustain and advance human development. Recognizing this complexity marks a paradigm shift in development thinking —one that demands a transformation in policy approaches to address overlapping and interlinked threats.
[1] The World Uncertainty Index measures global uncertainty by tracking the frequency of uncertainty-related terms in economic news articles and reports. The Index reflects fluctuations in global economic sentiment, indicating periods of heightened uncertainty that can affect investment, consumption and overall economic activity.
We acknowledge the kind support of the Spanish Cooperation.
