📊 Development Banks, Global Deforestation, and Big Stadiums
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Today's charts:
What exactly is a development bank? A look at CAF 💵
Putting deforestation into a global perspective 🌳
The biggest stadiums in LatAm 🏟️
Make sure you check out the comment of the week at the bottom!
Finance 💵
In February 1968, a group of representatives from five Andean countries – Chile, Colombia, Ecuador, Peru, and Venezuela – met in Bogotá to discuss the founding of a regional solution for financing development needs. The result, the Corporación Andina de Fomento (CAF), was set up to address regional issues at the transnational level.
We’ve written about development finance through institutions such as the Inter-American Development Bank (IDB) before, but the CAF was different from its founding. After all, this was a development bank set up by and for Latin American countries. The amounts may be smaller, but this was an institution designed to be kept within the family, so to speak, which is why the major shareholders currently include the same founding members (with just Bolivia replacing Chile).
Today the CAF – Development Bank of Latin America and the Caribbean has become a nearly 20-member institution, spanning all of Latin America’s largest economies and three Caribbean countries (besides the Dominican Republic). The only two non-regional member countries are the associated members of Spain and Portugal, notable for their linguistic and historical connections with Latin America.
Last year, the CAF approved 305 operations worth a total of $14.1B, representing a 6.9% growth in approved financing for 2021. While this may be less than secured by established institutions such as the IDB, it does reflect a multibillion-dollar effort to ensure funds for the region’s sustainable development, productive infrastructure, and the energy transition.
And the good work continues: this year has seen a number of borrowing countries financing their long-term development strategies with CAF funds. For example, we highlight above the roughly $1.6B in per-capita capital balance held by Panama, Paraguay, Uruguay, Bolivia, and Ecuador. These smaller regional economies represent just shy of half the total credit portfolio balance.
Development finance can be tricky to secure and trickier to get right. But with regional initiatives like the CAF, Latin America can harness the necessary capital to fund its future growth.
Environment 🌳
In early July, the government of Brazilian President Luiz Inácio Lula da Silva had some very good news for the world regarding the Amazon rainforest.
Brazil’s government released satellite data showing a nearly 34% decrease in deforestation during the first six months of Lula’s term. During the previous month in particular, there was a 41% plunge in alerts for possible deforestation compared to June 2022.
This welcome bit of news comes as a reversal of the trend of soaring deforestation seen in the previous few years, which reached a 15-year high under former President Jair Bolsonaro. One report showed a 60% increase in deforestation between 2019 and 2022.
With the newest figures, the continued hope is that 2023 is the year that Brazil reverses the trend and resumes its fight against deforestation in the world’s most biodiverse forest. Lula, who took steps to drastically cut down on deforestation during his first two terms, has notably declared that he wants to end all deforestation in his country by 2030.
“There will be no climate security if the Amazon isn’t protected,” the 77-year old leader declared at last year’s United Nations climate conference in Egypt.
Brazil – and some of its neighbors – may have a unique responsibility in the world as a custodian of the Amazon rainforest. However, the countries of South America are far from alone in this fight. In our chart above, we showcase the hectares lost to deforestation around the world since 2001. Even with progress in certain key countries, deforestation is on the rise globally, demonstrating that there’s much work to be done to ensure sustainable development while protecting natural resources like forestry.
Through protecting certain areas from demolishment, utilizing federal resources, and empowering local indigenous leaders who live within the rainforest, Brazil can continue its great progress and ensure generations to come may enjoy the beauty and vitality of the world’s largest rainforest.
Sports 🏟
FIFA recently announced that 100 years after the first World Cup was held in Uruguay, South America will host 3 of the games for the 2030 World Cup. Some fans didn’t like the decision, because due to rotating rules, it means that South America can’t fully host in 2034. The region had one of the strongest bids with Uruguay–Argentina–Chile–Paraguay. A more distant future South American joint bid, like the Spain-Portugal-Morocco and Canada-Mexico-USA will very likely happen. The region has no shortage of massive stadiums to host.
However, massive stadiums in LatAm are being succeeded by newer, smaller ones — only two of the ten largest stadiums were built in the 21st century.
Why is this the case? A bit of soccer history helps explain this trend.
Soccer started gaining popularity throughout the 20th century. Uruguay's Estadio Centenario — the oldest stadium on our list — hosted the first World Cup in 1930.
As the sport and the World Cup gained global popularity, Latin American teams (just the usual 3) won championships, and, with that, the region gained notoriety and the privilege to host often.
This privilege brought the need for countries, in collaboration with private initiatives, to build infrastructure (aka huge stadiums) around "the beautiful game." A golden era in stadium building came to the region, whose heritage still stands in the form of iconic stadiums such as River Plate's in Argentina, Monumental de Lima in Peru (surprisingly 3rd on our list), and — the largest of them all — Estadio Azteca in Mexico.
As the sport's in-person attendance growth reached a plateau in the latter part of the 20th century, partly thanks to mass video streaming, the need for colossal stadiums ceased.
Newer stadiums have less capacity and are geared towards a pleasant visitor experience. A clear example of this is BBVA Bancomer Stadium in Monterrey, Mexico. Our list's newest stadium offers 324 suites, two restaurants, a commercial area, and parking space for 3.5K cars.
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That’s all for this week 👋
Comment of the week
Our comment of the week is a hot take on twitter: “There is nothing united nor common about LatAm” would you agree? In response to our chart comparing the entire region’s GDP against major economies.
Join the discussion on social media, where we’ll be posting today’s charts throughout the week. Follow us on Twitter, LinkedIn, Instagram, or Facebook.
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