Hector Cobo
Regional Vice President Mexico
SAS
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Expert Contributor

How Tech Can Help Solve Central America’s Key Problems

By Héctor Cobo | Wed, 11/24/2021 - 09:23

The governments of Central American countries have devoted a great deal of energy and resources to solving the problems that have afflicted them for decades. Poverty, corruption, unemployment, low tax collection, insecurity, migration, and economic instability, and now coronavirus, have dominated their agenda.

According to reports from the INCAE Business School, corruption in Central America (CA) generates annual losses close to US$13 billion. Meanwhile, the Central American Institute for Fiscal Studies (Icefi) forecasts that around US$3.85 billion of tax collection was lost during 2020 due to COVID-19.

International organizations such as the UN and the Economic Commission for Latin America and the Caribbean (ECLAC), as well as countries such as the US and Mexico, have collaborated closely with the Central American governments to help them solve their problems, as well as provide them with humanitarian and economic assistance.

Central America has a priority spot in many regional and global initiatives that seek to improve national security and promote economic development. Hence the importance of ensuring that aid sent to Honduras, El Salvador and Guatemala, which make up the Northern Triangle, for example, reaches the population that needs it and that it is managed in a transparent manner.

Although it is a coordinated effort between different entities, the governments of the region are the ones in charge of executing effective anti-corruption policies, as well as those aimed at solving other equally urgent problems.

Sharing Information, Key for Collaboration

In this context, technology becomes their critical ally to implement such policies and solve the problems and conflicts. In fact, a fundamental asset for governments to face the challenge of having data distributed in different silos, such as databases and applications, is analytical technology, which allows concentrating and processing huge volumes of data (big data), after an appropriate management that eliminates those silos and thus, share information between governmental organizations for a view and collaboration between citizens, service areas and decision-makers.

In particular, data management and advanced analytics are tools that offer enormous potential to help achieve transparency in resource management, combat corruption problems and fraud prevention.

Identifying networks of relationships and fraudulent activities, identity theft, waste or abuse of resources, as well as inhibiting the illegal accumulation of public positions are some of the problems that analytical technology helps to solve, to later consolidate administration, monitoring and critical decision-making.

Combined, data management and advanced analytics lay the foundation for modernization, while providing a clear and comprehensive picture of what is happening across all levels of government. The benefits can be as broad as the areas in which they are applied.

An example of the identification of irregularities (fraud) in public positions was the state of Ceara, in Brazil. According to the country's legislation, a public servant cannot work in more than one government office. The State Audit Court discovered violations of the law that cost the treasury more than US$152 million a year.

Another example: in the federal capital of Brazil, the detection of fraud through analytics revealed that US$1.2 million was related to cases of suppliers involved in illegal and risky activities and associated with possible conflicts of interest.

Strategic areas

Although there are many areas where Central American governments can effectively apply analytical and data management solutions, among the most strategic are:

  • Public sector finance. They guarantee the proper administration of tax collection and payment management, as well as understanding the economic impact of different political alternatives. They help in the detection of fraud and abuse to provide a real view of the operations of government agencies.
  • Public safety and justice. They increase the precision of investigations and allow better decisions to be taken to protect citizens. As for law enforcement, they provide a structured environment for gathering, managing and analyzing intelligence data.
  • Social services. They ensure better results by offering the benefits to the people who require them in a timely manner; improve resource management by detecting and mitigating improper payments, and improving operational efficiency and service delivery.
  • Health. They allow understanding the impact of health policies. Thus, responsible agencies make more informed and innovative decisions to improve results and ensure quality of services and control costs.
  • Education. It is possible to understand the potential and the trajectory of students and identify if they’re about to drop out. They also allow data to be translated into insights so that educators better understand the needs, challenges, and opportunities of their students, and ensure the transparency of funding for public schools.

Analytics and data management will accelerate the transition from paper-based to electronic government. In fact, the faster they do it, the sooner they get the benefits of modernization and digital transformation.

They will help regional governments to close the gap with other countries. The Central American countries should look toward a better future supported by carefully designed initiatives and policies, and take advantage of technology that is agnostic with respect to any political ideology.

At the same time, they’re able to make better decisions regarding environment protection, healthcare, crime and security and job creation, and better distribute the support other countries and organizations provide in order to increase the life quality of their citizens.

Photo by:   Hector Cobo