COVID-19 Policy in Latin America - Economic fallout calls for local, regional and global responses
COVID-19 Policy in Latin America - Economic fallout calls for local, regional and global responses
SUMMARY
Policy responses to COVID-19 in Latin America will be challenged by long-standing economic obstacles. Responses from local governments have varied greatly, and a comprehensive and tailored response from the global community has yet to materialize. As the member-states of the MERCOSUR alliance start to show willingness to cooperate, and the IMF urges immediate support from other regions that have passed their COVID-19 peaks, the economic landscape in Latin America needs to be carefully considered.
KEY HIGHLIGHTS
SUMMARY
Policy responses to COVID-19 in Latin America will be challenged by long-standing economic obstacles. Responses from local governments have varied greatly, and a comprehensive and tailored response from the global community has yet to materialize. As the member-states of the MERCOSUR alliance start to show willingness to cooperate, and the IMF urges immediate support from other regions that have passed their COVID-19 peaks, the economic landscape in Latin America needs to be carefully considered.
KEY HIGHLIGHTS
- When the International Monetary Fund (IMF) published its sobering World Economic Outlook for the post-pandemic economy in April, it forecast a contraction of -4.2% in Latin America’s regional economy. The region’s dependence on commodity markets make the countries highly-susceptible to price fluctuations, which have been one of the single most acute consequences of lockdown’s impact on demand. Some economies in the region are powered by informal work, making the workforce particularly vulnerable; many of these economies are highly financialized, meaning massive levels of debt; and healthcare system, whilst mostly quite strong, are not sufficiently resilient for a pandemic.
- A few leaders in the region have refused to accept the severity of the pandemic and its implications for their economies, resulting in delayed responses. In most other countries the response has been more appropriate, but cooperation has not been a leading strategy, with most leaders lookers inwards. Cooperation between countries, and between the private and public sectors, will need to be notched up.
- The OECD has declared that global support for Latin America is essential in order to soften the social impact of the coming economic fallout. As well as the impact within the region, the knock-on effects for the entire global economy also need to be considered. These effects may be what really galvanizes the global community to act in support of Latin America, especially those countries which have active interests in the region’s sustainable economic development.
- Learn how Latin America has been affected by COVID-19
- Examine some of the major challenges facing the regions
- Examine which countries are most affected
- Learn what economic and political models are being deployed
- Why is the situation so critical in Latin America?
- What are local leaders policies to come out of the crisis?
- Which countries are most heavily affected?
1. OVERVIEW
1.1. Catalyst
1.2. Summary
2. COVID-19 FINDS LATIN AMERICAN ECONOMIES ON THE BACK FOOT
2.1. Economic fallout could be particularly bad for the region
2.2. The economic makeup of the region will disadvantage it
2.2.1. Countries are dependent on volatile sectors
2.2.2. Workers are vulnerable due to informal economies
2.2.3. The economy is highly financialized and dependent on loans
2.2.4. Healthcare systems are strong, but are not sufficiently resilient
2.2.5. Indigenous populations are at even greater risk
3. POLICY RESPONSES VARY, COOPERATION HAS YET TO YIELD RESULTS
3.1. The denial of populist leaders is still causing damage
3.2. Most other leaders have been swifter to implement policies
3.3. Separate coalitions have had limited impact
3.4. Cooperation with the private sector is also vital
4. THE GLOBAL COMMUNITY NEEDS TO OFFER SUPPORT
4.1. Latin America is vital to global industries
4.2. The region’s geopolitical importance has also become considerable
4.3. The international response is gathering momentum, but needs stepping up
5. APPENDIX
5.1. Abbreviations and acronyms
5.2. Sources
5.3. Further reading
6. ASK THE ANALYST
7. ABOUT MARKETLINE
1.1. Catalyst
1.2. Summary
2. COVID-19 FINDS LATIN AMERICAN ECONOMIES ON THE BACK FOOT
2.1. Economic fallout could be particularly bad for the region
2.2. The economic makeup of the region will disadvantage it
2.2.1. Countries are dependent on volatile sectors
2.2.2. Workers are vulnerable due to informal economies
2.2.3. The economy is highly financialized and dependent on loans
2.2.4. Healthcare systems are strong, but are not sufficiently resilient
2.2.5. Indigenous populations are at even greater risk
3. POLICY RESPONSES VARY, COOPERATION HAS YET TO YIELD RESULTS
3.1. The denial of populist leaders is still causing damage
3.2. Most other leaders have been swifter to implement policies
3.3. Separate coalitions have had limited impact
3.4. Cooperation with the private sector is also vital
4. THE GLOBAL COMMUNITY NEEDS TO OFFER SUPPORT
4.1. Latin America is vital to global industries
4.2. The region’s geopolitical importance has also become considerable
4.3. The international response is gathering momentum, but needs stepping up
5. APPENDIX
5.1. Abbreviations and acronyms
5.2. Sources
5.3. Further reading
6. ASK THE ANALYST
7. ABOUT MARKETLINE
LIST OF FIGURES
Figure 1: Fluctuations in commodity prices (% change, 17/01/20-07/02/2020) and dependencies of Latin American countries
Figure 2: Household debt, loans and debt securities in selected countries (% of GDP, 2000-18)
Figure 3: Approval ratings Latin American leaders, April (Vizcarra) or March (all others) versus pre-pandemic
Figure 1: Fluctuations in commodity prices (% change, 17/01/20-07/02/2020) and dependencies of Latin American countries
Figure 2: Household debt, loans and debt securities in selected countries (% of GDP, 2000-18)
Figure 3: Approval ratings Latin American leaders, April (Vizcarra) or March (all others) versus pre-pandemic
