Covid-19, Latin America and the Caribbean, New social contract

Fiscal policy in the time of COVID-19: a new social pact for Latin America

By Pablo Ferreri, Public Accountant and former Vice Minister of Economy and Finance of Uruguay

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

We could say that ultimately the role of government remains unchanged overtime: to achieve ever higher levels of development with the understanding that true development means achieving sustained economic growth while generating greater equity and social cohesion. This must be done through more and better exercise of civil rights and in an environmentally sustainable manner. But in achieving this ultimate goal, challenges change according to realities that governments must face.

Challenges that Latin America faced fifteen years ago, when it enjoyed high levels of growth and a commodity boom in an increasingly open world, are quite different to those that have been brought about by economic slowdown, lower international prices and new isolationist tendencies.

Development Matters25 November 2020

Asia, Covid-19, Latin America and the Caribbean

Prospects for Chinese and Mexican South-South co-operation post-COVID-19

By Denghua Zhang, former diplomat and Research Fellow at the Australian National University and Carlos Cortés Zea, Coordinator of the AMEXCID-UNDP Co-operation Programme

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

The COVID-19 crisis is having profound impacts on the international political and economic order. It also provides an opportunity for stakeholders to reflect on past practices in each sector and learn from lessons to improve policies in the future. In this case, we examine the purposes, approaches and capacities of emerging providers (or Southern providers as some may call them) through the lens of China and Mexico—two major players in south-south co-operation (SSC).

Emerging providers, similar to traditional donors, provide aid to serve their own national interest. Motivations underpinning emerging providers’ efforts can vary significantly. The Chinese foreign aid programme is driven by a combination of factors including diplomatic competition with Taiwan, access to natural resources in recipient countries, image building as a responsible global power, and generating geopolitical support when its relationship with developed countries is strained. For example, China is currently taking a whole-of-government approach to conduct its COVID-19 diplomacy; an effort to improve its global image and garner support from developing countries in the face of growing pressure from developed countries over China’s handling of the crisis.

Development Matters8 September 2020

Covid-19, Latin America and the Caribbean, Policy, Social Protection

América Latina y el Caribe en tiempos del COVID-19: no descuidar a los más vulnerables

Por Federico Bonaglia, Director Adjunto, Centro de Desarrollo de la OCDE, y Sebastián Nieto Parra, Jefe de la Unidad de América Latina y el Caribe, Centro de Desarrollo de la OCDE

Este artículo es parte de una serie sobre cómo abordar COVID-19 en los países en desarrollo

Read this blog in English

Las medidas de contención necesarias contra el COVID-19 han generado una crisis económica mundial sin precedentes, combinando choques por el lado de la oferta y de la demanda. Ahora, la pandemia está afectando a América Latina y el Caribe y los países se están preparando para el efecto multiplicador que tendrá en la región. Tan solo unos meses antes, a finales de 2019, muchos países de la región tuvieron una ola de protestas masivas impulsadas por un profundo descontento social, aspiraciones frustradas, vulnerabilidad persistente y creciente pobreza. Esta crisis exacerbará estos problemas.

Más allá de la magnitud del impacto en los sistemas de salud que ya son débiles (unos 125 millones de personas aún carecen de acceso a los servicios básicos de salud), el abrumador impacto socioeconómico de la crisis podría recaer desproporcionadamente en los hogares vulnerables y pobres si no se implementan respuestas ambiciosas de política.

Development Matters21 June 20202 December 20223 Comments

Covid-19, Latin America and the Caribbean, Trade

Trading to avoid falling behind in the COVID-19 crisis: Lessons from Central America to boost prosperity

By Rodrigo Méndez Maddaleno, Economist at Chief Economist Office, Central American Bank for Economic Integration (CABEI)

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Trade-Central-America-shutterstock_1714688524 — Panama City, Panama – container vessel leaving the Panama Canal. Photo: Shutterstock

If what and where you export matters, Central American countries need to upgrade the quality of their exports, produce new ones and dive into new markets.

Central American countries are open to international trade. Trade in the region represents 67% of GDP, more than the world’s average of 51%. Average tariff rates for the region have also shown a consistent decline since 2005 going from 7% to 5%. However, the region’s economic performance has not reflected this, with an average GDP per capita growth of around 2.5% in the 2000s, which means that income doubles approximately every 30 years. So why has there not been an economic take-off? What is missing in the region when it comes to trade and economic policy in general? These questions are even more relevant today, as COVID-19 and the global crisis are affecting the region and its major trading partners.

To address this, it is important to analyse several aspects of Central American trade, such as export composition, main destination markets, and discuss what the region can do to improve its situation and boost economic growth and prosperity. Continue reading “Trading to avoid falling behind in the COVID-19 crisis: Lessons from Central America to boost prosperity”

Development Matters16 June 202016 June 2020

Covid-19, Employment, Human Development, Latin America and the Caribbean, New social contract, Social Protection

COVID-19 in Latin America: Promoting entrepreneurship and reducing social vulnerabilities

By Jorge Arbache, Private Sector Vice-President, Development Bank of Latin America (CAF)

Statistics show that economic growth in Latin America is highly volatile, with periods of acceleration and collapse. This dynamic hides perverse implications. The combination of low growth persistence with high-growth volatility is associated with greater risk aversion, which in turn encourages financial speculation and firms to invest in lower risk, but also lower social return projects. Additionally, poverty and other social indicators are also very sensitive to the harmful combination of short growth spells and high volatility.

Lia Beyeler8 June 202030 October 2023

Covid-19, Latin America and the Caribbean

Is COVID-19 widening educational gaps in Latin America? Three lessons for urgent policy action

By Nathalie Basto-Aguirre, Paula Cerutti and Sebastián Nieto-Parra, OECD Development Centre

This blog is part of a series on tackling COVID-19 in developing countries.

COVID-19, like most crises, is exacerbating inequalities in the region. To contain the pandemic, most Latin American countries have closed their schools, affecting the learning of 154 million students. However, not all students are affected equally. While distance education can contribute to alleviate the immediate impacts of school closures, it requires a number of conditions to deliver meaningful results. Students from poorer socio-economic backgrounds tend to suffer the most and risk bearing lasting consequences in terms of learning outcomes and, ultimately, opportunities. In particular, three interconnected dimensions stand out.

Lia Beyeler4 June 20202 December 20228 Comments

Country systems, Covid-19, Latin America and the Caribbean

Haitian Families and Loss of Remittances During the COVID-19 Pandemic

By Toni Cela, Senior Research Associate of the Migration for Development and Equality (MIDEQ) hub & Co-ordinator of the Interuniversity Institute for Research and Development (INURED), and Louis Herns Marcelin, Co-Director of the MIDEQ project; Professor at the University of Miami; & Chancellor of INURED

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

shutterstock_1125196052 — Port-au-Prince, Haiti. Photo: Rafal Cichawa/Shutterstock

Migration has always featured prominently in Haiti’s history. At times forced, as in the case of sociopolitical repression and the aftermath of disasters, induced to fulfil labour and workforce needs in the Caribbean and in other periods voluntary as in the circulatory movement recorded in the Caribbean, South and North America. Over the past decades, migration in Haiti has evolved from a survival strategy for individual migrants and their families to now buttressing the local economy through the transfer of remittances. This reality was made evident during the 2010 earthquake rebuilding effort when the Haitian diaspora identified itself as Haiti’s “single largest donor” citing “the magnitude of its remittances to the Haitian Republic and how those contributions totalling [USD] $2 billion dollars annually allot[ed] for 30% of the GNP .” In comparison, public revenues, excluding grants, represent 13% of GDP and are projected to fall to 10% in 2020.

Remittance transfers to Haiti have continued to grow over the past decade, the lion’s share of funds originating in countries throughout the Americas, particularly the United States, where the majority of Haitians have settled. Yet, the global economic crisis brought on by the COVID-19 pandemic poses a serious threat to the global remittance economy. For Haiti, reduction in remittances will further weaken an already feeble economy while negatively impacting the livelihood and health of families and communities. Continue reading “Haitian Families and Loss of Remittances During the COVID-19 Pandemic”

Development Matters29 May 202016 June 20201 Comment

Covid-19, Latin America and the Caribbean, New social contract, Social Protection

Social protection and sub-regional integration: fundamental instruments for post-COVID-19 social reconstruction

By Alfredo Suárez Mieses, Secretary-General, Central American Social Integration Secretariat (SISCA), and Gabriela A. Ramírez Menjívar, Head of the Multidimensional Poverty, Human Capital Development and Social Protection Area- SISCA

Photography by Presidency of the Republic of El Salvador — Photo: Presidency of the Republic of El Salvador

The COVID-19 pandemic is causing an unprecedented health, economic and social crisis that threatens to leave a deeply negative mark in the SICA region (Central America and Dominican Republic), particularly on employment, poverty, and inequality levels. The depth of the impacts will depend on multiple factors, including the duration of the pandemic, the public policy responses to contain and control it, a country’s economic structure, the strength of its health and social protection systems, and its level of vulnerability to global dynamics. Social protection is a crucial tool to minimize the costs of the crisis; it is also a crucial investment to make the recovery stronger and more inclusive, thus more sustainable.

Measures taken by most countries to flatten the contagion curve, along with the current international environment, have impacted economic activity with direct effects on income generation and living conditions for a large part of the population. According to the latest report of the Central American Economic Integration Secretariat (SIECA), the region’s Gross Domestic Product will contract by 6.8%. The fall in tourism and decline of economic activity in the United States, the main trading partner and the largest source of foreign direct investment and remittances in Central America, are already having negative effects. The Inter-American Development Bank (IADB) estimates remittances could contract by 10% for each point less of growth in the United States. Continue reading “Social protection and sub-regional integration: fundamental instruments for post-COVID-19 social reconstruction”

Development Matters18 May 202012 November 2020

Development Matters

Discussions on development opportunities and challenges

Category: Latin America and the Caribbean

Prospects for Chinese and Mexican South-South co-operation post-COVID-19

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Trading to avoid falling behind in the COVID-19 crisis: Lessons from Central America to boost prosperity

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Is COVID-19 widening educational gaps in Latin America? Three lessons for urgent policy action

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Haitian Families and Loss of Remittances During the COVID-19 Pandemic

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This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

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