Tag: Latin America

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)

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.

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.

Continue reading “COVID-19 in Latin America: Promoting entrepreneurship and reducing social vulnerabilities”
Lia Beyeler
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.

Continue reading “Is COVID-19 widening educational gaps in Latin America? Three lessons for urgent policy action”
Lia Beyeler8 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 Matters1 Comment
Covid-19, Latin America and the Caribbean, New social contract

What can Latin America learn from historic debt crises to face the COVID-19 crisis today?

By Juan Flores Zendejas, Associate Professor at the Paul Bairoch Institute of Economic History, University of Geneva

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.

Bogota-Colombia-bike-1200X800
Photo: Shutterstock

Today, as in the past, public debate can resort to history in the quest for policy lessons. The COVID-19 crisis is prompting governmental action to meet the needs of large swathes of society and achieve rapid economic recovery. This is adding further pressure on public finances. However, while major stimulus packages are to be implemented in several rich countries, most developing and emerging economies do not have the fiscal capacity to provide similar amounts of financial support. Continue reading “What can Latin America learn from historic debt crises to face the COVID-19 crisis today?”

Development Matters1 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

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.

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

Mitigating the impact of COVID-19 in Latin America: time to be bold

By Nora Lustig, Professor of Latin American Economics, Department of Economics, Tulane University and Jorge Mariscal, Adjunct Professor of International and Public Affairs, School of International and Public Affairs (SIPA), Columbia University

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_1716099655
Empty streets of Guatemala City during lockdown, March 2020. Photo: Shutterstock

COVID-19 has hit Latin America hard on two fronts. The pandemic and the lockdowns to contain the spread of the virus have shut down significant portions of the region’s economies. However, even if the pandemic were to miraculously disappear from the region, falling demand for exports and tourism, declining commodity prices, interruptions in the supply chain of inputs, shrinking remittances and unprecedented capital outflows are significantly affecting countries’ growth prospects.

The International Monetary Fund (IMF) in its recent World Economic Outlook (April 2020), predicts that the world economy could fall by 3% in 2020 and in Latin America by 5.2% – higher than that observed during the 2008-09 global financial crisis. Still, the IMF’s growth forecasts for Latin America compared to those for advanced countries seem overly optimistic and will likely be subject to downward revisions. Based on data for 48 countries, the OECD has estimated that each month of containment measures translates to an approximate decline in annual GDP growth of up to 2 percentage points. Considering the extent to which the region’s economies depend on trade, foreign direct investment (FDI), commodities, tourism and remittances, in the absence of strong policy responses, we would add an additional decline equivalent to one-third of the total shock. Latin American economies could thus face GDP contractions of 9-10%. Continue reading “Mitigating the impact of COVID-19 in Latin America: time to be bold”

Development Matters1 Comment
Covid-19, Employment, Latin America and the Caribbean, New social contract

COVID-19 and labour markets in Latin America: How to repair the damage?

By José Manuel Salazar Xirinachs, Former Regional Director of the International Labour Organisation (ILO) for Latin America and the Caribbean, and former Minister of Foreign Trade of Costa Rica

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.

Covid-19-peru-shutterstock_1697064760
Lima, Peru – April 7, 2020. Photo: Shutterstock

The damage of the COVID-19 pandemic and the ensuing global lockdown crisis will be devastating, causing the worst disruption to labour markets in Latin America since the Great Depression. Up to 43 million people – probably more – could be unemployed in 2020. Tragically, the state of labour markets in the region was bad even before the crisis. Repairing the damage while addressing past structural legacies is possible, but it will be slow and challenging, and will require something most countries in the region have not done well in the past: a massive focus on microeconomic policies for accelerated productive transformation, and technological and human talent development.

The damage has only just begun and is still evolving, but already looks severe. The Economic Commission for Latin America and the Caribbean (ECLAC) estimates a contraction for the region of -5.3%, the IMF of -5.2%, and the World Bank of -4.6%. All projections now point to severe recessions in all countries in the region. Continue reading “COVID-19 and labour markets in Latin America: How to repair the damage?”

Development Matters1 Comment
Building resilience, Covid-19, Latin America and the Caribbean

Responding to COVID-19 in emerging economies: lessons from the financial sector

By Mauricio Rosillo, Corporate Vice president, Grupo Bancolombia

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.

COVID-19 is plunging the world economy in the most severe crisis of recent times and threatens hard-won gains in terms of poverty reduction, food security and economic empowerment. What can the private sector, and in particular the financial sector, do to protect and advance sustainable development and well-being for all?

Governments, companies and citizens must quickly adapt to shoulder this unprecedented situation. This is particularly the case in emerging and developing economies where socio-economic vulnerabilities are higher and state capacity is sometimes low. Consequently, support from other socio-economic actors, notably large firms, is even more necessary.

The immediate priority is to protect people’s health and income. This crisis, together with public health measures such as social distancing and restrictions to mobility, is changing daily routines for workers and firms and reducing their ability to generate income. Latin American economies are not immune to these effects. The high levels of informality and vulnerable Micro, Small & Medium Enterprises (MSMEs) make the policy responses more complex. Coordination and coherence across different actors is fundamental to halt the pandemic, minimise the negative socio-economic consequences and put the economy on a strong and sustainable development path.

Continue reading “Responding to COVID-19 in emerging economies: lessons from the financial sector”
Development Matters
Covid-19, Latin America and the Caribbean, New social contract

Latin America and the Caribbean in the time of COVID-19: Preventing the vulnerable from falling behind

By Federico Bonaglia, Deputy Director, OECD Development Centre, and Sebastian Nieto Parra, Head of Latin America and the Caribbean Unit, OECD Development Centre

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

Leer en español

The necessary containment measures against COVID-19 have engendered an unprecedented global economic crisis, combining supply and demand side shocks. Now, the pandemic is affecting Latin America and the Caribbean (LAC) and countries are bracing for the ripple effects. Just months ago, many countries in the region experienced a wave of mass protests driven by deep social discontent, frustrated aspirations, persistent vulnerability and growing poverty. The crisis will exacerbate these problems.

Beyond the magnitude of the impacts on already weak health systems – some 125 million people still lack access to basic health services – the overwhelming socioeconomic impact of the crisis could disproportionately fall on vulnerable and poor households if ambitious policy responses are not put in place.

Continue reading “Latin America and the Caribbean in the time of COVID-19: Preventing the vulnerable from falling behind”
Development Matters13 Comments
Development in Transition, Latin America and the Caribbean, New social contract, Reviving multilateralism

Social discontent in Latin America through the lens of development traps

BannerWeb1122_DiT_EN_with logo DEV.jpg

By Sebastián Nieto-Parra, Mario Pezzini and Juan Vázquez, OECD Development Centre

This blog is part of an ongoing series evaluating various facets of Development in Transition

Until recently, rising levels of citizen dissatisfaction with public services and institutions in Latin America might have merely been pictured as an upward line in a graph. However, it seems to have reached a breaking point. Growing social discontent has boiled over into protests across several Latin American countries over the past weeks. While these protests are complex and multifaceted, understanding the underlying causes is essential to defining policy priorities that may help address the structural sources of discontent.

GDP growth is not alone in driving social unrest, as protests have not necessarily taken place in countries with the lowest growth rates or at times of lower economic dynamism, like the 2008 crisis.  Furthermore, income gradually ‘delinks’ from well-being outcomes, as countries move up the income ladder. This has clearly been the case for most Latin American countries since the 2000s (OECD et al., 2019a). Continue reading “Social discontent in Latin America through the lens of development traps”

Development Matters4 Comments