OPINION – Zero Hour: Our Region in the Face of the Pandemic

Op-ed by Alicia Bárcena, ECLAC Executive Secretary

(Economic Commission on Latin America and the Caribbean) It is true that history recounts the devastating impact of past pandemics, but none of them broke out in such a populated world (with more than 7.7 billion people) or such an interconnected one, and with a planet that is ailing environmentally. This is the biggest human and health crisis we have ever faced. That assertion must serve as our guiding principle if we are to approach it effectively. It has, of course, profound economic implications, but the center of attention, the focus of public policy decisions, must be on safeguarding one of the most valuable global public goods in existence: people’s health and well-being.

With this in mind, it is fitting to mention that Latin America and the Caribbean will be impacted via five main external channels: the decline of economic activity in our principal trading partners, especially China; the fall in prices for our commodities; the interruption of global and regional value chains; the steep drop in demand for tourism services, which primarily affects the Caribbean; and an increase in risk aversion and the worsening of global financial conditions and capital outflows from the region, with the consequent devaluation of our currencies.

The onslaught of COVID-19 came at a bad time. Worldwide, 2019 marked the worst performance in the last decade (2.5% growth in GDP). In the case of Latin America and the Caribbean, this performance was even more dramatic. To find worse growth levels than what the region recorded in the last seven years, one must look back as far as seven decades.

Just a few months ago, and after ending 2019 with poor regional growth of just 0.1%, ECLAC estimated that 2020 would witness a modest rebound and the growth rate would reach 1.3% of GDP. Today, a conservative estimate – based on data that is still in the process of stabilizing – tells us that Latin America and the Caribbean will record negative growth of -1.8% this year, with a probable downward bias.

Read more at: ECLAC

Source: CARICOM TODAY