COVID-19 in Latin America and the Caribbean

Through this analysis and a resulting set of eight cross-cutting recommendations, this practical policy primer aims to inform regional governments and others critical to mitigating the health effects of COVID-10 in order to better prepare the region for the next set of pandemic-related challenges.

As the coronavirus pandemic rages on, countries around the world face an unprecedented test: concurrent public health and economic crises coupled with the resulting political and social reverberations. In Central America, the collective test of survival is no different—at least on its surface. But, as a region plagued by weak institutions, migration, violence, and lack of economic opportunities, Central America has to not only meet this unprecedented moment, but leapfrog beyond it.

The year 2019 saw a wave of demonstrations across Latin America, and governments have attempted to respond to citizen demands with varying degrees of vigor and success. In Panama, citizens have taken to the streets in recent years to protest government corruption. Now amid the COVID-19 pandemic, fresh allegations of corruption and institutional inefficiencies are fueling a renewed push towards reforms and greater transparency. In order for Panama to emerge from the pandemic with inclusive and sustainable growth, the country needs a new social contract that combats corruption and provides equal opportunities for everyone. With the election of Joe Biden—who brings a strong commitment to Latin America and the Caribbean—as president-elect of the United States, now is the perfect time for Panama to take concrete steps to improve its image, in order to attract investment from and strengthen economic ties with the United States.

The COVID-19 pandemic is exerting extraordinary pressure on Latin American and Caribbean economies with reverberations that will be felt for years to come. October estimates point to a 8.1 percent contraction of regional GDP this year, accompanied by a 23 percent reduction in exports. Between January and May, Latin American and Caribbean exports to most destination markets saw sharp decreases, including to the United States (-22.2 percent) and the European Union (EU) (-14.3 percent). However, China—the first major economy to recover from the pandemic—appeared to be an exception (-1.2 percent). As Latin America looks to rebuild from the pandemic, the trajectory of its business relationship with China will be a significant factor in shaping regional outcomes. How can Latin American economies increase their competitive position with China?

Supply remains crucial as governments, businesses, and individuals brace for a second wave of shutdowns and prepare to bounce back post-pandemic. A key priority for the next US administration will be working alongside partners and allies in the Western Hemisphere to assure supply-chain resilience is achieved and prioritized. In this Spotlight, seventeen authors from various countries, regions, and industries, representing the public and private sectors, tackle various opportunities in five key questions.

As economies hastily shut down across the globe in early 2020, the World Bank projected a 20 percent drop in remittances to Latin America and the Caribbean this year. As predicted, remittances did take a plunge—initially. El Salvador and Colombia, for example, witnessed a remittances crash of 40 percent and 38.5 percent, respectively, in April 2020 in comparison to April 2019. Peculiarly, as the number of COVID-19 cases continued to soar and the global economy plummeted, some countries observed a rise in their remittance levels. What explains this unexpected increase in remittances, during a time when economic activity is so stalled?