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XIV Meeting of CAF-SEGIB Economists. "Economic Impacts of Covid-19 in Ibero America: Towards the Recovery of Growth"

Madrid
Spain
13 May 2020

The XIV Meeting of CAF-SEGIB Economists coincided with the beginning of one of the worst health and socioeconomic crises that Latin America has faced in the last 100 years. As I write these lines, for every
two new coronavirus deaths in the world, one is Latin American although we represent only 9% of the world population. The COVID-19 pandemic is a planetary crisis par excellence. There is no country in the world that has not been affected. For the moment, the International Monetary Fund forecasts a drop of -4.9% worldwide, a figure that rises to 9.4% for Latin America, the most affected region of all in socioeconomic terms. Of the 100 million people that the World Bank estimates will fall into poverty this year globally, 46 million are Latin Americans: that is, almost half. It is often claimed that this virus does not discriminate, but that is only partially true; the reality is that it has clear differentiated effects on countries and people. In the face of the coronavirus, in short, the countries of the world have the capacity to get sick, but not the same capacity to cure themselves. And to be cured not only in the strict sense, to be cured of the disease, but also to be cured of the immense impact that COVID will have on our economic and social systems. The quarantines that began in the region in the early months of the pandemic were intended to save lives and slow the contagion curve to prevent health systems from collapsing. But in addition to the above objectives, quarantines and social distancing measures also implicitly had the function to give time to science, so that we could improve our knowledge about the ways of transmission and treatment of COVID-19 and that our health experience would allow us to improve the care and management of those infected. As the health catastrophe expanded into an economic and social one, it became clear that any solution to the crisis had to simultaneously address these three dimensions, and that therefore giving time to science was to give time not only to doctors, epidemiologists, researchers and pharmacists, but also to us economists and social scientists. All this from the understanding that the coronavirus has unleashed a "perfect storm", which is extremely complex and interdisciplinary. This XIV Meeting of Economists, convened in an extraordinary way and held for the first time through digital channels, was an opportunity to take advantage of these spaces for dialogue, debate and analysis of the effects, policies and differentiated measures that the coronavirus crisis unleashes and demands in our region. The numbers, to begin with, are and have been overwhelming. The Monetary Fund (as of June) expects a drop of -9.4% in the region's GDP. This translates into more inequality: according to ECLAC, this year we will have 45 million more poor people, and 26 million more in extreme poverty. As we know, extreme poverty in Latin America translates directly into hunger. Indeed, according to FAO data, almost 20 million Latin Americans will enter into caloric deficit this year because of the increase in poverty, bringing the total number of food insecurity in the region to 67 million people. On the other hand, in the labor market, the ILO says that Latin America was the region that lost the most jobs in the world in this first semester: since the beginning of the pandemic we have lost 56 million jobs in the region. ECLAC, for its part, estimates that up to 3 million formal businesses could disappear, the vast majority of which are micro-businesses. Therefore, the IDB estimates that 15% of all formal jobs will be lost and informality will rise from the current 54% to 62%. This, then, was the background that started our discussion. An unknown terrain in which it was necessary to outline an enriched diagnosis of this crisis from the different perspectives of Latin American economic thought.

Prologue by Rebeca Grynspan, Secretaria General Iberoamericana (originally in Spanish)

Author(s): 
SAINZ QUESADA Manuel
Theme: 
Economic Relations