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Can Latin America Regain its Footing? Three Plausible Scenarios for the Mid-Decade…
In the five years leading up to the emergence of COVID-19, Latin America and the Caribbean experienced its most anemic quinquennium economic performance since World War II, as highlighted by José Antonio Ocampo, a board member of Colombia’s central bank. Earlier progress in addressing inequality stalled, poverty increased, investment in R&D remained low, and manufacturing declined as a share of GDP. Political crises wracked countries around the region, most visibly in Venezuela, where a catastrophic failure of governance, civil unrest, and economic melt-down spurred millions of refugees to flee the country.
And then the pandemic hit, bringing even more suffering to the region as it became a global epicenter for COVID-19, which has already killed more than one million people. According to the International Labor Organization, Latin America and the Caribbean lost 26 million jobs as a result of the pandemic, and began 2021 with new waves of contagion and slow vaccination processes that make the prospects for recovery in labor markets uncertain. The UN estimates that the crisis has driven 45 million people in the region into poverty, and caused the economy to shrink 7.7% last year.
The World Bank assesses that the crisis will have a long-lasting impact on the economies of Latin…
