Risks and scenarios for Latin America between Covid and recession


Livio Zanotti’s point on Latin America

Of the nearly 460,000 coronavirus deaths officially accounted for by John Hopkins and registered by the World Health Organization (WHO) on our planet, over half are on the American continent, from one pole to another. One hundred thousand in Latin America: Brazil, Mexico, Chile, Peru and Bolivia the most affected countries in the order. They are the ones whose governments have chosen to favor the economy, avoiding rigorous national quarantines that would inevitably have curbed production. But that ended up compromising the health and life of citizens without saving their pockets. Mourning is compounded by strong recessions in their GDP. The results, not at all conclusive, appear disastrous.

The entire subcontinent had 6/7 years of very low growth, the lowest since 1950. All the economies of the region live above all on their ability to export raw materials: agricultural, mining and energy. Already worn out by the fall of international trade due to the customs war between the United States and China, the pandemic hit them in a very weak economic situation, between stagnation and recession. Cepal and the World Bank predict that their GDP will fall from 6.4 / 6.8% in Mexico and 6.5 / 6.8% in Brazil to 3.8 / 4.1% in Bolivia for this year. . By cutting the purchasing capacity of 92.2% of the population in Brazil, in particular the poorest groups, which make up 16.4 of the 212 million Brazilians.

Mexico (96.6%), Chile (96.4%), Peru (93.7%), Bolivia (85.6%) follow proportionally similar estimates, which leave only the respective ones free from when not even benefited from the previous conditions. , very small elites (between 4 and 7% of the populations). With growing debt problems, consequent difficulties in financing the budget deficits, almost impossible new significant investments and prospects for progressive recovery only starting from 2022. The case of Peru is emblematic, over 32 million inhabitants, which after years of severe turbulence the political-institutional and economic framework was beginning to stabilize. But he finds himself dealing with an informal two-thirds economy, undeclared work, jobs without rights, the state’s social aids that are insufficient (220 USD in 3 months for the most needed).

In such a scenario, it should not be surprising if, although far from running out of the danger of geometric sum contagions brought by the coronavirus, many countries will open the already loose quarantines (in some cases never really seriously applied). In the vast majority of cases, data on precarious work indicate the number of people who, if they do not go out to find any occasional job, nobody at home eats (literally). Governments are therefore subjected to the double pressure of entrepreneurs who do not want to stop their businesses and the less skilled workforce forced to work to survive and almost fear the starvation of Covid-19. Only countries with strong though well-worn middle classes (Argentina and Uruguay, among the very few examples), can at least partially escape from it.


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