José Juan Ruiz’s intervention focused, as a Latin American specialist, on the economic consequences of the COVID-19 pandemic in this region, arguing that “all the effects of the pandemic, both health, economic, political, and social, are exacerbated” in Latin America.

The pandemic has had devastating health consequences in Latin America. The region accounts for 9% of the world’s population but concentrates 20% of daily infections, with a very high fatality rate. This is due to the same problems that, for decades, have hindered development and social cohesion in the region, with a significant economic component. The low investment in healthcare and primary care as a percentage of GDP, income inequality, limited access to basic resources and infrastructure, and the dominance of the informal economy have prevented the region from achieving the expected effect of formal social distancing measures imposed across the region – except in Brazil. This has led to the failure of the Latin American “test and trace” strategy.

The economic consequences of the pandemic are also magnified in the region. Latin America has been growing at half the rate of Asian emerging economies since the 1980s. While during this period Latin American GDP has tripled, the average GDP growth in Asia is nearly double.

In this context, as the speaker explains, the major economic impacts of the pandemic in Latin America can be explained by its external dependence on economic factors, compared to internal factors. While 75% of the region’s GDP depends on international trade, commodities, remittances, and tourism—sectors whose activity has been drastically reduced in the first months of the pandemic—only 25% of income depends on measures carried out by governments, specifically lockdown measures that are very strict in the region, with the resulting impact on economic activity, and the ability of states to supplement income and businesses through transfers. Latin America’s economy is not prepared for this.

The result is that Latin America is experiencing its most severe economic crisis since the Great Depression of 1929, with significant repercussions for the political stability of the region. The economic crisis poses a risk to the large population groups who managed to escape poverty in the previous decade but did not manage to consolidate as middle classes. Specifically, José Juan Ruiz specifies that about 20 million people fall into this category. This leads one to think that, if the pandemic containment policies implemented by most political leaders fail, Latin America could fall, after decades of neoliberalism, into what the speaker calls “neopoverty.” This increase in poverty and extreme poverty will result in social instability and, in the speaker’s words, “the state, with little capacity and thinking short-term, will try to sustain most of the population without many resources or respect for institutions and rules, generating populist or neopopulist movements, as is happening in Brazil,” which José Juan Ruiz considers very dangerous for the region at a time of intense electoral activity.

In line with the previous points, and to conclude his speech, José Juan Ruiz emphasized the importance of the U.S. elections for Latin America and the rest of the world. He believes that if the United States fails to stop the decline of its institutions and prevent illiberal trends from consolidating in society, it could lay the groundwork for other political actors with no regard for institutions and the rule of law to attempt and succeed in accessing power. This would establish the foundations for a period of toxic leaderships offering simple solutions to complex problems like those caused by the pandemic, which would only complicate the already complex world order that lies ahead.

Sofía Alfayate
Communication Assistant, INCIPE