Covid-19 crisis has disrupted the main engines of global growth, and the second wave of the pandemic has hit Europe and the US hard. Though case numbers started to decline in Latin America in late September, it remains one of the world’s worst-affected regions. More than 10 million people have been infected, and almost 370,000 have died, reversing years of gains in living standards and leaving millions struggling to survive. The numbers reveal how dire the impact of the health crisis has been on the region’s economies. Gross domestic product (GDP) growth is expected to finally contract by 8% in Latin America in 2020, causing massive job losses and putting more than 28 million people at risk of poverty. Recent announcements of effective vaccines that will be rolled out in the next six to 12 months, it appears that the virus that has damaged the world in unimaginable ways might soon be vanquished. Now it is necessary to start planning for the post-Covid world.
Economic growth was mostly propelled by globalization, and international co-operation holds the key to putting the global economy back on track. The recovery from this economic shock offers an opportunity to reduce income inequality and broaden access to quality healthcare, clean water, better sanitation and quality education. Lack of infrastructure has long constrained Latin America’s development. There is a list of requirements for bringing the region into the 21st century: better highways, railroads, ports and other modes of transportation; more efficient energy production and distribution; better and more inclusive educational opportunities; wider access to clean water and functioning sanitation utilities; and broader and faster internet connectivity. The region’s annual investment in infrastructure totals US$ 34bn. To bring that up to the level of economies in the developed world, investment should be at least seven times greater, around US$ 220bn annually. Such funds would enable Latin America and the Caribbean to build highways, ports and airports to promote trade both within the region and internationally, making it more globally competitive. The large multinational construction companies that can help build these facilities are in Asia, Europe and North America, and they should be encouraged to work closely with Latin American partners. These partnerships could boost growth and the expansion of Latin America’s working and middle classes, which could become attractive markets for companies around the world that produce consumer goods. In this way, investments would create a virtuous cycle whereby consumer demand propels economies in Latin America to new heights.