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June 19, 2020
Latin America and the Caribbean: Impact of COVID-19
The Coronavirus Disease 2019 (COVID-19) pandemic is
The decline in economic growth in 2020 is expected to
having widespread economic, social, and political effects
exacerbate income inequality and poverty throughout the
on Latin America and the Caribbean, a region with strong
region. Latin America already was the most unequal region
congressional interest because of deep U.S. linkages .
in the world in terms of income inequality, according to the
U.N. Economic Commission for Latin America and the
As of June 18, 2020, the region has 1.8 million confirmed
Caribbean (ECLAC). ECLAC projects that in 2020
cases and over 86,000 deaths, with some countries
inequality will rise in all countries, with the worst results in
experiencing a surge in deaths. Brazil, Mexico, Peru,
some of the region’s largest economies—Brazil, Mexico,
Ecuador, and Chile have the highest numbers of deaths in
and Argentina. The level of poverty is expected to increase
the region, and Brazil now has the highest number of deaths
from 30.3% of the region’s population in 2019 to 34.3% in
worldwide after the United States. The rankings change in
2020 (almost 215 million people), with almost 29 million
terms of per capita deaths—Ecuador has the highest number
people moving into poverty during the year.
of recorded deaths per capita, followed by Peru, Brazil,
Chile, and Mexico (see Table 1).
Table 1. COVID-19 Deaths and Mortality Rates in
Latin America and the Caribbean
There are concerns that several countries, such as Brazil,
(top 10 countries with most deaths, as of June 18, 2020)
Haiti, Mexico, Nicaragua, and Venezuela, are significantly
undercounting their death tolls. Many observers have
Regional
expressed particular concern for Venezuela, where the
Deaths per
Rank
country’s health care system was collapsing prior to the
Country
Deaths
100,000
(deaths per
pandemic. Experts have criticized the presidents of Brazil,
100,000)
Mexico, and Nicaragua for playing down the virus threat
and not taking adequate actions to stem its spread.
Brazil
46,510
22.20
3
Mexico
19,080
15.12
5
On May 19, 2020, Director of the Pan American Health
Organization (PAHO) Dr. Carissa Etienne maintained that
Peru
7,257
22.69
2
“the virus is surging across our region” and expressed
Ecuador
4,007
23.45
1
concern about the poor and other vulnerable groups at
greatest risk. Dr. Etienne conveyed particular concern for
Chile
3,615
19.30
4
cities, towns, and remote communities in the Amazon
Colombia
1,887
3.80
9
Basin, including indigenous communities, as well as
women (who make up 70% of the health workforce), people
Argentina
913
2.05
14
of African descent, migrants in temporary settlements, and
Bolivia
679
5.98
7
prisoners in crowded jails with poor sanitation. On June 9,
PAHO issued guidance on measures to reduce COVID-19
Dom. Rep.
633
5.96
8
transmission among indigenous populations, Afro-
descendants, and other ethnic groups.
Panama
470
11.25
6
United States
117,717
35.98
—
Economic Impact
Before the pandemic, the International Monetary Fund
Source: Johns Hopkins University School of Medicine, Coronavirus
Resource Center, “Mortality Analyses,” accessed June 18, 2020, 3:00
(IMF) projected 1.6% economic growth for the region in
AM EDT, updated daily at https://coronavirus.jhu.edu/data/mortality.
2020, with recession forecast for s everal countries. In April,
Notes: Countries ranking 10th through 13th in terms of deaths per
the IMF revised its regional forecast to a contraction of
5.2%, with almost every country in recession. Economic
100,000 were Honduras (3.50), Antigua and Barbuda (3.12),
recovery may be a protracted process in countries that rely
Guatemala (2.50), and Barbados (2.44).
heavily on global trade and investment, which are being
Another economic challenge for the Latin American and
significantly affected by the pandemic. Oil-producing
countries in the region, especially Venezuela, Ecuador—
Caribbean region is that incoming remittances from abroad
(the lion’s share from the United States) are expected to
and to a lesser extent, Brazil, Colombia, and Mexico—are
drop significantly as a result of COVID-19. For several
being negatively affected by the historic drop in the price of
countries in the Caribbean and Central America—El
oil that began in late February 2020. Caribbean nations that
depend on tourism are facing deep economic recessions,
Salvador, Guatemala, Haiti, Honduras, Jamaica, and
Nicaragua—remittances play a significant role in their
with projected annual GDP declines between 5%-10%.
economies. The high rate of informality in the labor market
of many Latin American countries (reportedly about half of
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
workers in Latin America work in the informal economy) is
President Bukele of exploiting the health crisis to pursue his
also a challenge. As the World Bank notes, many workers
aggressive anti-gang policies. In Bolivia, the interim
are self-employed and many are paid under the table, living
government postponed presidential elections in May 2020
paycheck to paycheck without a safety net. Such
and only recently agreed to hold the elections by early
characteristics make it more difficult, amid the pandemic’s
September. More broadly, human rights organizations,
economic shutdown, to design programs that reach and
including the U.N. Office of the High Commissioner for
provide adequate assistance to these workers.
Human Rights, have expressed concern that overcrowded
and unhygienic prison conditions throughout Latin America
Although a number of countries in the region have
could fuel the spread of COVID-19.
implemented stimulus programs to help protect their
economies and vulnerable populations, many countries may
U.S. Policy Considerations
struggle to obtain the financing necessary to respond to the
Foreign Aid and Support for PAHO. In light of the
severe economic downturn. In response, the international
pandemic and its economic and social effects, policymakers
financial institutions are increasing lending to countries
may consider the appropriate level of U.S. foreign
throughout the region. Examples are as follows:
assistance for the region and for PAHO. The
Administration’s FY2021 budget request—released prior to
The Inter-American Development Bank (IDB)
the pandemic—included $1.4 billion for the region, about
announced in March 2020 that it was providing lending
an 18% decline from that appropriated in FY2019. The
support to countries in four priority areas: the immediate
request included almost $133 million in Global Health
public health response; safety nets for vulnerable
Programs assistance for the region, almost 41% les s than
populations; economic productivity and employment;
appropriated in FY2019. In addition, the Administration
and fiscal policies for the amelioration of economic
requested $16.3 million for PAHO, almost a 75% cut from
impacts. The IDB is making available up to $12 billion,
that appropriated in FY2019. In March 2020, Congress
including $3.2 billion in additional funding for 2020 and
passed two supplemental appropriations measures—P.L.
the remainder in reprogrammed existing health projects.
116-123 and P.L. 116-136—that provided nearly $1.8
billion in U.S. foreign assistance to prepare for and respond
The World Bank, as of June 1, 2020, reported that it is
to COVID-19 globally. As of late May 2020, the
providing about $2 billion to 15 Latin American and
Administration said it was providing $112 million in new
Caribbean countries. The assistance focuses on
and previously announced assistance to help countries in
minimizing the loss of life, strengthening health systems
the region respond to the pandemic.
and disease surveillance, mitigating the pandemic’s
economic impact and addressing supply chain issues and
Sanctions. Some U.N. officials, human rights
delivery. Over the next 15 months, countries in the
organizations, and Members of Congress have called for
region may also benefit from a portion of the $160
U.S. economic sanctions on Venezuela and Cuba to be
billion in worldwide assistance the bank is providing.
waived during the pandemic. The Treasury Department
released a factsheet in April 2020 maintaining that U.S.
The IMF, as of June 11, 2020, approved almost $5.2
sanctions programs generally allow for legitimate
billion in emergency loans to 17 countries in the region
humanitarian-related trade and assistance. At the same time,
facing the economic impact of the pandemic.
the Trump Administration has increased economic
sanctions on both countries during the pandemic.
Political Impact
Even before the pandemic, the public perception of the
Deportations. Several countries in the region, including El
quality of democracy in several Latin America and
Salvador, Guatemala, Haiti, Jamaica, and Mexico, report
Caribbean countries had been eroding. The 2018/2019
that some migrants removed from the United States were
AmericasBarometer public opinion survey showed the
infected with COVID-19. As a result, Guatemala suspended
lowest level of satisfaction with democracy since the poll
U.S. deportation flights on several occasions. Some human
began in 2004. Several broad political and economic factors
rights groups, migrant advocates, and Members of Congress
have driven the decline in satisfaction with democracy and
have called for the suspension of deportations to the region
help to explain the eruption of social protests throughout
amid the pandemic. According to press reports, U.S.
the region in 2019. Political factors include an increase in
Immigration and Customs Enforcement tests only a
authoritarian practices, weak democratic institutions,
sampling of those being removed, and the rapid test being
politicized judicial systems, corruption, and high levels of
used may return false negative results.
crime and violence. Economic factors include stagnant or
declining growth rates, high levels of inequality and
Also see CRS Report R46319, Novel Coronavirus 2019
poverty, and the inadequacy of public services, social safety
(COVID-19): Q&A on Global Implications and Responses.
net programs, and advancement opportunities.
Mark P. Sullivan, Specialist in Latin American Affairs
The COVID-19 pandemic could exacerbate some of these
June S. Beittel, Analyst in Latin American Affairs
factors, contribute to further deterioration in political
Peter J. Meyer, Specialist in Latin American Affairs
conditions, and stoke social unrest similar to that in 2019.
Clare Ribando Seelke, Specialist in Latin American
Human rights groups and other observers have expressed
concern about leaders taking advantage of the pandemic to
Affairs
advance their own agendas. In El Salvador, critics accuse
Maureen Taft-Morales, Specialist in Latin American
Affairs
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Latin America and the Caribbean: Impact of COVID-19
IF11581
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