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Updated June 26, 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 was already 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 26, 2020, the region had almost 2.3 million
Caribbean (ECLAC). ECLAC projects that in 2020,
confirmed cases and over 105,000 deaths, with some
inequality will rise in all countries, with the worst results in
countries experiencing a surge in deaths. Brazil, Mexico,
the region’s largest economies—Brazil, Mexico, and
Peru, Chile, and Ecuador have the highest numbers of
Argentina. The level of poverty is expected to increase from
deaths in the region, and Brazil now has the highest number
30.3% of the region’s population in 2019 to 34.3% in 2020
of deaths worldwide after the United States. The rankings
(almost 215 million people), with almost 29 million people
change in terms of per capita deaths—Peru has the highest
moving into poverty during the year.
number of recorded deaths per capita, closely followed by
Brazil, Chile, and Ecuador (see Table 1).
Table 1. COVID-19 Deaths and Mortality Rates in
Latin America and the Caribbean (LAC)
Experts and observers are concerned that several countries,
(countries with more than 500 deaths, as of June 26, 2020)
such as Brazil, Haiti, Mexico, Nicaragua, and Venezuela,
are significantly undercounting their death tolls. Many
Regional
observers have expressed particular concern for Venezuela,
Deaths per
Rank
Country
Deaths
where the country’s health care system was collapsing prior
100,000
(deaths per
to the pandemic. Experts have criticized the presidents of
100,000)
Brazil, Mexico, and Nicaragua for playing down the virus
threat and not taking adequate actions to stem its spread.
Brazil
54,971
26.24
2
Mexico
25,060
19.86
5
On May 19, 2020, Director of the Pan American Health
Organization (PAHO) Dr. Carissa Etienne maintained that
Peru
8,761
27.39
1
“the virus is surging across our region” and expressed
Chile
4,903
26.18
3
concern about the poor and other vulnerable groups at
greatest risk. Dr. Etienne conveyed particular concern for
Ecuador
4,343
25.42
4
cities, towns, and remote communities in the Amazon
Colombia
2,611
5.26
9
Basin, including indigenous communities, as well as
women (who make up 70% of the health workforce), people
Argentina
1,150
2.58
13
of African descent, migrants in temporary settlements, and
Bolivia
913
8.04
7
prisoners in crowded jails with poor sanitation. On June 9,
PAHO issued guidance on measures to reduce COVID-19
Dom. Rep.
698
6.57
8
transmission among indigenous populations, Afro-
descendants, and other ethnic groups.
Guatemala
623
3.61
11
Panama
564
13.50
6
Economic Impact
Before the pandemic, the International Monetary Fund
Total LAC
105,555
(IMF) projected 1.6% economic growth for the region in
United States
124,410
38.03
—
2020 but forecast a recession several countries. On June 24,
2020, the IMF revised its regional forecast to a contraction
Source: Johns Hopkins University School of Medicine, Coronavirus
of 9.4%, with almost every country in recession. Economic
Resource Center, “Mortality Analyses,” accessed June 26, 2020, 3:00
recovery may be a protracted process in countries that rely
a.m. EDT, updated daily at https://coronavirus.jhu.edu/data/mortality.
heavily on global trade and investment, which the pandemic
Notes: Other countries with comparatively high death rates in the
region include Honduras, ranked 10th (4.44 deaths per 100,000), and
is significantly affecting. Oil-producing countries in the
region, especially Venezuela and Ecuador—and, to a lesser
Antigua and Barbuda, ranked 12th (3.12 deaths per 100,000).
extent, Brazil, Colombia, and Mexico—are being
negatively affected by the historic drop in the price of oil
Another economic challenge for the region is that incoming
that began in late February 2020. Caribbean nations that
remittances from abroad (the majority from the United
depend on tourism face deep economic recessions, with
States) are expected to drop significantly as a result of
projected annual GDP declines between 5%-10%.
COVID-19. For several countries—El Salvador,
Guatemala, Haiti, Honduras, Jamaica, and Nicaragua—
remittances play a significant role in their economies. The
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
high rate of informality in the labor market of many Latin
Human rights groups and other observers have expressed
American countries (reportedly about half of workers in
concern about leaders taking advantage of the pandemic to
Latin America work in the informal economy) is also a
advance their own agendas. In El Salvador, critics accuse
challenge. As the World Bank notes, many workers are
President Bukele of exploiting the health crisis to pursue his
self-employed and many are paid under the table, living
aggressive anti-gang policies. In Bolivia, the interim
paycheck to paycheck without a safety net. Such
government postponed presidential elections in May 2020;
characteristics make it more difficult, amid the pandemic’s
it recently agreed to hold elections in early September.
economic shutdown, to design programs that reach and
provide adequate assistance to these workers.
U.S. Policy Considerations
Foreign Aid and Support for PAHO. In light of the
Although a number of countries in the region have
pandemic and its economic and social effects, policymakers
implemented stimulus programs to help protect their
may consider the appropriate level of U.S. foreign
economies and vulnerable populations, many countries may
assistance for the region and for PAHO. The
struggle to obtain the financing necessary to respond to the
Administration’s FY2021 budget request—released prior to
severe economic downturn. In response, the international
the pandemic—included $1.4 billion for the region, about
financial institutions are increasing lending to countries
an 18% decline from that appropriated in FY2019. The
throughout the region. Examples include
request included almost $133 million in Global Health
Programs assistance for the region, almost 41% les s than
The Inter-American Development Bank (IDB)
appropriated in FY2019. In addition, the Administration
announced in March 2020 that it was providing lending
requested $16.3 million for PAHO, almost a 75% cut from
support to countries in four priority areas: the immediate
that appropriated in FY2019. In March 2020, Congress
public health response, safety nets for vulnerable
passed two supplemental appropriations measures—P.L.
populations, economic productivity and employment,
116-123 and P.L. 116-136—that provided nearly $1.8
and fiscal policies for the amelioration of economic
billion in foreign aid to respond to COVID-19 globally. As
impacts. The IDB is making available up to $12 billion,
of June 18, 2020, the Administration said it was providing
including $3.2 billion in additional funding for 2020 and
almost $113 million in new and previously announced
the remainder in reprogrammed existing health projects.
assistance to help countries in the region respond to the
pandemic; this figure includes $77 million in humanitarian
The World Bank, as of June 22, 2020, reported that it is
assistance, almost $28 million in health assistance, and
providing about $2 billion to 16 Latin American and
almost $8 million in Economic Support Funds.
Caribbean countries. The assistance focuses on
minimizing the loss of life, strengthening health systems
Sanctions. Some U.N. officials, human rights
and disease surveillance, mitigating the pandemic’s
organizations, and Members of Congress have called for
economic impact, and addressing supply-chain issues
U.S. economic sanctions on Venezuela and Cuba to be
and delivery. Over the next 15 months, countries in the
waived during the pandemic. The Treasury Department
region also may benefit from a portion of the $160
released a fact sheet in April 2020 maintaining that U.S.
billion in worldwide assistance the bank is providing.
sanctions programs generally allow for legitimate
humanitarian-related trade and assistance. At the same time,
The IMF, as of June 14, 2020, approved $40.1 billion in
the Trump Administration has increased economic
emergency lending to 19 countries in the region facing
sanctions on both countries during the pandemic.
the economic impact of the pandemic, including almost
$24 billion for Chile and $11 billion for Peru.
Deportations. Several countries in the region, including El
Salvador, Guatemala, Haiti, Jamaica, and Mexico, report
Political Impact
that some migrants removed from the United States were
Even before the pandemic, the public perception of the
infected with COVID-19. As a result, Guatemala suspended
quality of democracy in several Latin America and
U.S. deportation flights on several occasions. Some human
Caribbean countries had been eroding. The 2018-2019
rights groups, migrant advocates, and Members of Congress
AmericasBarometer public opinion survey showed the
have called for the suspension of deportations to the region
lowest level of satisfaction with democracy since the poll
amid the pandemic. According to press reports, U.S.
began in 2004. Several broad political and economic factors
Immigration and Customs Enforcement tests only a
have driven the decline in satisfaction with democracy and
sampling of those being removed and the rapid test being
help to explain the eruption of social protests throughout
used may return false negative results.
the region in 2019. Political factors include an increase in
authoritarian practices, weak democratic institutions,
Also see CRS Report R46319, Novel Coronavirus 2019
politicized judicial systems, corruption, and high levels of
(COVID-19): Q&A on Global Implications and Responses.
crime and violence. Economic factors include stagnant or
declining growth rates; high levels of inequality and
Mark P. Sullivan, Specialist in Latin American Affairs
poverty; and inadequate public services, social safety net
June S. Beittel, Analyst in Latin American Affairs
programs, and advancement opportunities.
Peter J. Meyer, Specialist in Latin American Affairs
Clare Ribando Seelke, Specialist in Latin American
The COVID-19 pandemic could exacerbate some of these
factors, contribute to further deterioration in political
Affairs
conditions, and stoke social unrest similar to that in 2019.
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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