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Updated July 10, 2020
Latin America and the Caribbean: Impact of COVID-19
The Coronavirus Disease 2019 (COVID-19) pandemic is
extent, Brazil, Colombia, and Mexico—are being
having widespread economic, social, and political effects
negatively affected by the historic drop in the price of oil
on Latin America and the Caribbean, a region with strong
that began in late February 2020. Caribbean nations that
congressional interest because of deep U.S. linkages .
depend on tourism face deep economic recessions, with
projected annual GDP declines between 5%-10%.
As of July 10, 2020, the region had almost 3.2 million
confirmed cases and over 138,000 deaths, with deaths
The decline in economic growth in 2020 is expected to
surging in several countries. Brazil, Mexico, Peru, Chile,
exacerbate income inequality and poverty throughout the
and Ecuador have the highest numbers of deaths in the
region. Latin America was already the most unequal region
region, and Brazil has the highest number worldwide after
in the world in terms of income inequality, according to the
the United States. The rankings change in terms of per
U.N. Economic Commission for Latin America and the
capita deaths—Chile has the highest recorded deaths per
Caribbean (ECLAC). ECLAC projects that in 2020,
capita, closely followed by Peru, Brazil, Ecuador, and
inequality will rise in all countries, with the worst results in
Mexico (see Table 1). Several regional leaders have
the region’s largest economies—Brazil, Mexico, and
contracted the virus, including the presidents of Honduras
Argentina. According to a July 2020 U.N. report, poverty is
in June and the Brazilian and Bolivian presidents in July. A
expected to increase from 30.3% of the region’s population
recent University of Washington model for COVID-19 in
in 2019 to 37.2% in 2020, an increase of 45 million people
Latin America and the Caribbean forecasts that deaths
(to 230 million people total).
could reach 438,000 by October 1, 2020, with several
countries facing “explosive trajectories.”
Table 1. COVID-19 Deaths and Mortality Rates in
Latin America and the Caribbean (LAC)
Experts are concerned that several countries, such as Brazil,
(countries with more than 500 deaths, as of July 10, 2020)
Haiti, Mexico, Nicaragua, and Venezuela, are significantly
undercounting their death tolls. Many observers have
Regional
expressed special concern for Venezuela, where the health
Deaths per
Rank
Country
Deaths
care system was collapsing prior to the pandemic. Experts
100,000
(deaths per
have criticized the leaders of Brazil, Mexico, and Nicaragua
100,000)
for playing down the virus threat and not taking adequate
actions to stem its spread.
Brazil
69,184
33.03
3
Mexico
33,526
26.57
5
On May 19, 2020, Director of the Pan American Health
Organization (PAHO) Dr. Carissa Etienne maintained that
Peru
11,314
35.37
2
“the virus is surging across our region” and expressed
Chile
6,682
35.68
1
concern about the poor and other vulnerable groups at
greatest risk. Dr. Etienne conveyed particular concern for
Ecuador
4,900
28.68
4
cities, towns, and remote communities in the Amazon
Colombia
4,791
9.65
8
Basin, including indigenous communities, as well as
women (who make up 70% of the health workforce), people
Argentina
1,720
3.87
12
of African descent, migrants in temporary settlements, and
Bolivia
1,638
14.43
7
prisoners in crowded jails with poor sanitation. On June 9,
PAHO issued guidance on measures to reduce COVID-19
Dom. Rep.
842
7.92
9
transmission among indigenous populations, Afro-
Guatemala
1,092
6.33
11
descendants, and other ethnic groups.
Panama
839
20.09
6
Economic Impact
Before the pandemic, the International Monetary Fund
Honduras
704
7.34
10
(IMF) projected 1.6% economic growth for the region in
Total LAC
138,001
—
—
2020 but forecast a recession several countries. On June 24,
2020, the IMF revised its regional forecast to a contraction
United States
133,290
40.74
—
of 9.4%, with almost every country in recession. Economic
Source: Johns Hopkins University School of Medicine, Coronavirus
recovery may be a protracted process in countries that rely
Resource Center, “Mortality Analyses,” accessed July 10, 2020, 3:00
heavily on global trade and investment, which the pandemic
a.m. EDT, updated daily at https://coronavirus.jhu.edu/data/mortality.
is significantly affecting. Oil-producing countries in the
region, especially Venezuela and Ecuador—and, to a lesser
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Latin America and the Caribbean: Impact of COVID-19
Another economic challenge for the region is that incoming
poverty; and inadequate public services, social safety net
remittances from abroad (the majority from the United
programs, and advancement opportunities.
States) are expected to drop significantly as a result of
COVID-19. For several countries—El Salvador,
The COVID-19 pandemic could exacerbate some of these
Guatemala, Haiti, Honduras, Jamaica, and Nicaragua—
factors, contribute to further deterioration in political
remittances play a significant role in their economies. The
conditions, and stoke social unrest similar to that in 2019.
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 July 2, 2020, the Administration said it was providing
including $3.2 billion in additional funding for 2020 and
almost $120 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 $84 million in humanitarian
The World Bank, as of July 8, 2020, reported that it is
assistance, almost $28 million in health assistance, and
providing about $2 billion to 17 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 July 2, 2020, approved $50.9 billion in
the Trump Administration has increased economic
lending to 20 countries in the region contending with the
sanctions on both countries during the pandemic.
pandemic’s economic impact, including Chile, $23.9
billion; Peru, $11 billion; and Colombia, $10.8 billion.
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,
Mark P. Sullivan, Specialist in Latin American Affairs
politicized judicial systems, corruption, and high levels of
June S. Beittel, Analyst in Latin American Affairs
crime and violence. Economic factors include stagnant or
Peter J. Meyer, Specialist in Latin American Affairs
declining growth rates; high levels of inequality and
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
Maureen Taft-Morales, Specialist in Latin American
Clare Ribando Seelke, Specialist in Latin American
Affairs
Affairs
IF11581
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