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Updated August 14, 2020
Latin America and the Caribbean: Impact of COVID-19
The Coronavirus Disease 2019 (COVID-19) pandemic is
Caribbean nations that depend on tourism face deep
having widespread economic, social, and political effects
economic recessions, with projected annual GDP declines
on Latin America and the Caribbean, a region with strong
between 5%-10%.
congressional interest because of deep U.S. linkages .
The decline in economic growth in 2020 is expected to
As of August 14, 2020, the region had almost 5.9 million
exacerbate income inequality and poverty throughout the
confirmed cases (28% of cases worldwide) and almost
region. Latin America was already the most unequal region
231,000 deaths (almost 31% of deaths worldwide), with the
in the world in terms of income inequality, according to the
virus continuing to spread at high levels in several
U.N. Economic Commission for Latin America and the
countries. Brazil, Mexico, Peru, Colombia, and Chile have
Caribbean (ECLAC). ECLAC projects that in 2020,
the highest numbers of deaths in the region, and Brazil and
inequality will rise in all countries, with the worst results in
Mexico have highest death tolls worldwide after the United
the region’s largest economies—Brazil, Mexico, and
States. The rankings change in terms of per capita deaths—
Argentina. According to a July 2020 U.N. report, poverty is
Peru has the highest recorded deaths per capita in the
expected to increase from 30.3% of the region’s population
region, followed by Chile, Brazil, Mexico, and Panama (see
in 2019 to 37.2% in 2020, an increase of 45 million people
Table 1). A June 2020 University of Washington model for
(to 230 million people total).
COVID-19 in Latin America and the Caribbean forecasts
that deaths could reach 438,000 by October 1, 2020.
Table 1. COVID-19 Deaths and Mortality Rates in
Latin America and the Caribbean (LAC)
Many observers have expressed special concern for
(countries with more than 500 deaths, as of August 14, 2020)
Venezuela, where the health care system was collapsing
prior to the pandemic. Experts have criticized the leaders of
Regional
Brazil, Mexico, and Nicaragua for playing down the virus
Deaths per
Rank
Country
Deaths
threat and not taking adequate actions to stem its spread.
100,000
(deaths per
100,000)
The Director of the Pan American Health Organization
(PAHO), Dr. Carissa Etienne, maintained on May 19 that
Brazil
105,463
50.35
3
“the virus is surging across our region” and expressed
Mexico
55,293
43.82
4
concern about the poor and other vulnerable groups at
greatest risk. Dr. Etienne conveyed particular concern for
Peru
21,713
67.88
1
cities, towns, and remote communities in the Amazon
Colombia
14,145
28.49
8
Basin, including indigenous communities, as well as
women (who make up 70% of the health workforce), people
Chile
10,299
54.99
2
of African descent, migrants in temporary settlements, and
Ecuador
6,010
35.18
6
prisoners in crowded jails. In June 2020, PAHO issued
guidance on measures to reduce COVID-19 transmission
Argentina
5,362
12.05
12
among indigenous populations, Afro-descendants, and other
Bolivia
3,884
34.21
7
ethnic groups, and in July, PAHO issued an alert urging
countries to intensify effort to prevent further spread of the
Guatemala
2,296
13.31
10
virus among indigenous communities in the Americas.
Panama
1,722
41.23
5
Economic Impact
Honduras
1,542
16.08
9
Before the pandemic, the International Monetary Fund
(IMF) projected 1.6% economic growth for the region in
Dom. Rep.
1,393
13.11
11
2020 but forecast a recession for several countries. On June
El Salvador
584
9.10
13
24, 2020, the IMF revised its regional forecast to a
contraction of 9.4%, with almost every country in
Total LAC
230,911
—
—
recession. Economic recovery may be a protracted process
United States
167,110
51.08
—
in countries that rely heavily on global trade and
investment, which the pandemic is significantly affecting.
Source: Johns Hopkins University School of Medicine, Coronavirus
Oil-producing countries in the region, especially Venezuela
Resource Center, “Mortality Analyses,” August 14, 2020, 3:00 a.m.
and Ecuador—and, to a lesser extent, Brazil, Colombia, and
EDT, updated daily at https://coronavirus.jhu.edu/data/mortality.
Mexico—are being negatively affected by the historic drop
in the price of oil that began in late February 2020.
Another economic challenge for the region is that incoming
remittances from abroad (the majority from the United
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
States) are expected to drop significantly as a result of
The COVID-19 pandemic could exacerbate some of these
COVID-19. For several countries—El Salvador,
factors, contribute to further deterioration in political
Guatemala, Haiti, Honduras, Jamaica, and Nicaragua—
conditions, and stoke social unrest similar to that in 2019.
remittances play a significant role in their economies. The
Human rights groups and other observers have expressed
high rate of informality in the labor market of many Latin
concern about leaders taking advantage of the pandemic to
American countries (reportedly about half of workers in
advance their own agendas. In El Salvador, critics accuse
Latin America work in the informal economy) is also a
President Bukele of exploiting the health crisis to pursue his
challenge. As the World Bank notes, many workers are
aggressive anti-gang policies. In Bolivia, the interim
self-employed and many are paid under the table, living
government postponed presidential elections from May to
paycheck to paycheck without a safety net. Such
September 2020, and then postponed them again to October
characteristics make it more difficult to design programs
19, 2020, prompting widespread protests.
that reach and provide adequate assistance to these workers.
U.S. Policy Considerations
Although a number of countries in the region have
Foreign Aid and Support for PAHO. In light of the
implemented stimulus programs to help protect their
pandemic and its economic and social effects, policymakers
economies and vulnerable populations, many countries may
may consider the appropriate level of U.S. foreign
struggle to obtain the financing necessary to respond to the
assistance for the region and for PAHO. The
severe economic downturn. In response, the international
Administration’s FY2021 budget request—released prior to
financial institutions are increasing lending to countries
the pandemic—included $1.4 billion for the region, about
throughout the region. Examples include
an 18% decline from the estimated amount appropriated in
FY2020. The request included almost $133 million in
The Inter-American Development Bank (IDB)
Global Health Programs assistance for the region, 37% less
announced in March 2020 that it was providing lending
than the FY2020 estimate. In addition, the Administration
support to countries in four priority areas: the immediate
requested $16.3 million for PAHO, almost a 75% cut from
public health response, safety nets for vulnerable
estimated appropriations in FY2019.
populations, economic productivity and employment,
and fiscal policies for the amelioration of economic
In March 2020, Congress passed two supplemental
impacts. The IDB is making available up to $12 billion,
appropriations measures—P.L. 116-123 and P.L. 116-
including $3.2 billion in additional funding for 2020 and
136—that provided nearly $1.8 billion in aid to respond to
the remainder in reprogrammed existing health projects.
COVID-19 globally. As of July 29, 2020, the
Administration said it was providing almost $138 million in
The World Bank, as of August 7, 2020, reported that it
new and previously announced assistance to help countries
is providing almost $4 billion to 17 Latin American and
in the region respond to the pandemic, including $102
Caribbean countries. The assistance focuses on
million in humanitarian assistance, $28 million in health
minimizing the loss of life, strengthening health systems
assistance, and $8 million in economic aid. The House
and disease surveillance, mitigating the pandemic’s
foreign aid appropriations bill, H.R. 7608, passed July 24,
economic impact, and addressing supply-chain issues
2020, would fully fund the U.S. assessed contribution of
and delivery. Over the next 15 months, countries in the
$65.2 million to PAHO in FY2021 and provide $9.1 billion
region also may benefit from a portion of the $160
in emergency aid to respond to COVID-19 worldwide.
billion in worldwide assistance the bank is providing.
Sanctions. Some U.N. officials, human rights
The IMF, as of August 10, 2020, approved $50.9 billion
organizations, and Members of Congress have called for
in lending to 20 countries in the region contending with
U.S. economic sanctions on Venezuela and Cuba to be
the pandemic’s economic impact, including Chile, $23.9
waived during the pandemic. The Treasury Department
billion; Peru, $11 billion; and Colombia, $10.8 billion.
released a fact sheet in April 2020 maintaining that U.S.
sanctions programs generally allow for legitimate
Political Impact
humanitarian-related trade and assistance. At the same time,
Even before the pandemic, public satisfaction with quality
the Trump Administration has continued to increase
of democracy in several Latin America and Caribbean
economic sanctions on both countries.
countries was eroding. The 2018-2019 AmericasBarometer
public opinion survey showed the lowest level of
Deportations. Several countries in the region, including
satisfaction with democracy since the poll began in 2004.
Guatemala, Haiti, and Mexico, report that some migrants
Several broad political and economic factors have driven
removed from the United States were infected with the
the decline and help explain the eruption of social protests
virus. As a result, Guatemala suspended U.S. deportation
in the region in 2019. Political factors include an increase in
flights several times. Some human rights groups, migrant
authoritarian practices, weak democratic institutions,
advocates, and Members of Congress have called for the
politicized judicial systems, corruption, and high levels of
suspension of deportations to the region amid the pandemic.
crime and violence. Economic factors include stagnant or
declining growth; high levels of inequality and poverty; and
Mark P. Sullivan, Specialist in Latin American Affairs
inadequate public services, social safety net programs, and
June S. Beittel, Analyst in Latin American Affairs
advancement opportunities.
Peter J. Meyer, Specialist in Latin American Affairs
Clare Ribando Seelke, Specialist in Latin American
Affairs
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
IF11581
Maureen Taft-Morales, Specialist in Latin American
Affairs
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https://crsreports.congress.gov | IF11581 · VERSION 6 · UPDATED