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Updated September 3, 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 a projected gross domestic
on Latin America and the Caribbean, a region with strong
product decline of 10.3% in 2020, according to the IMF.
congressional interest because of deep U.S. linkages .
The decline in economic growth in 2020 is expected to
As of September 2, 2020, the region had almost 6.1 million
exacerbate income inequality and poverty throughout the
confirmed cases (almost 28% of cases worldwide) and
region. Latin America was already the most unequal region
almost 280,000 deaths (almost 33% of deaths worldwide),
in the world in terms of income inequality, according to the
with 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 has
inequality will rise in all countries, with the worst results in
the highest death toll worldwide after the United States. The
the region’s largest economies—Brazil, Mexico, and
rankings change in terms of per capita deaths—Peru has the
Argentina. According to a July 2020 U.N. report, poverty is
highest recorded deaths per capita in the region, followed
expected to increase from 30.3% of the region’s population
by Chile, Brazil, Mexico, and Panama (see Table 1). A
in 2019 to 37.2% in 2020, an increase of 45 million people
June 2020 University of Washington model for COVID-19
(to 230 million people total).
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 1,000 deaths, as of Sept. 2, 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
122,596
58.53
3
“the virus is surging across our region” and expressed
Mexico
65,241
51.70
4
concern about the poor and other vulnerable groups at
greatest risk. Dr. Etienne conveyed particular concern for
Peru
28,944
90.48
1
cities, towns, and remote communities in the Amazon
Colombia
20,050
40.38
7
Basin, including indigenous communities, as well as
women (who make up 70% of the health workforce), people
Chile
11,321
60.45
2
of African descent, migrants in temporary settlements, and
Argentina
8,919
20.05
9
prisoners in crowded jails. In June 2020, PAHO issued
guidance on measures to reduce COVID-19 transmission
Ecuador
6,571
38.46
8
among indigenous populations, Afro-descendants, and other
Bolivia
5,101
44.93
6
ethnic groups, and in July, PAHO issued an alert urging
countries to intensify effort to prevent further spread of the
Guatemala
2,778
16.11
12
virus among indigenous communities in the Americas.
Panama
2,018
48.31
5
Economic Impact
Honduras
1,888
19.69
10
Before the pandemic, the International Monetary Fund
(IMF) projected 1.6% economic growth for the region in
Dom. Rep.
1,738
16.35
11
2020 but forecast a recession for several countries. On June
Total LAC
279,788
—
—
24, 2020, the IMF revised its regional forecast to a
contraction of 9.4%, with almost every country in
United States
184,664
56.44
—
recession. Economic recovery may be a protracted process
Source: Johns Hopkins University School of Medicine, Coronavirus
in countries that rely heavily on global trade and
Resource Center, “Mortality Analyses,” September 2, 2020, updated
investment, which the pandemic is significantly affecting.
daily at https://coronavirus.jhu.edu/data/mortality.
Oil-producing countries in the region, especially Venezuela
and Ecuador—and, to a lesser extent, Brazil, Colombia, and
The World Bank had predicted in April 2020 that
Mexico—are being negatively affected by the historic drop
remittances from abroad to Latin America and the
in the price of oil that began in late February 2020.
Caribbean would decline by over 19% in 2020. There are
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
some indications, however, that remittances began to
Human rights groups and other observers have expressed
rebound in June and July 2020. The labor markets of many
concern about leaders taking advantage of the pandemic to
Latin American countries have high rates of informality,
advance their own agendas. In El Salvador, critics accuse
with many workers living without a safety net, making it
President Bukele of exploiting the health crisis to pursue his
difficult to design programs that reach and provide adequate
aggressive anti-gang policies. In Bolivia, the interim
assistance to these workers.
government twice postponed presidential elections,
prompting widespread protests. In Venezuela, the
Although a number of countries in the region have
government and security forces have used a state of
implemented stimulus programs to help protect their
emergency imposed to curb the spread of the virus as an
economies and vulnerable populations, many countries may
excuse to crack down on dissent.
struggle to obtain the financing necessary to respond to the
severe economic downturn. In response, the international
U.S. Policy Considerations
financial institutions are increasing lending to countries
Foreign Aid and Support for PAHO. In light of the
throughout the region. Examples include
pandemic and its economic and social effects, policymakers
may consider the appropriate level of U.S. foreign
The Inter-American Development Bank is making
assistance for the region and for PAHO. The
available up to $12 billion, including $3.2 billion in
Administration’s FY2021 budget request—released prior to
additional funding for 2020 and the remainder in
the pandemic—included $1.4 billion for the region, about
reprogrammed existing health projects. It is providing
an 18% decline from the estimated amount appropriated in
lending support in four priority areas: the immediate
FY2020. The request included almost $133 million in
public health response, safety nets for vulnerable
Global Health Programs assistance for the region, 37% less
populations, economic productivity and employment,
than the FY2020 estimate. In addition, the Administration
and fiscal policies for the amelioration of economic
requested $16.3 million for PAHO, almost a 75% cut from
impacts.
estimated appropriations in FY2019.
The World Bank, as of August 27, 2020, reported that it
In March 2020, Congress passed two supplemental
is providing almost $4 billion to 20 Latin American and
appropriations measures—P.L. 116-123 and P.L. 116-
Caribbean countries. The assistance focuses on
136—that provided nearly $1.8 billion in aid to respond to
minimizing the loss of life, strengthening health systems
COVID-19 globally. As of August 21, 2020, the
and disease surveillance, mitigating the pandemic’s
Administration said it was providing $141.35 million in
economic impact, and addressing supply-chain issues
new and previously announced assistance to help countries
and delivery. Over the next 15 months, countries in the
in the region respond to the pandemic, including $103.3
region also may benefit from a portion of the $160
million in humanitarian assistance, $27.6 million in health
billion in worldwide assistance the bank is providing.
assistance, and $10.45 million in economic aid. The House
foreign aid appropriations bill, H.R. 7608, passed July 24,
The IMF, as of September 2, 2020, approved $50.9
2020, would fully fund the U.S. assessed contribution of
billion in lending to 20 countries in the region
$65.2 million to PAHO in FY2021 and provide $9.1 billion
contending with the pandemic’s economic impact,
in emergency aid to respond to COVID-19 worldwide.
including Chile, $23.9 billion; Peru, $11 billion; and
Colombia, $10.8 billion.
Sanctions. Some U.N. officials, human rights
organizations, and Members of Congress have called for
The Development Bank of Latin America, as of July
U.S. economic sanctions on Venezuela and Cuba to be
2020, is providing $4.9 billion in financing to address
waived during the pandemic. The Treasury Department
the effects of the pandemic across the region.
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 the
the Trump Administration has continued to increase
quality of democracy in several Latin America and
economic sanctions on both countries.
Caribbean countries was eroding. The 2018-2019
AmericasBarometer public opinion survey showed the
Deportations. Several countries in the region, including
lowest level of satisfaction with democracy since the poll
Guatemala, Haiti, and Mexico, report that some migrants
began in 2004. Several broad political and economic factors
removed from the United States were infected with the
have driven the decline and help explain the eruption of
virus. As a result, Guatemala suspended U.S. deportation
social protests in the region in 2019. Political factors
flights several times. Some human rights groups, migrant
include an increase in authoritarian practices, weak
advocates, and Members of Congress have called for the
democratic institutions, politicized judicial systems,
suspension of deportations to the region amid the pandemic.
corruption, and high levels of crime and violence.
Economic factors include stagnant or declining growth;
Mark P. Sullivan, Specialist in Latin American Affairs
high levels of inequality and poverty; and inadequate public
June S. Beittel, Analyst in Latin American Affairs
services, social safety net programs, and advancement
Peter J. Meyer, Specialist in Latin American Affairs
opportunities. The COVID-19 pandemic could exacerbate
Clare Ribando Seelke, Specialist in Latin American
these factors, contribute to further deterioration in political
Affairs
conditions, and stoke social unrest similar to that in 2019.
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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