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Updated October 7, 2020
Latin America and the Caribbean: Impact of COVID-19
The Coronavirus Disease 2019 (COVID-19) pandemic is
economic recessions, with a projected gross domestic
having widespread economic, social, and political effects
product decline of 10.3% in 2020, according to the IMF.
on Latin America and the Caribbean, a region with strong
The decline in economic growth in 2020 is expected to
congressional interest because of deep U.S. linkages .
exacerbate income inequality and poverty throughout the
As of October 6, 2020, the region had almost 9.7 million
region. Latin America was already the most unequal region
confirmed cases (27% of cases worldwide) and over
in the world in terms of income inequality, according to the
357,000 deaths (34% of deaths worldwide). Brazil, Mexico,
U.N. Economic Commission for Latin America and the
Peru, Colombia, and Argentina have the highest numbers of
Caribbean (ECLAC). ECLAC projects that in 2020,
deaths in the region, and Brazil has the highest death toll
inequality will rise in all countries, with the worst results in
worldwide after the United States. The rankings change in
the region’s largest economies—Brazil, Mexico, and
terms of per capita deaths—Peru has the highest recorded
Argentina. According to a July 2020 U.N. report, poverty is
deaths per capita in the region, followed by Bolivia, Brazil,
expected to increase from 30.3% of the region’s population
Chile, and Ecuador (see Table 1). Several countries have
in 2019 to 37.2% in 2020, an increase of 45 million people
recently reported a gradual decline in cases and deaths from
(to 230 million people total).
peaks in August 2020. Nevertheless, a University of
Washington COVID-19 projection model forecasts that
Table 1. COVID-19 Deaths and Mortality Rates in
deaths in Latin America and the Caribbean could reach
Latin America and the Caribbean (LAC)
more than 500,000 by January 1, 2021.
(countries with more than 1,000 deaths, as of Oct. 6, 2020)
Experts and observers have expressed concern that some
Regional
countries, such as Mexico, Nicaragua, and Venezuela, are
Deaths per
Rank
significantly undercounting their death tolls. Many
Country
Deaths
100,000
(deaths per
observers have expressed special concern for Venezuela,
100,000)
where the health care system was collapsing prior to the
pandemic. (See CRS In Focus IF11029, The Venezuela
Brazil
146,675
70.02
3
Regional Humanitarian Crisis and COVID-19).
Mexico
81,877
64.88
6
When the pandemic first began to surge in the region in
Peru
32,742
102.35
1
May 2020, the Director of the Pan American Health
Organization (PAHO), Dr. Carissa Etienne, expressed
Colombia
26,844
54.07
8
concern about the poor and other vulnerable groups at
greatest risk, including particular concern for those living in
Argentina
21,468
48.25
9
cities, towns, and remote communities in the Amazon Basin
Chile
13,037
69.61
4
(including indigenous communities), people of African
descent, migrants in temporary settlements, and prisoners in
Ecuador
11,681
68.37
5
crowded jails. In July 2020, PAHO issued an alert urging
Bolivia
8,129
71.6
2
countries to intensify effort to prevent further spread of the
virus among indigenous communities in the Americas. In
Guatemala
3,302
19.14
14
September 2020, PAHO warned about increasing cases in
Honduras
2,433
25.38
10
Central America and the Caribbean.
Panama
2,430
58.18
7
Economic Impact
Dom. Rep.
2,144
20.17
12
Before the pandemic, the International Monetary Fund
(IMF) projected 1.6% economic growth for the region in
Total LAC
357,304
—
—
2020 but forecast a recession for several countries. On June
United States
210,181
64.24
—
24, 2020, the IMF revised its regional forecast to a
contraction of 9.4%, with almost every country in
Source: Johns Hopkins University School of Medicine, Coronavirus
recession. Economic recovery may be a protracted process
Resource Center, “Mortality Analyses,” October 6, 2020, updated
in countries that rely heavily on global trade and
daily, at https://coronavirus.jhu.edu/data/mortality.
investment, which the pandemic is significantly affecting.
Note: The Bahamas had 24.29 deaths per 100,000, 11th highest in the
Oil-producing countries in the region, especially Venezuela
region, and Costa Rica had 19.74 deaths per 100,000, 13th highest in
and Ecuador—and, to a lesser extent, Brazil, Colombia, and
the region.
Mexico—are being negatively affected by the historic drop
in the price of oil that began in late February 2020.
The World Bank had predicted in April 2020 that
Caribbean nations that depend on tourism face deep
remittances from abroad to Latin America and the
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
Caribbean would decline by over 19% in 2020. There are
Human rights groups and other observers have expressed
some indications, however, that remittances began to
concern about leaders taking advantage of the pandemic to
rebound in June and July 2020. The labor markets of many
advance their own agendas. In El Salvador, critics accuse
Latin American countries have high rates of informality,
President Bukele of exploiting the health crisis to pursue his
with many workers living without a safety net, making it
aggressive anti-gang policies. In Bolivia, the interim
difficult to design programs that reach and provide adequate
government twice postponed presidential elections,
assistance to these workers.
prompting widespread protests. In Venezuela, the
government and security forces have used a state of
Although a number of countries in the region have
emergency imposed to curb the spread of the virus as an
implemented stimulus programs to help protect their
excuse to crack down on dissent.
economies and vulnerable populations, many countries may
struggle to obtain the financing necessary to respond to the
U.S. Policy Considerations
severe economic downturn. In response, the international
Foreign Aid and Support for PAHO. In light of the
financial institutions are increasing lending to countries
pandemic and its economic and social effects, policymakers
throughout the region. Examples include
may consider the appropriate level of U.S. foreign
The Inter-American Development Bank is making
assistance for the region and for PAHO, which has played a
available up to $12 billion, including $3.2 billion in
major role in supporting the response to COVID-19 in the
additional funding for 2020 and the remainder in
Americas. The Administration’s FY2021 budget request—
reprogrammed existing health projects. It is providing
released prior to the pandemic—included $1.4 billion in
lending support in four priority areas: the immediate
foreign assistance for the region, about an 18% decline
public health response, safety nets for vulnerable
from the estimated amount appropriated in FY2020. The
populations, economic productivity and employment,
request included almost $133 million in Global Health
and fiscal policies for the amelioration of economic
Programs assistance for the region, 37% less than the
impacts.
FY2020 estimate. In addition, the Administration requested
$16.3 million for PAHO, almost a 75% cut from estimated
The World Bank, as of October 2, 2020, reported that it
appropriations in FY2019.
is providing almost $4.5 billion to 20 Latin American
and Caribbean countries. The assistance focuses on
In March 2020, Congress passed two supplemental
minimizing the loss of life, strengthening health systems
appropriations measures—P.L. 116-123 and P.L. 116-
and disease surveillance, mitigating the pandemic’s
136—that provided nearly $1.8 billion in aid to respond to
economic impact, and addressing supply-chain issues
COVID-19 globally. As of August 21, 2020, the
and delivery. Over the next 15 months, countries in the
Administration said it was providing $141.35 million in
region also may benefit from a portion of the $160
new and previously announced assistance to help countries
billion in worldwide assistance the bank is providing.
in the region respond to the pandemic, including $103.3
million in humanitarian assistance, $27.6 million in health
The IMF, as of October 2, 2020, approved $63.6 billion
assistance, and $10.45 million in economic aid. The House
in lending to 20 countries in the region contending with
foreign aid appropriations bill, H.R. 7608, passed July 24,
the pandemic’s economic impact, including Chile, $23.9
2020, would fully fund the U.S. assessed contribution of
billion; Colombia, $16.9 billion; Peru, $11 billion; and
$65.2 million to PAHO in FY2021 and provide $9.1 billion
Ecuador, $7.1 billion.
in emergency aid to respond to COVID-19 worldwide. (See
The Development Bank of Latin America, as of July
CRS Report R46514, U.S. Foreign Assistance to Latin
2020, is providing $4.9 billion in financing to address
America and the Caribbean: FY2021 Appropriations.)
the effects of the pandemic across the region.
Sanctions. Some U.N. officials, human rights
Political Impact
organizations, and Members of Congress have called for
U.S. economic sanctions on Venezuela and Cuba to be
Even before the pandemic, public satisfaction with the
waived during the pandemic. The Treasury Department
quality of democracy in several Latin America and
released a fact sheet in April 2020 maintaining that U.S.
Caribbean countries was eroding. The 2018-2019
sanctions programs generally allow for legitimate
AmericasBarometer public opinion survey showed the
humanitarian-related trade and assistance. At the same time,
lowest level of satisfaction with democracy since the poll
the Trump Administration has continued to increase
began in 2004. Several broad political and economic factors
economic sanctions on both countries.
have driven the decline and help explain the eruption of
social protests in the region in 2019. Political factors
Mark P. Sullivan, Specialist in Latin American Affairs
include an increase in authoritarian practices, weak
June S. Beittel, Analyst in Latin American Affairs
democratic institutions, politicized judicial systems,
Peter J. Meyer, Specialist in Latin American Affairs
corruption, and high levels of crime and violence.
Clare Ribando Seelke, Specialist in Latin American
Economic factors include stagnant or declining growth;
Affairs
high levels of inequality and poverty; and inadequate public
services, social safety net programs, and advancement
Maureen Taft-Morales, Specialist in Latin American
opportunities. The COVID-19 pandemic could exacerbate
Affairs
these factors, contribute to further deterioration in political
IF11581
conditions, and stoke social unrest similar to that in 2019.
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Latin America and the Caribbean: Impact of COVID-19
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