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Updated December 17, 2020
Latin America and the Caribbean: Impact of COVID-19
The Coronavirus Disease 2019 (COVID-19) pandemic is
protracted process in countries that rely heavily on global
having widespread economic, social, and political effects
trade and investment. Caribbean nations that depend on
on Latin America and the Caribbean, a region with strong
tourism face deep economic recessions, several with
congressional interest because of deep U.S. linkages .
projected gross domestic product declines well over 10% in
2020, according to the IMF. Likewise, several South
As of December 15, 2020, the region had over 14.1 million
American nations hard hit by the pandemic are projected to
confirmed cases (19.4% of cases worldwide) and almost
register economic contractions over 10%. Although most
473,000 deaths (29.2% of deaths worldwide). Brazil,
Latin American and Caribbean countries are expected to
Mexico, Argentina, Colombia, and Peru have the highest
begin to recover economically in 2021, the expected
numbers of deaths in the region, and Brazil has the highest
regional growth rate of 3.6% lags behind the expected
death toll worldwide after the United States. The rankings
world economic growth forecast of 5.2%.
change in terms of per capita deaths—Peru has the highest
recorded deaths per capita in the region, followed by
Table 1. COVID-19 Cases, Deaths, and Mortality
Argentina, Mexico, Brazil, and Chile (see Table 1). Brazil
Rates in Latin America and the Caribbean (LAC)
and Mexico are currently experiencing a surge in cases, and
(countries with more than 2,000 deaths, as of Dec. 15, 2020)
some observers are concerned about a potential post-
Christmas surge throughout the region in early 2021 as
Cases
Deaths per
countries let their guards down over the holidays. A
Country
Deaths
(millions)
100,000
University of Washington COVID-19 projection model
forecasts deaths in Latin America and the Caribbean could
Brazil
6.927
181,835
86.81
reach more than 646,000 by April 1, 2021.
Mexico
1.256
114,298
90.58
Experts and observers have expressed concern that some
Argentina
1.503
41,041
92.24
countries, such as Mexico, Nicaragua, and Venezuela, are
significantly undercounting their death tolls. Many
Colombia
1.435
39,195
78.94
observers have expressed special concern for Venezuela,
where the health care system was collapsing prior to the
Peru
.985
36,677
114.65
pandemic. (See CRS In Focus IF11029, The Venezuela
Chile
.574
15,931
85.06
Regional Humanitarian Crisis and COVID-19).
Ecuador
.202
13.875
81.21
The Pan American Health Organization (PAHO) has played
a major role in supporting countries in preventing,
Bolivia
.147
9,024
79.48
detecting, and responding to the pandemic. When the
Guatemala
.129
4,445
25.77
pandemic first began to surge in the region in May 2020,
PAHO Director Dr. Carissa Etienne expressed concern
Panama
.195
3,382
80.97
about the poor and other vulnerable groups at greatest risk,
Honduras
.115
2,989
31.18
including those living in cities, towns, and remote
communities in the Amazon Basin (including indigenous
Dom. Rep.
.155
2,364
22.24
communities); people of African descent; migrants in
Total LAC
14.103
472,801
—
temporary settlements; and prisoners in crowded jails. In
July 2020, PAHO issued an alert urging countries to
United States
16.519
300,479
91.84
intensify efforts to prevent further spread of the virus
Source: Johns Hopkins University School of Medicine, Coronavirus
among indigenous communities in the Americas. In
Resource Center, “Mortality Analyses,” December15, 2020, updated
September 2020, PAHO warned about increasing cases in
daily, at https://coronavirus.jhu.edu/data/mortality.
Central America and the Caribbean. Now, PAHO is helping
countries prepare for a successful rollout of vaccines and
The decline in economic growth in 2020 is expected to
facilitating access to vaccines under the COVAX
exacerbate income inequality and poverty throughout the
mechanism developed by the World Health Organization
region. Latin America already was the most unequal region
and other global health organizations.
in the world in terms of income inequality, according to the
U.N. Economic Commission for Latin America and the
Economic Impact
Caribbean (ECLAC). ECLAC projects that in 2020,
Before the pandemic, the International Monetary Fund
inequality will rise in all countries, with the worst results in
(IMF) projected 1.6% economic growth for the region in
the region’s largest economies—Brazil, Mexico, and
2020; in its October 2020 forecast, the IMF projected an
Argentina. According to a July 2020 U.N. report, poverty is
8.1% economic contraction for the region, with almost
expected to increase from 30.3% of the region’s population
every country in recession. Economic recovery may be a
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
in 2019 to 37.2% in 2020, an increase of 45 million people
opportunities. The COVID-19 pandemic has exacerbated
(to 230 million people total).
these factors, which have stoked social unrest in several
countries.
In April 2020, the World Bank predicted remittances from
abroad to Latin America and the Caribbean would decline
Human rights groups and other observers have expressed
by over 19% in 2020. Remittances, however, began to
concern about leaders taking advantage of the pandemic to
rebound in June and July 2020, and the expected regional
advance their own agendas and restrict freedom of
decline is small for the year, with some countries such (e.g.,
expression. In El Salvador, critics accuse President Bukele
Mexico) seeing an increase. The labor markets of many
of exploiting the health crisis to pursue his aggressive anti-
Latin American countries have high rates of informality,
gang policies. In Bolivia, the interim government twice
with many workers living without a safety net; it is difficult
postponed presidential elections, prompting widespread
to design programs that reach and provide adequate
protests, until elections were held successfully in October
assistance to these workers.
2020. In Venezuela, the government and security forces
have used a state of emergency imposed to curb the spread
In response to the vast need for financing to respond to the
of the virus as an excuse to crack down on dissent. Cuba
pandemic and the associated economic downturn,
also has used regulations designed to prevent the spread of
international financial institutions have increased lending to
COVID-19 to repress government opponents.
countries throughout the region.
The IMF has approved, as of December 15, 2020, $63.8
U.S. Policy Considerations
billion in lending to 21 countries in the region
In March 2020, Congress passed two supplemental
contending with the pandemic’s economic impact,
appropriations measures—P.L. 116-123 and P.L. 116-
including Chile ($23.9 billion), Colombia ($16.9
136—that provided nearly $1.8 billion in aid to respond to
billion), Peru ($11 billion), and Ecuador ($7.1 billion).
COVID-19 globally. The State Department reported, that as
of August 2020 (latest information made available), the
The Inter-American Development Bank (IDB) to date
United States was providing $141.4 million in new and
has provided $7.9 billion in project financing, including
previously announced assistance to help countries in the
$705 million for the immediate public health response,
region respond to the pandemic, including $103.3 million in
$2.2 billion for vulnerable populations, $2.2 billion for
humanitarian assistance, $27.6 million in health assistance,
economic productivity and employment, $1.3 billion for
and $10.5 million in economic aid. As of December 2020,
public policy and fiscal management, and $1.2 billion in
the U.S. Southern Command completed over 370 projects
special development lending. On December 16, 2020,
providing COVID-19 related humanitarian assistance to 28
the IDB announced it would mobilize an additional $1
countries in the region.
billion to help countries acquire and distribute COVID-
19 vaccines, working closely with PAHO and other
The Administration’s FY2021 budget request—released
institutions.
prior to the pandemic—included $1.4 billion in foreign
assistance for the region, about an 18% decline from the
The World Bank, as of December 1, 2020, has provided
estimated amount appropriated in FY2020. The request
$4.6 billion to 21 countries in the region. Assistance
included almost $133 million in Global Health Programs
focuses on minimizing the loss of life, strengthening
assistance for the region, 37% less than the FY2020
health systems and disease surveillance, mitigating the
estimate. The Administration also requested $16.3 million
pandemic’s economic impact, and addressing supply-
for PAHO, a 75% cut from estimated FY2020
chain issues and delivery. Over the next 15 months,
appropriations. Both the House foreign aid appropriations
countries in the region also may benefit from a portion
bill, H.R. 7608, approved in July 2020, and the Senate
of the $160 billion in worldwide assistance the bank is
Appropriations Committee draft bill appear to fully fund the
providing.
U.S. assessed contribution of $65.2 million to PAHO for
The Development Bank of Latin America announced in
FY2021. H.R. 7608 also would provide $9.1 billion in
July 2020 that it has provided $4.9 billion in financing
emergency aid to respond to COVID-19 worldwide. (See
to address the effects of the pandemic across the region.
CRS Report R46514, U.S. Foreign Assistance to Latin
America and the Caribbean: FY2021 Appropriations.)
Political Impact
S. 4997, introduced December 10, 2020, would authorize
Even before the pandemic, public satisfaction with the
$24 billion for a capital increase for the IDB to strengthen
quality of democracy in several Latin America and
its capacity to support member countries in their efforts to
Caribbean countries was eroding. The 2018-2019
address the pandemic and its related economic impact and,
AmericasBarometer public opinion survey showed the
more broadly, to advance inclusive economic and social
lowest level of satisfaction with democracy since the poll
development in the Americas.
began in 2004. Several broad political and economic factors
have driven the decline and help to explain the eruption of
Mark P. Sullivan, Specialist in Latin American Affairs
social protests in the region in 2019. Political factors
June S. Beittel, Analyst in Latin American Affairs
include an increase in authoritarian practices, weak
Peter J. Meyer, Specialist in Latin American and Canadian
democratic institutions, politicized judicial systems,
Affairs
corruption, and high levels of crime and violence.
Clare Ribando Seelke, Specialist in Latin American
Economic factors include stagnant or declining growth;
high levels of inequality and poverty; and inadequate public
Affairs
services, social safety net programs, and advancement
https://crsreports.congress.gov
Latin America and the Caribbean: Impact of COVID-19
IF11581
Maureen Taft-Morales, Specialist in Latin American
Affairs
Disclaimer
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https://crsreports.congress.gov | IF11581 · VERSION 11 · UPDATED