Ideas to Action:
Independent research for global prosperity
COVID-19 has hit Latin America hard on the health, economic, and social fronts. Week after week, Brazil, Argentina, Colombia, and Mexico are among the countries with the highest number of COVID cases, and Bolivia, Brazil, Chile, Ecuador, Mexico, and Peru among those with the highest deaths per hundred thousand inhabitants.
The Government of Colombia has been incredibly generous towards this population, enacting several rounds of work permits which granted the right to work, move, and formalize their status. They should be celebrated for these moves, while supported to overcome the remaining constraints to full economic inclusion.
Last fall, CGD and the Inter-American Development Bank (IDB) launched a report by the joint Sound Banks for Healthy Economies working group. We round up highlights from two of those discussions here, organized by common themes that ran through the events.
From our CGD family to you and yours, we wish you a happy holiday season and a healthier and happier 2021. And, let me offer an enthusiastic farewell to 2020.
New research by Refugees International and the Center for Global Development (CGD) finds that Venezuelans in Peru face major barriers that prevent them from integrating into the Peruvian economy. As a result, many are pushed into informal, low-paying jobs that do not match their qualifications. Some are subjected to exploitation and abuse. And because of these factors, Venezuelans are more vulnerable to economic shocks, such as COVID-19.
Over the past few years, the political and economic crisis in Venezuela has forced nearly 1.8 million Venezuelans to flee to Colombia. The Colombian government has responded warmly, taking steps to integrate Venezuelans into its society and economy. But legal and practical barriers still prevent many Venezuelans from achieving true economic inclusion, the attainment of decent work and income commensurate with their skills.
It is to be expected that this accumulation of negative shocks will translate into an increase in poverty and inequality, but what order of magnitude are we talking about? Which income group is being most affected? To what extent have mitigation measures been able to contain the impact?
With a surging pandemic, income losses, and a deepening recession, Latin America and the Caribbean is facing a health and economic crisis that will test its financial systems like few events in modern times. The blow, however, can be softened. Banks as well as governments and central banks can play a crucial role, providing financing to lessen the impact on families and firms and to speed the recovery.
To cap a volatile week, the countries that own the Inter-American Development Bank (IDB) will likely elect a new president—US citizen Mauricio Claver Carone (aka MCC)—from a field of one. Others have parsed the pros and cons of this outcome given the upcoming US election; here, we look at the priorities and reforms that MCC has floated in the media and reflect on their fit vis a vis the challenges in the region.
CGD colleagues raised questions and concerns at the time of the announcement. In weighing his possibly presidency, an especially salient question becomes: can Claver-Carone deliver a general capital increase (GCI)?
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