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Wednesday 27 January 2021 LOCAL
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In Latin America and the Caribbean:
Fragile and uneven economic recovery expected, warns new UN report

COVID-19 pandemic has wreaked havoc on the region, exacerbating deep-rooted

inequalities and pushing millions into poverty

NEW YORK — Latin Ameri- of another lost decade – in
ca and the Caribbean will terms of both economic
face a fragile and uneven growth and development
recovery as the COVID-19 progress – is looming large
crisis may leave lasting for Latin America and the
scars on the region’s econ- Caribbean.
omies, according to the UN
World Economic Situation The report emphasizes that
and Prospects (WESP) 2021, monetary and fiscal sup-
which was launched Janu- port measures have provid-
ary 25th. ed a lifeline to households
and businesses across the
The report warns that the region. Although many
devastating socio-eco- countries entered the pan-
nomic impact of the CO- demic with sizeable fiscal
VID-19 pandemic will be deficits and high public
felt for years to come un- debt levels, Governments
less smart investments in deployed considerable
economic, societal and resources to combat the
climate resilience ensure a health and economic crisis.
robust and sustainable re- Brazil, Chile and Peru intro-
covery of the global econ- duced the largest stimulus
omy. packages in the region,
In 2020, the world economy General António Guterres, Rashid, Chief of the Glob- vere economic, social and amounting to an estimated
shrank by 4.3 per cent, over who will address the Davos al Economic Monitoring political difficulties – has 10 - 15 per cent of GDP.

two and half times more Agenda event later today. Branch at the UN Depart- exposed and exacerbat- “Going forward, contin-
than during the global crisis “Let’s invest in an inclu- ment of Economic and So- ed deep-rooted structural ued fiscal support remains
of 2009. The modest recov- sive and sustainable future cial Affairs, and the lead inequalities, for example critical for the recovery
ery of 4.7 per cent expect- driven by smart policies, author of the report. between formal and infor- as national efforts of re-
ed in 2021 would barely off- impactful investments, and Haiti, Paraguay and Uru- mal workers, and men and source mobilization must
set the losses of 2020. a strong and effective mul- guay, for example, have women. be complemented by im-
The pandemic has ravaged tilateral system that places been able to contain the Millions of jobs have been proved access to external
countries in Latin America people at the heart of all spread of the virus and limit lost, especially in the in- finance,” added Rashid.
and the Caribbean, exact- socio-economic efforts.” the economic damage. formal sector, where most Without decisive policy ac-
ing a heavy human toll and The report underscores that On the other hand, Argen- occupations are contact- tion, the crisis could have a
causing an economic con- sustained recovery from tina, Peru, Panama as well intensive. Women, young lasting negative impact on
traction of historic propor- the pandemic will depend as the Caribbean’s tourism- people and workers with the region’s labour markets
tions. The region’s GDP de- not only on the size of the dependent economies low education, who make and investment in physical
clined by 8 per cent in 2020 stimulus measures, and the have been hit particularly up the bulk of employment and human capital. This, in
as prolonged national lock- quick rollout of vaccines, hard, suffering double-digit in sectors such as retail and turn, could further stifle in-
downs, weaker merchan- but also on the quality and contractions of GDP. Faster- hospitality, were most se- novation and productivity
dise exports and a collapse efficacy of these measures than-expected rebounds in verely affected. Job and growth, holding back liv-
in tourism undermined eco- to build resilience against commodity prices – driven income losses have pushed ing standards. Against this
nomic activities. future shocks. by strong industrial activity millions of people in Latin backdrop, there are grow-
“We are facing the worst Latin America and the Ca- in China – and remittance America and the Caribbe- ing calls for a new devel-
health and economic crisis ribbean’s difficult path out inflows have provided sup- an into poverty, wiping out opment model, centered
in 90 years. As we mourn of the COVID-19 crisis port for many economies in all progress made over the on a radical transforma-
the growing death toll, we “While no country in the re- South America and Central past 15 years. tion of production and
must remember that the gion has been spared from America. Investment activities across con¬sumption patterns.
choices we make now will the fallout of the crisis, the The region’s short-term the region have taken a
determine our collective severity of the shock has outlook is fraught with un- severe – and most likely About the World Econom-
future,” said UN Secretary- varied significantly across certainties over the evolu- pro¬longed – hit from the ic Situation and Prospects
countries,” said Hamid tion of the pandemic, the pandemic. Amid falling 2021
rollout of vaccines and the consumer demand, tem- The World Economic Situa-
impact of economic policy porary business clo¬sures tion and Prospects 2021 is
measures. The UN baseline and heightened uncertain- a report produced by the
scenario projects a mod- ties, firms have rolled back UN Department of Eco-
est recovery in growth of planned investment. nomic and Social Affairs
3.8 per cent in 2021 and 2.6 The 13 per cent decline in (DESA), in partnership with
per cent in 2022, with ag- investment in 2020 dwarfs the UN Conference on
gregate output expected the drop experi¬enced Trade and Development
to reach its pre-crisis level in 2009. While investment (UNCTAD), and the five UN
only by the end of 2023. bounced back quickly af- regional commissions. The
The pandemic – which ter the global financial cri- UN World Tourism Organiza-
came at a time when many sis, a fast recovery seems tion also contributed to the
countries in Latin America unlikely this time around report. For more informa-
and the Caribbean were amid significant and linger- tion, please visit: www.bit.
already struggling with se- ing uncertainties. The threat ly/wespreport. q