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COVID-19 RECOVERY in LATIN AMERICA and the CARIBBEAN: a Partnership Strategy for the Biden Administration

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COVID-19 RECOVERY in LATIN AMERICA and the CARIBBEAN: a Partnership Strategy for the Biden Administration COVID-19 RECOVERY IN LATIN AMERICA AND THE CARIBBEAN: A Partnership Strategy for the Biden Administration Lead Authors: Jason Marczak and Cristina Guevara In collaboration with hemispheric advisers Foreword by Representative Albio Sires, Western Hemisphere Subcommittee Chairman Atlantic Council ADRIENNE ARSHT LATIN AMERICA CENTER The Adrienne Arsht Latin America Center (AALAC) broadens understanding of regional transformations through high-impact work that shapes the conversation among policymakers, the business community, civil society, and media. Founded in 2013, the Center focuses on Latin America’s strategic role in a global context with a priority on pressing political, economic, and social issues that will define the trajectory of the region now and in the years ahead. Select lines of programming include: Venezuela’s crisis; Mexico’s US and global ties; China in Latin America; Colombia’s future; a changing Brazil; Central American prosperity; combatting disinformation; shifting trade patterns and modernization of supply chains; charting a post-COVID future; Caribbean development; and leveraging energy resources. Jason Marczak serves as Center Director. Cover photo: National Guard members watch as workers unload a batch of the Pfizer-BioNTech COVID-19 vaccines after its arrival at Benito Juarez International airport, amidst the spread of the coronavirus disease (COVID-19), in Mexico City, Mexico February 16, 2021. REUTERS/Carlos Jasso. This report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The authors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this issue brief’s conclusions. Atlantic Council 1030 15th Street NW, 12th Floor Washington, DC 20005 For more information, please visit www.AtlanticCouncil.org. ISBN-13: 978-1-61977-166-6 March 2021 Atlantic Council ADRIENNE ARSHT LATIN AMERICA CENTER COVID-19 RECOVERY IN LATIN AMERICA AND THE CARIBBEAN: A Partnership Strategy for the Biden Administration Lead Authors: Jason Marczak and Cristina Guevara In collaboration with hemispheric advisers Foreword by Representative Albio Sires, Western Hemisphere Subcommittee Chairman Table of Contents I. Executive Summary 4 II. One Year After the Region’s First COVID-19 Case: Where Are We? 8 III. Regional Recovery: Why It’s a US Foreign Policy Priority 11 IV. Goals of a Regional COVID-19 Recovery Strategy: Prosperity, Security, and Democracy 12 V. A Six-Point Plan to Help the Region Rebuild Stronger 13 1. Investing in Health: A Key to Regional Prosperity 14 2. Economic Revitalization: Addressing Corruption and Building Resilience 17 3. The Future of Hemispheric Commerce: Integration, Infrastructure, and Technology 21 4. Climate Action: Implementing Commitments and Integrating Policies 24 5. Education: A Pillar for Growth and Social Inclusion 25 6. Democracy and Governance: Working Together to Strengthen Institutions 28 VI. Advisers 31 VII. Acknowledgements 32 VIII. About the Authors 33 COVID-19 RECOVERY IN LATIN AMERICA AND THE CARIBBEAN 2 COVID-19 RECOVERY IN LATIN AMERICA AND THE CARIBBEAN Foreword rom Mexico City to Manaus, the COVID-19 pan- boundless economic potential. Its natural endowments offer demic has ravaged communities throughout Latin unparalleled opportunities to invest in a sustainable recovery. America and the Caribbean. In March 2020, families Hemispheric trade and potential nearshoring could stimulate in Guayaquil searched for coffins to bury their loved investment, employment, the diversification of economies, Fones. In April and May, Venezuelans who had fled the Maduro and regional integration. The pandemic certainly presents dictatorship were forced to return home after having lost their a historic opportunity for the region to embrace a transfor- jobs in neighboring countries. As someone who has spent fif- mative agenda, but a long road ahead remains to repair the teen years in Congress advocating for the United States to damage this pandemic has caused. The United States, as a work more closely with our friends in Latin America and the hemispheric neighbor, has an important role to play in this Caribbean, I was deeply saddened as this region became an recovery. epicenter of the COVID-19 pandemic. As vaccine deployment begins, we must redouble our efforts The pandemic’s impact on Latin America and the Caribbean to ensure US assistance gets to those who need it most. We has exposed vulnerabilities particular to the region, such as need to work closely with our allies to advance an inclusive high levels of informality that made it difficult for govern- recovery that reaches historically overlooked groups, includ- ments to manage the disease’s spread, despite both public ing indigenous and Afro-descendant populations. closures and expanded testing efforts. Weak health systems I will be working with the Biden administration and my col- in many countries led to unequal access to essential health leagues in Congress to ensure US assistance helps address services and disproportionate impact on more vulnerable immediate needs such as vaccine procurement and deploy- communities. Stay-at-home orders also exacerbated an epi- ment, emergency food insecurity, and poverty. But the admin- demic within a pandemic—that of gender-based violence. istration should also prioritize long-term thinking on assis- Calls to domestic violence hotlines skyrocketed and countries tance to the region that strengthens democratic institutions like Mexico saw record-breaking femicides in 2020. and health systems, combats corruption, bolsters economies Some governments used the pandemic to curtail freedom of to create more formal jobs, and ends the epidemic of violence expression or take advantage of emergency powers, which against women. accelerated the erosion of democratic norms and institutions This publication comes at a critical moment to advance our already underway in some countries. Economies throughout long-term thinking about how the United States can partner the region shrunk, with the prospects for a full recovery with the region in its COVID-19 recovery. It highlights specific appearing to be several years, if not a decade, away. A recent short- and long-term actions that can be taken by the United United Nations (UN) report concluded that in 2020, an addi- States to help achieve security, accelerate prosperity, and tional 22 million people in the region plunged into poverty. strengthen democracy in Latin America and the Caribbean. Nearly 60 million people fell out of the middle class.1 While the The United States has the opportunity to position itself as the population of the region represents less than 9 percent of the most important partner for its neighbors by supporting the world’s population, Latin America and the Caribbean has had region’s sustainable and inclusive recovery. By working with over a quarter of the world’s deaths.2 our hemispheric partners during this moment of great need, Nearly a year later, there are reasons for cautious optimism. the United States itself will be stronger, safer, and better posi- Latin America and the Caribbean remains a region of tioned to lead this hemisphere into a post-pandemic future. Representative Albio Sires, (D-NJ) Chairman, Subcommittee on the Western Hemisphere, Civilian Security, Migration and International Economic Policy House Foreign Affairs Committee 3 COVID-19 RECOVERY IN LATIN AMERICA AND THE CARIBBEAN I Executive Summary he Americas have been hit harder by the COVID- A Latin America and the Caribbean region that is secure, eco- 19 pandemic than any other region in the world, nomically prosperous, and democratic provides stability and accounting for nearly half of the 2.6 million global opportunities for the United States in its own hemisphere. This deaths attributed to the disease as of early March is all the more essential in today’s chaotic and unpredictable T2021.3 The responses to the pandemic, including ongoing world. Thus, it is in the United States’ interest to be the partner school closures and the shutdown of millions of businesses, of choice for the hemisphere in its COVID-19 recovery. have resulted in the largest global recession since the Great The question is: How can and should the United States partner Depression. Latin American and Caribbean economies were with the region? To help Latin American and Caribbean hit hardest in 2020, with regional GDP contraction (-6.9 per- countries—and the rest of the developing world—secure a cent) more than three percentage points higher than the vaccine, the United States, under US President Joseph R. world average. Regional growth predictions for 2021 will be Biden, Jr., has joined the COVAX Facility, re-entered the WHO, insufficient to return to the pre-COVID-19 levels of economic and can further promote PPPs between US companies and activity, lagging behind the rest of the world.4 countries in the region. In addition to securing equitable Amid ongoing social and economic disruption, inequality in vaccine access and distribution, however, Latin American and the world’s most unequal region is on the rise. Millions are Caribbean countries face a multitude of issues that have been falling into poverty, corruption is rampant, and disinformation exacerbated by the pandemic: struggling healthcare systems, massively circulated. In the face of the pandemic’s multidi- lagging supply chain integration, escalating social tensions, mensional impacts,
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