Latin America and the Coronavirus: Yet another Problem for a Region that already has too many

Extensive media attention has covered how Latin America countries have been handling the coronavirus. Regular accounting of how many cases in each country, including how many deaths, has been unremitting. Government officials have provided lengthy treaties on the nature of the disease and how citizens can avoid contracting it. Political leaders have repeatedly provided assurances to their populations of their government’s capacity to confront and contain the disease. Given the relatively small number of cases (17) and no reported deaths as of March 4, a casual observer might think everything is in hand. It is not.

The Disease will have a substantial
negative economic impact on the region

The disease will quickly exacerbate the already difficult economic problems faced by most countries of the region. Over recent decades, China became the region’s second highest export market with trade rising 27 percent between 2000-2013. In seven Latin American countries, China has surpassed the United States as the main destination for exports. Agricultural commodities, such as soy, and minerals are leading exports to China. China is a particularly important trading partner for Peru, Brazil, and Chile.

It was the rise in commodity exports that drove economic growth and poverty reduction during the first half of the 2000s. However, already the coronavirus has produced a significant slowdown in the Chinese economy, and this will mean a further decline in demand for Latin America’s commodities and a consequent drop in economic growth. In addition, the closure of factories in China has resulted in the interruption of production chains. The manufacturing sectors in Mexico and Brazil rely heavily on Chinese suppliers for parts and intermediate goods. Samsung and Motorola have had to stop producing cellphones in Brazil due to the lack of parts. There is speculation that car manufacturers, electronics and appliances makers, and pharmaceutical companies could also be forced to reduce production. The Central American garment industry is currently facing delays in imported fabric and yarn from China. The disease will also significantly negatively impact the tourist industry.

The deterioration of trade, the further slowdown in economic growth, and increasing layoffs will contribute to a rise in poverty, an increase already underway with the end of the commodity boom. The decline in government revenues occasioned by the drop in economic growth and activities will reduce the ability to governments to provide much in the way of investment stimulus.

The Region’s Heath Challenges

While the commodity boom years saw significant improvement in health care delivery in a number of countries for the poorest citizens, Latin America’s health care infrastructure remains inadequate. The economic downturn occasioned first by the decline in commodity prices, and now by the coronavirus, will mean a continuing decline in government resources to improve health care delivery. Even now, few countries meet international standards for numbers of doctors/nurses or hospital beds per 100,000 inhabitants. Average investment in public health remains below that of the Global North. An estimated 30 percent of the population lack access to health care for economic reasons while 21% do not seek care because of geographical barriers. Moreover, the region faces new and increasingly serious health care challenges linked to the interrelated processes of deforestation and climate change.

In response to demands for its commodities, countries significantly expanded the area devoted to such commodities as soy and beef production. With the drop in commodity prices, there has been increased pressure to further increase production. Indeed, the recent rise in clearing forest land through fires in the Brazilian and Bolivian Amazon has been linked to the strategy of increasing beef and soy production. Deforestation has been an important contributor to the expansion of new diseases throughout the region—diseases whose spread has received only scant coverage by the media in comparison with the coverage of the coronavirus. These diseases have become increasingly serious, impacting the most vulnerable sectors of the population.

Deforestation Contributes to the spread of Mosquito-borne Diseases

In the last few years, mosquito-borne diseases, such as dengue fever, malaria, and the zika virus, have reached record levels in Latin America. In 2019 nearly 3 million cases of dengue fever were reported across Latin America, 20 percent higher than in 2015. In 2019, more than 1300 died of this disease. In Argentina’s region of soy production, there are currently 700 cases of dengue fever with three deaths. In Paraguay, where soy production by American and Brazilian multinationals has involved the deforestation of some 325,000 hectares, an epidemic of dengue fever in 2013 infected 150,000 and claimed 252 lives.

A growing body of scientific information suggests that deforestation, apart from its specific impact on climate change, is a major contributor to the spread of dengue fever and other mosquito-borne diseases. Deforestation accelerates transmission dynamics because it not only stimulates mosquito breeding but places humans in close proximity with pathogen-carrying mosquitoes. Warming temperatures, of course, contribute further to mosquito breeding. Mosquitoes then travel to cities where they find excellent breeding grounds in pools of stagnant water or excessive water due to flooding. Urban slum dwellers become particularly vulnerable to these diseases.

The Multidimensional Impact of the Coronavirus

Despite the low levels of infection, the coronavirus represents a potentially serious threat to Latin America. The economic slowdown will exacerbate poverty by contributing to unemployment, while compromising governments’ ability to improve essential services, particularly health services. Given this context, the pre-existing health threats, linked to commodity dependence and deforestation, impact vulnerable populations (the urban and rural poor) disproportionately, rendering these populations susceptible to other infections such as the coronavirus. As noted, governments have been struggling with serious health challenges prior to the arrival of the coronavirus scare. The arrival of the coronavirus represents yet another setback in a region already experiencing an overabundance of social and economic challenges. Should the coronavirus spread significantly in the region, there will likely be political fallout as well, perhaps in the form of rising public opposition to an economic dependence that has rendered countries so socially and economically vulnerable.