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HomeNewsCaribbean NewsThe political fallout of COVID-19 in Brazil, Mexico and Columbia

The political fallout of COVID-19 in Brazil, Mexico and Columbia

By John Price

On Thursday, May 21, our firm conducted its sixth COVID themed webinar, this time looking ahead to the anticipated political fallout of the pandemic in Latin America’s three largest markets, representing roughly 80 percent of regional GDP.

Our take-away at AMI is that no country in Latin America has developed an optimal set of policies to deal with COVID. Unlike the US, EU and China, Latin American countries cannot print endless money without generating inflation and devaluation (remember the 1980s?).

Furthermore, with few exceptions (Peru and Chile), Latin American countries cannot assume massive deficit spending without destroying their international debt ratings and raising the cost of financing. Where there is some slack is to use foreign reserves on domestic programs but again, international lenders frown upon this. Latin American countries cannot expect wide dispersion of a vaccine before 2022 for let’s face it, industrialized countries will clamor for and outbid the rest of the world on the first billion+ vaccines that are sold. Therefore, Latin America needs to learn how to co-exist with COVID-19.

That means 1) expanding ICU and ventilator capacity and making it mobile to move from one hot spot to the next. 2) Massively investing in testing and tracing. 3) Isolating the elderly and vulnerable in under-utilized hotels. 4) Opening up schools both traditional and online. 5) Opening up the economy with social distancing rules so there is a tax base to pay for all of these measures. It will be a challenging few years ahead.

Below you can view the video.

Posted May 25, 2020  In Coronavirus Resources

John Price is the Managing Director of Americas Market Intelligence. With 20 years of experience in Latin American market intelligence consulting, John has supervised nearly 1,200 client engagements and advises clients in more than 20 countries across Latin America. John’s areas of focus for AMI Perspectiva include Latin America’s natural resources, logistics and industrial products industries.

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