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The future of Latin America after covid-19
Ramón Casilda, professor of Latin American studies at the Universidad de Alcalá and Jose Antonio Ocampo, former Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC) and professor at Columbia University, along with 29 other Latin American and Spanish academics and former public officials, sign a document published by the Instituto de Iberoamérica from the Universidad de Salamanca, about the need to achieve a "Latin American Consensus" to overcome the economic and social challenges in the region following covid-19.
The forecasts of main economic organizations expect Latin America to be the hardest hit region by the covid-19 economic crisis in the developing world. According to the latest forecasts published last June by the World Bank and the International Monetary Fund, regional GDP will decrease by -7.2% and -9.4% in 2020 respectively. In addition, 30 million Latin Americans could fall below the poverty line, according to the Economic Commission for Latin America and the Caribbean (ECLAC).
The authors warn that this will be the worst recession since records began and will be accompanied by weak growth for the region in the following years, which could mean a new lost decade (2014-2024), with even worse consequences than the crisis of the 80s.
In view of this scenario, they think it is necessary to achieve a "Latin American Consensus" among the economic and social agents of the region, with a clear commitment to the Sustainable Development Goals. The consensus would comprise 18 points, among which the following stand out:
- Adopt counter-cyclical macroeconomic policies and ensure in the long term a balance between fiscal stability and GDP and employment growth.
- Encourage formal employment and occupational training. Support financial inclusion.
- Fight against inequality, expand the social protection system, increase health coverage and raise the coverage and quality of education at all levels.
- Empowerment of industry through investment in R&D, expand production and export diversification by focusing on technology and comprehensive support to SMEs.
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