Two strategic pillars for countries during and after the pandemic

April 08 2020
Mauren esquivel

The COVID-19 pandemic crisis continues to advance, as of today April 8, there are 1,447,466 confirmed infected, 83,471 deaths, and presence in 184 countries according to what was reported by the John Hopkins University. The epicenter of the crisis has moved from Wuhan in China, to Northern Italy and today to New York in the United States, where only yesterday they had 1,700 deaths and already accumulate 5,489.

In Latin America the progress and report of COVID-19 is slow but constant, Brazil has 14,152 infected, followed by Chile with 5,546 and Ecuador with 4,450 infected. While Nicaragua with 6, Guatemala with 80 and El Salvador with 93 are the ones with the least reports of infections.

Faced with this panorama, the world is detained, in social isolation to flatten the contagion curve, and buy time for health systems so that services are not saturated and mortality is not greater; the goal is to slow the spread of a virus that is almost twice as contagious and deadly as the common flu virus.

This social isolation has led countries to put the brakes on our daily life, including our consumption, our leisure and our work, in fact, the World Labor Organization It is estimated that 81% of the world's workforce, almost 2,700 million workers, have been affected by these measures. And of that number of workers, approximately 1,250 billion, 38% of the world's employees, are employed in the sectors that are most affected by the pandemic, such as retail purchases, food services, manufacturing, and of course the tourism sector.

In other words, the pandemic is also an employment crisis today. And just as we mentioned previously, This crisis goes beyond the health aspect and affects other areas of society, such as slow economic growth, alter the international order, increases inequality in education, decreases the provision of public goods, creates conditions for social violence, magnifies the domestic violence, accentuates inequalities, among other effects.

Given these conditions, in this Great Pause As Christiana Figueres has called it, mechanisms, strategies and proposals have to be generated as soon as possible that help the countries of the region to minimize the costs of the pandemic, thinking not only about health, but also about all its effects , from the most micro, such as those related to individual behavior, such as the way of greeting so as not to infect, or the use of masks in public places; to the most macro, related to the operation of capital markets or the interventions that a tourism sector that has paralyzed and that will take time to start will require. 

But when proposing the strategies and plans to go out into the post-COVID-19 world, the opportunity must be seized to make changes that make the countries of the region stronger and more resilient, focusing on aspects related to productivity and inclusion of our countries. These two aspects should be strategic pillars in any recovery plan in the short and medium term. The first because productivity is the generator of wealth, economic growth and consequently employment; and the second, inclusion, because by making it easier for all the people and regions of a country to prosper and reach their full potential, it is easier and faster to generate progress in the countries in a sustainable way.

However, for the region it is a double challenge, since in the 100st century, although Panama and Costa Rica increased their labor productivity by 50% and 18% respectively, measured as the ratio of gross domestic product per worker. In absolute terms, the productivity of Panama and Costa Rica is 40% and 10% lower than the labor productivity of the last 1 countries that joined the OECD [4]. While for the CA20 countries, labor productivity has practically been stagnant in the last XNUMX years, this suggests that it has grown more due to the accumulation of factors than due to a better use and exploitation of them.

Source: Own calculations with World Bank data.

In the area of ​​inclusion, the region has also had a poor performance, the conditions have not been created for all members of society to access the instruments to improve their living conditions, there are gaps in access to water, basic education , higher education, health services, financial services and technologies. The latter, the technological one, must be a priority, because in a world in which human interaction is digitized, the size, dynamism and value of the internal market will depend on the connectivity of people. And in this regard, the region continues to lag behind, Costa Rica is the leader with 71.58% access, followed by Panama with 57.87%, while Guatemala has 40.70% and the rest of the countries in the region have less than 40% of internet users. The post COVID-19 world looms with high digital content and there we have a pending task.

Source: Social Progress Index 2019, ITU.

Finally, from CLACDS we will be working on scenarios and possible responses for the immediate future of the region, maintaining, as always, a structured perspective in our four areas of work, competitiveness, social progress, environmental sustainability and governance; aspects that, as we have briefly seen, will be necessary not only to get out of the pandemic, but also to accelerate the social and economic reconstruction that this global crisis has generated in our countries.

[1] Chile, Colombia, Slovakia, Slovenia, Latvia, Lithuania, Korea, Israel, Poland, and Estonia.