Publication

The slope of January in 2021

19 de Enero 2021
Mauren esquivel

Typically the "January slope”Is a term used to refer to that moment of the year in which the expenses incurred during the end of the year holidays are affected along with the increases in prices, rates, and rates at the beginning of each year and that affect the purchasing power of people. But in 2021 this slope may have other implications as well, especially if we consider that we come from a 2020 year affected by the COVID-19 pandemic and its respective economic and social impacts.

And at least from the events of the first two weeks of the year it is beginning to be seen that this January slope is going to be really complicated. Mainly because:

The pandemic continues, the infected and the deceased all over the world; and in fact there have been records of infected and deceased worldwide. The second wave (or third in some cases) of the pandemic has been larger than the first in most countries, affecting the health systems of cities such as London, Los Angeles and Mexico City, where they are close to hospital collapse. This growth has occurred particularly in Europe where almost 5.6 million weekly cases were averaged in late autumn; while now the dynamics of contagions has more presence in America with almost 5.5 million a week. The worrying thing is that the trends in all regions are on the upside.

In Latin America, it is Brazil (405 thousand cases a week), Colombia (129 thousand cases a week), and Mexico (100 thousand cases a week) that are feeding the number of cases; however, the trends in all countries are growing, as a result of the end of the year festivities and the breaking of protocols, particularly social distancing.

Graph 1. Evolution of positive COVID-19 cases by region

Source: Own calculations with data from the CDC of the United States government.

Graph 2. Evolution of positive cases of COVID-19 in Latin America.

Source: Own calculations with data from the CDC of the United States government.

Restrictions returned, as a result of these epidemiological dynamics and a variant of the virus that apparently has greater ease of propagation, countries have been put back in quarantine, the border closures, They are placed filters at the entrance of travelers, and the restricciones to the mobility of people that we saw in 2020. Quantitatively this is reflected in the mobility of people, where in each region there is a significant decrease in mobility, particularly in Europe where it returned to the levels of May 2020, and to date it is the region with the greatest drop in mobility of people; Today, America is the second region with the least mobility of people, although far from the levels of Europe.

In Latin America, Colombia is the country with the greatest mobility, in fact, higher than pre-pandemic levels; while Panama is the country with the least mobility in Latin America. In Central America, Nicaragua, Honduras and Guatemala are the ones with the highest mobility to date, followed by El Salvador and Costa Rica, all of them with lower levels of mobility than those seen before March 2020.

Graph 3. Mobility of people by region

Source: Own calculations with mobility data from Facebook.

Graph 4. Mobility of people by selected countries in Latin America

Source: Own calculations with mobility data from Facebook.

And although there are already countries vaccinating their most vulnerable populations, progress has been more slow than expected, and the flow of vaccines has come to a trickle. At the time of writing this text, in Latin America only Argentina, Chile, Mexico and Costa Rica have started their vaccination processes; And although most of the countries in the region plan to finish their vaccination within the first eight months of the year, the trends and experiences seen in other countries with greater resources suggest that these schedules are not realistic.

Of course, health affects the economy, and although the growth expectations published by the World Bank for the world they are positive with an economic growth of 4% worldwide and 3.7% for Latin America, it would not be surprising if these estimates were readjusted downwards according to the aforementioned epidemiological conditions, hitting even more a region that in 2020 it had a drop of -6.9% in gross domestic product and with strong increases in unemployment and poverty.

So as you can see, the first 20 days of 2021 have been very intense, in the wake of the new year we realized that COVID-19 is still among us, but that we are now in a society tired of the pandemic and its measures, with weakened economies, and worn out governments and institutions, increasing our vulnerability.

 

It seems that we are talking about economic recovery prematurely, during the eye of the COVID-19 hurricane, when the other part of the storm was still missing. Perhaps today we should focus again on continuing to adapt to the now nothing new normality, to minimize economic and social losses; adjust our measures so that neither the social contract nor our productive capacity deteriorate further, because we are going to need them to fulfill the main objective of 2021, mass vaccination.

And it is that only countries that are really robust in their social contract (transparent, inclusive, with safe environments, in contexts of low corruption, with high institutional trust, and capacity for multisectoral alliances); together with solid and resilient productive structures (strong organizational and logistical capacity, capable of innovating and adapting to circumstances, with human, economic and technical resources for rapid implementation) will be those that manage to comply with vaccination plans, a sufficient condition to really say that the pandemic ended, and a necessary condition to speak of an economic and social recovery after the tragedy.