By Stephanos Christodoulou
Your commercial awareness dose
The whole world has been a victim of the pandemic called Covid-19. It has not only taken away the lives of so many people since the beginning of this year but also has a tragic impact on many other sectors of different nations. The global economy couldn’t be unaffected.
The workers in Latin America are forced in a locked down as they must stay in their homes and the production of many goods and services is stopped. The household expenses are lessened, resulting in a lesser profit of the market. The borders are not open for tourism and the Latin American countries like Cuba, which earn approximately 20% of their economic benefits from tourism are facing a significant economic threat. The exports are also to the minimum which worsens the economic conditions.
The first cases of this disease were found in Brazil at the beginning of February 2020, which kept spreading exponentially. In such a critical situation, the Brazilian Government had to shut down businesses temporarily that were accepted by this tremendous economic crisis. Many people lost their job and others were forced to shut down their enterprises which on a larger scale this led to greater problems.
People are encouraged to work from home however, this is not as easy as it seems for some countries. The increase of the online traffic creates broadband speed issues. The three major economies of Latin America – Brazil, Mexico and Argentina have been affected drastically. According to a survey, as a result of this crisis the Brazilian economy has fallen by 9.1% this year due to the closure of markets, tourism and lesser exports.
The Brazilian parliament is in the process to enact various policies and investments in order to make its economy better. They have agreed to invest in public health and sanitisation services as well as in the food and beverage industry which will be beneficial in the fight against the global pandemic. Moreover, the Central Bank of Brazil has also put away a handsome amount of funds for dealing with emergency situations and for providing aid to the small businesses which will eventually result in economic betterment.
The Mexican economy is not doing better! Their bad situation was also influenced by the fact that Mexico was already facing a recession. The crisis in the region seems similar of the 1990 crisis which caused many problems forcing the people to migrate abroad. Many economic forecasters have predicted that almost 2.2 million Mexicans will leave under poverty this year and the GDP has decreased by 6.6 per cent.
Moreover, most of the businesses in Mexico are run entirely by the people without any kind of aid from the Government. The Government has no policies to make their businesses better or nor has the intention to invest in them in any sort of way leaving them helpless.
Argentina was a victim of economic recession and inflation just like Mexico. Therefore, its economy has been drastically affected by the widespread of Covid19. The inflation in Argentina had already reached 53.8 per cent last year, which was awful for the people a the household items, food, and other basic necessities were already inaccessible due to the high prices. The majority of the population in Argentina were already living from hand to mouth, and the pandemic has made their situation even worse!
However, the government started to realise the impact of this and some policies are in the process to help the locals, such as increasing pensions and wages for people with families. It is worth noting that this does not solve the actual problem, which is the downfall of the economy. The country defaulted on its foreign debt for the ninth time in the history in 2020. On the other hand, Argentina successfully achieved to restructure nearly of its $65bn debt with private creditors, which is regarded as “a major milestone that will enable the country to put an end to its ninth sovereign debt default”, according to FT.
To conclude, Latin America has been heavily impacted by this crisis because of the lockdown and shut down of many businesses. The economy is facing a recession, and the GDP is decreased drastically. However, the region can improve when the respective governments invest in things which are actually needed by the people or will help them overcome the obstacles such as sanitisation services and in technology advancement. This will enable people to work from home safely, efficiently and effectively which plays its part in making the economy better during these days.
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