World Bank on LAC: Plan needed to save lives & limit COVID-19 impact
Created : 14 April 2020
The COVID-19 pandemic has drastically affected growth in Latin America and the Caribbean.
The World Bank believes that a coherent policy response is needed to support the most vulnerable, avert a financial crisis and protect jobs.
The most recent report from the office of the Bank’s Chief Economist for Latin America and the Caribbean said existing social protection and social assistance programmes should be rapidly scaled up and their coverage extended.
It is believed that this is necessary to help the vulnerable face the loss of earnings from the lockdown.
Humberto Lopez, the World Bank’s Acting VP for the Latin American and Caribbean region said: “We need to help people face these enormous challenges and make sure that financial markets and employers can weather the storm. That means limiting the damage and laying the groundwork for recovery as fast as possible.”
According to the report, Gross Domestic Product in Latin America and the Caribbean (excluding Venezuela) are expected to be -4.6% this year. A return to growth of 2.6% is expected in 2021.
The World Bank in a statement, said the coronavirus pandemic is fuelling a major supply shock. With demand from China and G7 countries falling dramatically, commodity exporters in South America and exporters of manufactured goods and services in Central America and the Caribbean have all been affected.
A collapse in tourism is also having a severe impact on some Caribbean countries.
The statement further stated: “Many countries in LAC are confronting the crisis with a constrained fiscal space. Higher levels of informality make it difficult to reach out to all households and protect all sources of employment. Many households live from hand to mouth and do not have the resources to cope with the lockdowns and quarantines needed to contain the spread of the pandemic. Many also depend on collapsing remittances.”
LAC Chief Economist Martin Rama said governments across the region face the enormous challenge of both protecting lives and limiting the impact of the economic fallout. He said this will require coherent and targeted policies on a scale that has rarely ever been seen before.
The World Bank said it is taking broad and fast action to help developing countries strengthen their pandemic response, increase surveillance and improve public health interventions.
Over the next 15 months, up to $160 billion in financial support will be deployed to countries cope with the COVID-19 fallout.
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