Trade in the Caribbean and Latin America could collapse by as much as one quarter, according to the Economic Commission for Latin America and the Caribbean (ECLAC) in a report released recently on the impact of covid19.
According to ECLAC’s special study, exports will contract by 23 per cent and imports shrink by 25 per cent – all of which eclipses the fallout of the 2008 financial crisis. It also exceeds the anticipated global decline of 17 per cent.
Such projections, as well as warnings from bodies like the Caribbean Development Bank emphasising the sharp fall in tourism, highlight the challenges ahead for the region.
ECLAC’s report suggests specific vulnerabilities as a developing region. More than any other, we are susceptible given reduced shipments of manufactured goods, minerals and fuel.
“With pragmatism, we must rekindle the vision of an integrated Latin American market,” said ECLAC executive secretary Alicia Barcena. “In addition, the region must reduce costs through efficient, smooth and secure logistics.”
The need to adopt such a vision may be upon us faster than we think.
While there is a need now, more than ever, to encourage self-sufficiency and sustainable practices, with our own revenues and reserves dwindling, we simply cannot afford to adopt an isolationist approach.
“I could tell you now, if we have to go back to another lockdown such billions are not available,” the Prime Minister observed last week.
It is precisely because of such realities that a collaborative approach will be essential. There is already a long history of regional financial institutions providing strategic and stabilising assistance, including to this country.
Even if covid19 did not happen, drawing on these networks would still be somewhat inevitable in the face of the climate crisis and the impact of natural disasters of increasing frequency.
But the pandemic forces us to re-imagine not only our economic space, but also the health and social policies across borders.
An earlier ECLAC report in July, done in collaboration with the Pan American Health Organization (PAHO), suggested the only way economies of the region will be reactivated is if the curve of the contagion is immediately flattened.
To tackle that challenge, the report proposed a three-phase strategy that includes the adoption of health, economic, social and productive policies aimed at controlling and mitigating the effects of the pandemic, as well as reactivation with protection, and rebuilding in a sustainable and inclusive way.
Both the PNM and the UNC are under no illusions that the way forward will involve greater restrictions on spending. The focus should not be on only scraping the barrel in order to resuscitate the economy but also on enunciating a regional and international policy outlook with regard to collaboration and recovery.
Whoever is in power needs to look to the wider region as a resource to be drawn on. In fact, not just a resource, but an essential part of a reformulated framework of governance.
We must join hands with not only Caricom, but also our Latin American neighbours.