| bibo:abstract |
I. The COVID-19 Pandemic and Latin America and the Caribbean’s Challenges
Ⅱ. The Diplomatic Rivalry between the U.S. and China in Latin America and the Caribbean
Ⅲ. The Responses of Latin American and Caribbean Countries
Ⅳ. Policy Recommendations
I. The COVID-19 Pandemic and Latin America and the Caribbean’s Challenges
With the COVID-19 pandemic affecting all areas of Latin America and the Caribbean and causing unprecedented economic and social crises, governments in the region are facing challenges in addressing health and humanitarian crises as well as economic, social, and political crises.
1. Health and Humanitarian Crises
23 percent of the world’s confirmed cases and 31 percent of the deaths are concentrated in Latin America and the Caribbean. Brazil, Argentina, and Colombia are among 10 countries with the largest number of confirmed Covid-19 cases. Brazil, Mexico, and Peru are among 10 countries with the largest number of deaths associated with COVID-19. Peru, in particular, has the highest death rate per population as of November 10, 2020.
In the early stages of the pandemic, all Latin American and Caribbean countries, except for Mexico and Brazil, imposed a mandatory quarantine to stop the virus from entering the region further. And some countries - Argentina, Costa Rica, and Paraguay, seemed to be succeeding in controlling the spread of COVID-19. However, while quarantine was not implemented properly due to economic reasons - widespread poverty, massive informal sectors , and lack of electricity and sanitation facilities in urban slums, such control measures could not last long enough in the face of worsening economic crisis. As COVID-19 has brought public discontent and problems regarding public health services that existed prior to the pandemic to the surface, it is forecast that governments around the world will focus on healthcare policies with public demand for a more inclusive and efficient healthcare system exerting political pressure.
2. Economic, Social, and Political Crises
The International Monetary Fund (IMF) forecast negative growth for Latin American and Caribbean economies (-8.1%). And the U.N. Economic Commission (ECLAC) also forecast that the region’s economies will show negative growth rate (-9.1%) in 2020. The ECLAC anticipated that the region’s unemployment rate will grow from 8.5% to 13.5%, the poverty rate will grow from 30% to 37.3%, and the extreme poverty rate will grow from 11% to 15.5%.
Therefore, if outsiders and populists appear in Ecuador, Peru, Chile, Nicaragua, Honduras, and Mexico, where parliamentary midterm elections are held in the run-up to the 2021 presidential elections, criticizing corruption and incompetence of the incumbent governments, there is a high possibility of political polarization and social division.
Ⅱ. The Diplomatic Rivalry between the U.S. and China in Latin America and the Caribbean
The U.S. and China seem to view the crisis that Latin American and Caribbean countries are facing against the COVID-19 pandemic as strategic opportunities to expand their influence in the region, and are actively competing with each of their “diplomacy in the pandemic”to secure the alliance and strengthen solidarity.
In the early days of the pandemic, the U.S. stopped supporting the Pan-American Health Organization (PAHO) and took priority measures, which resulted in its leadership vacuum in the region, and tarnishing its image as a provider of public goods in the region. The U.S. provided cash assistance to Latin America in response to the pandemic.
In contrast, China moved fast and actively donated “anti-epidemic products”to the central governments and private companies as soon as the first confirmed case was reported in the region. In particular, China used the provision of such aid politically by concentrating 60 percent of donations going to the region on Venezuela, Brazil, and Chile while not supporting the countries without diplomatic ties with China.
Ⅲ. The Responses of Latin American and Caribbean Countries
The biggest challenge Latin America and the Caribbean are facing is finding ways to strengthen their health capacity to cope with the COVID-19 pandemic, and restoring the economy. So, they are trying to make the most out of the U.S.-China rivalry.
With foreign direct investment (FDI) decreasing from the U.S., traditional U.S. allies such as Colombia and Mexico, which have been away from China in the past, have begun to strengthen their economic ties with China.
As the U.S. is rolling out development programs called “Growth in the Americas”or “America Crece” with the goal of deterring China’s Belt and Road Initiative (BRI), Latin American and Caribbean countries, which regard infrastructure building as their top priority for economic development, will likely seek to make the most out of the U.S.-China rivalry.
Meanwhile, Latin American and Caribbean countries have been showing gratitude for China’s “mask diplomacy.”This can be understood as their diplomatic strategies to obtain all kinds of support in the combat against the pandemic. During the COVID-19 era, who will seize the upper hand in the U.S.-China rivalry in the region will likely be determined by vaccine distribution.
Ⅳ. Policy Recommendations
It appears that support from both the Korean government and private sector is needed for Latin American and Caribbean countries, which were severely affected by COVID-19. In particular, health and digital cooperation need to be strengthened to help countries in the region recover from the impact of COVID-19. It also seems necessary to diversify areas of cooperation in the coming years.
Due to the COVID-19 pandemic, global economic exchanges significantly shrank, raising the need for the nearshoring of global supply chains. It is anticipated that the U.S. will be pushing for a nearshoring policy in Latin America and the Caribbean to keep China in check and boost the sluggish domestic economy. It should be noted that this could be great opportunities for South Korean companies in the region.
With its relatively sound public health and medical systems, mature civic awareness, and differentiated capabilities in the era of digital transformation, Korea needs to strengthen soft power in formulating and implementing its policy toward Latin America and the Caribbean. It is also recommended that the Korean government show off its role as a responsible middle power in crisis situations. The Korean government and companies’efforts to share experience and expertise in fighting COVID-19 in the region have been overshadowed by China’s aggressive “mask diplomacy.”Therefore, it is advised that the Korean government shore up efforts at implementing more aggressive and differentiated approaches.
Last but not least, it is recommended that the Korean government share its case of the “Korean New Deal”with governments in Latin America and the Caribbean for the region’s recovery from the current pandemic and sustainable economic growth in the face of structural changes such as rapid digital transformation and climate change even after the pandemic.
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