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BIPR | Prospects for Post-COVID Economic Growth in Latin America
Prospects for Post-COVID Economic Growth in Latin America

April 11, 2022 - 18:30

Filipe Campante - Jacqueline Mazza - Alessandro Merli - Guido Sandleris

Event Recap

Professor Alessandro Merli begins the discussion by framing the primary short-term issues in Latin America. In particular, Merli notes that the region has often been referred to as the "Forgotten Continent," as it is not often discussed in the policy realm, especially since the developed world has been hit by its own crises (such as the global financial crisis and the euro crisis). Despite this, he explains that attention should be paid to the ways in which Latin American countries politically and economically respond to the Covid pandemic and other world events. This is particularly relevant after the Russian invasion of Ukraine, as many of them are commodity exporters in a phase of scarcity and skyrocketing commodity prices.

The discussion begins with Professor Jacqueline Mazza, who introduced the Latin American political context. She first observes that it is difficult to survey or examine the unpredictable nature of Latin American politics. Mazza starts by noting that even before COVID, Latin America was experiencing a wave of mass social protest movements that swept through Latin America in the fall of 2019, often sparked by inequality and price rises affecting the poor. With the outbreak of the pandemic in spring 2020, these movements largely dissipated and were replaced with political controversies surrounding Covid-19. Interestingly, Mazza notes that the ruling parties of those countries that had particularly poor management of Covid, such as Brazil or Mexico, did not suffer poor political outcomes during the pandemic. Likewise, the ruling parties of countries that did have appropriate responses, such as Chile and Peru, suffered in subsequent elections with swings to the left. She concludes her remarks with two broad elements that will continue to affect politics in the region after the pandemic: high levels of social and economic inequality and distrust of "establishment" political parties.

The conversation then moves to Professor Guido Sandleris, who surveys the economic conditions in Latin America. He notes that post-Covid economic recovery has been defined by divergent growth rates. That is, some Latin American countries have experienced strong growth while others have lagged behind their peers. In general, though, he notes that the region has rebounded with strong growth. Another defining feature of Latin American economic recovery has been higher inflation spurred in large part by the expansionary fiscal and monetary policies pursued during the COVID crises and disrupted supply chains. He signaled that the war in Ukraine has mixed effects in the region. A more subdue world growth rate is negative, but higher commodity prices is a positive for the large commodity exporters in the region.

Professor Filipe Campante ends the discussion with a specific look at Brazil. He examines the political and economic nexus in the country over the course of the pandemic. Specifically, he looks at the political support of President Bolsonaro over the course of the pandemic. His management of the pandemic was defined by high death rates but a quick fiscal response, largely due to congressional action. Thus, despite President Bolsonaro's initial low approval ratings due to the pandemic response, the ups-and-downs of the government's fiscal payments to its population help explain the patterns of his political support. These dynamics are particularly important in upcoming elections. In the short term, Campante noted that real economic policy would be difficult to manage in the face of political gridlock.

The panel concludes the discussion with brief concluding comments on the political and economic issues that the region faces in the short and long terms. The panelists also engage with the audience with a short question and answer section.

Full Audio:

Prospects for Post-COVID Economic Growth in Latin America
Latin American Studies Series

hosted by Professor Michael G. Plummer

Filipe Campante
Johns Hopkins University SAIS, US
Jacqueline Mazza
Johns Hopkins University SAIS, US
Alessandro Merli
Chair: Johns Hopkins University SAIS Europe, Italy
Guido Sandleris
Johns Hopkins SAIS Europe; Universidad Torcuato Di Tella, Argentina

The event will be held in hybrid mode. SAIS Europe students, faculty, and staff are allowed to attend in person in the Penthouse. External guests are welcome to participate by registering for the online webinar using the link below.
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