Latin America Will Require Trade Development, Economic Growth and Public Policy to Move Forward

COVID-19 has impacted economies around the world, including countries in Latin America and the Caribbean. For regions where trade development and the economy were already struggling, the pandemic only exacerbated existing issues, ones that global leaders must now come together to solve.

In this panel, guests of the U.S. Chamber of Commerce and the American Chambers of Commerce in Latin America and the Caribbean (AACCLA) discuss Latin American trade development, economic growth and the path ahead.

Argentina's Economy Faced Challenges Before and During the Pandemic

Shortly before Alberto Fernández, President of the Argentine Republic, came into office in December 2019, Argentina's economy was struggling and national debt had grown to a point where it had gone into default. Although the International Money Fund's $57 billion contribution was helpful in the short term, Fernández and his administration found themselves inheriting a huge debt to pay back in a short amount of time — approximately $25 billion owed between 2020 and 2024. Additionally, many citizens were underemployed or informally employed.

To address this issue, Fernández set clear rules for private enterprise that would promote investment, job creation, product development and overall economic growth.

"In March as we were just getting off the ground, that's when we got the first case of coronavirus in Argentina," stated Fernández.

Fernández and his administration shifted their efforts to combating the pandemic, declaring a lockdown, building hospitals, and ensuring that citizens who got sick would receive sufficient healthcare.

"Trying to help the most vulnerable sectors, we didn't really bring poverty down — but what we did manage to do is [keep] another 1.2 million people from falling into poverty," said Fernández. "We kept them in the middle class and we were able to put a floor under them."

A 'Different Type of Capitalism' and Investment in Development Offer a Path Forward for Argentina's Economy

Despite the challenges the Argentine Republic has faced, Fernández remains optimistic about the future — but it will require some changes. For one, he championed a "different type of capitalism" that allows for solidarity and social cohesion.

"What we can't be at ease with is a capitalism that promotes so much concentration of wealth in so few hands," explained Fernández. "Capitalism also demands a world of consumers, and for consumers to be consumers, have to have the wherewithal to consume."

President Fernández also emphasized that Argentina has the potential to serve as a leading research hub in technology, health care and climate change. For this to be a reality, however, the country will need investors to support these developments and bolster the Argentinian economy.

"Argentina never discriminates between foreign investors and domestic investors," Fernández added.

Strengthening Latin American Trade Will Drive 'Growth With Equality'

Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean, believes that strengthening Latin American trade, specifically in Argentina, would promote "[economic] growth with equality."

The Argentine Republic would need to build bridges between the fragmented regional market, using technology to facilitate trade processes, and even branching into the North American trade region, she said. Additionally, Argentina would need to promote investment and trade in the renewable energy sector, which is currently growing in terms of foreign direct investment.

"I really believe we are ready for a major regional trade facilitation agreement," Bárcena added.

Digitalization Can Promote Inclusive and Sustainable Growth in Latin America

Currently, 40 million households in Argentina do not have digital connectivity, an issue that has greater implications in today's remote learning environment.

"We are talking about the exclusion of 32 million girls and boys that are not able to do tele-education," Bárcena stressed. "They're going to lose a year of their lives."

To combat this issue, Bárcena suggested a basic "digital basket" for all citizens that would include a cell phone, a computer or tablet, and a broadband access plan. She also emphasized the importance of increasing existing broadband speeds.

"Now we need public policies," Bárcena explained. "We need incentives. We need regulation [...] to guarantee fair development and the adoption of these technologies. The private sector will have a crucial role."