Latin America at Covid crisis point

Ruth Green, IBA Multimedia JournalistWednesday 22 September 2021

A market seller wears a mask to protect against Covid-19 in Cusco, Peru. Shutterstock.com/Lidiya Ribakova

The pandemic has hit Latin America’s faltering democracies and failing economies hard. Global Insight assesses the staggering toll Covid-19 has taken on the region.

The Covid-19 death toll in Latin America and the Caribbean is stunning. More than one million people have died there since the onset of the pandemic, making it the world’s worst-hit region.

Much of the international focus on the region’s battle against the virus has centred on Brazil, which accounts for more than half of Latin America’s fatalities, and where management of the crisis has been highly politicised.

As countries continue to be hit by new waves and variants, it’s clear that what started as a public health crisis has descended into a full-scale economic, social and political crisis that risks pushing communities across the region to the brink.

In July, the Economic Commission for Latin America and the Caribbean (ECLAC) revealed that the region’s economy contracted by 6.8 per cent last year – its worst recession for 120 years. The gravity of the economic situation is clear, but it almost pales in comparison to the enormity of the structural and social challenges facing the area.

The pandemic was not the root of these problems, but it came at the worst possible time for many countries already grappling with gaping economic and social inequalities. A super-cycle of elections, combined with decades of inequality, lacklustre economic policies and endemic corruption sparked civil unrest across Latin America throughout 2019. By the time the first cases of Covid-19 were recorded in Brazil in late February 2020, democratic fatigue and public discontent with governments had already reached crisis point (See box – Democracy at a tipping point).

From the outset, many countries struggled to establish an effective public health strategy to contain the spread of the virus. This was largely hampered by government indecision on lockdown and quarantine restrictions, and in cases like Brazil, their initial denial of the virus. When countries implemented lockdown, some, like Mexico, were criticised for doing too little too late and for ending restrictions prematurely.

Such approaches have cost the region dearly, says Juan Carlos Rocha, Co-Chair of the IBA Latin American Regional Forum and a partner at Philippi, Prietocarrizosa, Ferrero DU & Uria in Bogotá. ‘The decisions and, above all, the attitudes taken by Latin American governments did have an impact on the severity of the crisis’, says Rocha. ‘The governments that made decisions that did not align with the World Health Organization and core scientific recommendations experienced serious sanitary crises that ultimately forced them to impose, at least, limited lockdowns.’

The effectiveness of lockdowns in countries such as Colombia and Peru were hampered by socio-economic factors. ‘It is no coincidence that the highest levels of contagion and mortality from Covid-19 occur in people from the lower socio-economic strata’, says Diana Guarnizo, a lawyer at Dejusticia, which works to strengthen the rule of law and promote human rights in Colombia. ‘While some people could stay at home comfortably and telecommute or transport themselves on foot or by car, others had to risk going out on the street and using public transport in order to survive.’

Peru resorted to strict lockdown measures early on, but similarly the country’s largely informal, lower-class workforce had no choice but to go out to work. The virus spread like wildfire and the country now has the highest Covid-19 death rate per capita worldwide.

Many of Latin America’s most profitable industries, including tourism, came to a complete standstill in 2020. In June, the United Nations Conference on Trade and Development reported that foreign direct investment (FDI) across the 33 economies plummeted 45 per cent in 2020, marking the sharpest FDI decline among all developing countries during the pandemic to date.

Argentina’s strict lockdown was the nail in the coffin for the ailing economy, which was already on course to enter its second sovereign default in 20 years when the pandemic struck. ‘Stringent lockdown and social distancing measures were unfortunately unable to curb the spread of infections and the resulting death toll’, says Francisco Roggero, Vice Chair of the IBA Latin American Regional Forum and a partner at Zang Bergel & Viñes Abogados in Buenos Aires. ‘Combined with the economic crisis that started in 2018, they worsened the situation of millions in the country and exacerbated widespread inequality.’

Venezuela, meanwhile, was already crippled by hyperinflation and chronic shortages of water, food and medical supplies. This, combined with the ongoing bitter power struggle between the government of President Nicolás Maduro and opposition leader Juan Guaidó, has forced around 5.5 million civilians to flee the country since 2015.

Fernando Peláez-Pier, former IBA President and a senior consultant at FPeláez Consulting, says the pandemic has exacerbated the situation immeasurably. ‘Venezuela is still mired in an economic-political crisis’, he says. ‘The pandemic has made the situation much worse still compared to other countries in the region. The mass exodus of Venezuelans continues and the Venezuelan diaspora continues to increase around the world. Unfortunately, we do not see – and I personally do not see – a way out of this crisis in the short term.’

Rights at risk

While no country appears to have escaped the economic and social consequences of the pandemic, the true extent of its impact on human rights and civil liberties in Latin America is still being determined, says Professor Juan Méndez, the former UN Special Rapporteur on torture and other cruel, inhuman and degrading treatment or punishment.

‘Some states have made efforts not to let the pandemic become yet another occasion for the abandonment and neglect of people who are deprived of liberty’, he says. ‘But this doesn’t seem to have been enough. We still don’t know the dimension of how the pandemic has affected the health and safety of people deprived of liberty, because by and large states don’t publish much data about that. The anecdotal information that we have is really concerning. I think we’re already seeing pretty tragic consequences of this.’

It's clear already that existing disparities have only widened across the region, says Catalina Botero Marino, a founding partner at Dejusticia and former Special Rapporteur for freedom of expression for the Organization of American States’ Inter-American Commission on Human Rights. ‘Lower income children without access to internet or computers have been isolated for more than a year, dramatically delaying their educational process’, says Botero Marino, who is also a member of the IBA’s Human Rights Institute Council.

She says the rights of indigenous people, which accounts for around eight per cent of Latin America’s population, are also increasingly at risk. ‘Indigenous sectors or poor rural populations have not only suffered devastating health consequences, but have also seen their minimum vital sustenance affected, as well as their access to basic rights such as the right to the administration of justice, to health or to work’, she says. ‘As Rodrigo Uprimny, member of the UN Committee on Economic, Social and Cultural Rights, pointed out, humanity's reaction to the pandemic showed the success of science and the failure of ethics.’

There’s also growing evidence of the adverse impact of the pandemic on lesbian, gay, bisexual, transgender and intersex (LGBTI) rights across the region. ‘It's been demonstrated that especially young LGBTI people have been struggling with being at home for so long in all these countries because they have parents that don't accept their sexual orientation’, says Andrés Jaramillo-Mejía, Website and Newsletter Officer of the IBA LGBTI Law Committee and Business Development and Marketing Manager at Greenberg Traurig.

Although Jaramillo is aware of instances where lockdowns have enabled some families to have more open and frank conversations about their sexuality, he says there are serious concerns for the well-being of many in the LGBTI community, particularly in the region’s most conservative countries. ‘Many people haven't been able to socialise and meet with friends and we’ve heard reports that this has led to psychological, and in some cases, physical abuse.’

Sao Paulo, Brazil, June 2020: People wait to receive food donations for lunch in a downtown street during the severe economic crisis caused by the Covid-19 pandemic. Nelson Antoine/Shutterstock.com

Jaramillo says the rise of gender-based lockdown rules in countries such as Colombia, Panama and Peru has also put even greater strain on LGBTI and other non-traditional families. ‘Schools and universities have been opening and closing and opening and closing and this has already had a huge impact on the family structure and the capacity for parents to work from home’, he says. ‘These gender-based lockdown rules will have had a huge impact on non-traditional families – LGBTI parents, single parents and so on – if they needed something urgently or needed to see a doctor. I imagine there are exceptions, but you still have to demonstrate why you are exempt and that could put even more pressure on someone that is already struggling.’

Vaccine inequity and diplomacy

As in so many parts of the world, the crisis has exposed the extent to which underfunded and overwhelmed health systems and inadequate social protection mechanisms have left so many Latin American countries ill-prepared to combat the myriad of challenges posed by Covid-19.

Vaccine supplies across the region, even in urbanised areas, have been woefully inadequate and underline the dearth in local production and distribution capabilities. In June, G7 leaders pledged to donate one billion doses of Covid-19 vaccines to developing countries. However, Guarnizo says this is a drop in the ocean as far as demand in Latin America is concerned and does little to alleviate the inherent logistical and infrastructure challenges in the region. ‘Without a local pharmaceutical industry to advance vaccine research and production, we are completely dependent on industries in high-income countries to ensure access to them’, she says. ‘The only way to ensure that vaccine production and distribution is managed equitably around the globe is by creating new production centres in regions where they don’t currently exist.’

In May 2020, the erstwhile US President Trump invoked the Defense Production Act (DPA) to boost domestic production of essential supplies, including vaccines, in response to the pandemic. Although not a formal export ban on US-produced vaccines or related components, the use of the Cold War-era law might as well have been as it compelled private US companies to fulfil domestic contracts ahead of other orders.

This subjected many Latin American countries without their own vaccine manufacturing capacity – virtually the entire region – to lengthy delays in receiving doses. This spurred a rise in what Peláez-Pier terms ‘vaccine tourism’, which has seen thousands of affluent Latin Americans travel to the US for vaccinations, only serving to exacerbate further vaccine inequity across the region. Some turned to alternative jurisdictions, namely China, India and Russia, where vaccines have been developed under much less regulatory scrutiny.

The vaccine crisis has also laid bare the region’s enduring systemic challenge: corruption. In Brazil, a vaccine-buying scandal involving Indian-developed vaccine Covaxin and the government’s broader mishandling of the pandemic triggered a parliamentary inquiry and sparked mass protests. Guatemala’s government has been heavily criticised for purchasing eight million doses of Russia’s Sputnik V vaccine at inflated prices. After the vast majority of these doses failed to materialise, the government was forced to renegotiate the contract and called on other nations to help the country’s vaccination drive. The US donated 4.5 million vaccine doses to the country in July.

These cases illustrate the trickle-down effect of corruption on society, says Claudia Escobar, a former magistrate of the Court of Appeals of Guatemala and visiting professor at the Terrorism, Transnational Crime and Corruption Center at George Mason University. ‘Sometimes you don't see the effects on your daily life and that’s a big problem, especially when you have to deal with judicial corruption’, she says. Escobar should know, as lead whistleblower in a case of grand corruption that exposed illegal interference in Guatemala’s judiciary by high-ranking political officials, including the country’s vice-president and the former president of congress. ‘You think that this doesn't affect you, that this does not affect your family, but corruption affects everybody. If there is corruption, you won't have a good health system. That’s what we’ve seen happening during the pandemic.’

In February 2021, President Biden invoked the DPA again, this time to speed up the US’ domestic vaccination timeline. Méndez says the ‘America First’ strategy is understandable to a certain degree, but that it created a de facto prohibition on US vaccine exports that has had damaging and far-reaching consequences. ‘One can understand it in terms of making sure that the supplies are there for your own country,’ he says, ‘but it’s still an indignity to have a global community that goes back to these forms of selfishness as soon as we have a threat like a pandemic.’

Government ineptitude has marred the vaccination prospects for civilians in countries like Venezuela, where vaccination rates remain one of the lowest in the region. As countries in Latin America and across the world continue to struggle with variants, Méndez says more international cooperation is sorely needed. ‘It is already happening of course and I’m conscious of the fact that some countries have donated doses to other countries, but I don’t think it has happened at the level at which we have needed’, he says. ‘Countries cannot protect themselves forever if they also don’t cooperate with others to beat the pandemic everywhere. In today’s world, there will always be transmission, one way or another.’

Horacio Bernardes Neto, former IBA President and senior partner at Motta Fernandes Advogados in São Paulo agrees that nations must work together. ‘There must be a movement to fight it all over the world, otherwise nobody will ever be safe’, he says. ‘I think that many things will be changed everywhere. Normality for the next couple of years is going to be very difficult.’

A temporary waiver on patents and other intellectual property for Covid-19 vaccines could be one approach to addressing the chronic vaccine shortage, says Guarnizo. ‘The waiver would help eliminate the monopoly of production that is currently concentrated in a small group of companies, allowing other companies to access the "recipe" for its manufacture’, she says. ‘There are many companies from both high- and middle-income countries that could be involved in the production of certain vaccines, particularly those of less advanced technology, but do not do so for fear of legal sanctions.’

In May, President Biden bowed to international pressure and came out in support of lifting intellectual property rights for Covid-19 vaccines. IBA President Sternford Moyo said the move ‘bodes well for true cooperation between countries and the monolithic pharmaceutical companies that will be necessary at many stages’.

Glimmers of hope

As well as receiving vaccine donations from abroad, there are also some promising signs of collaboration and development within the region. ‘Since about a year ago, there is a joint effort between Mexico and Argentina to produce the AstraZeneca vaccine for distribution throughout Latin America in an effort to allow more timely and efficient access for all countries in the region’, says José Visoso, Membership Officer of the Latin American Regional Forum and a partner at Galicia Abogados in Mexico City.

In early July, Cuba’s drug regulator approved its home-grown vaccine Abdala, while the Butanvac vaccine, developed by the Butantan Institute in São Paulo, has already been authorised for use in clinical trials. Argentina is also making considerable inroads in this area, says Roggero. ‘Recently, an Argentine laboratory produced the Sputnik V vaccines in collaboration with Russia, while the active ingredient for the AstraZeneca-Oxford vaccine is also being produced locally,’ he says. ‘Expectations for regional cooperation in this respect are high.’

Successful vaccination programmes in other jurisdictions are already reaping considerable results. Estif Aparicio, Co-Chair of the IBA Latin American Regional Forum and a partner at Arias, Fábrega & Fábrega in Panama City, points to Uruguay. The country has the region’s highest vaccination rate, which he says proved instrumental in helping ‘them to curb the late wave of infections that they experienced earlier in 2021’.

Chile is another success story, he says. ‘While Chile experienced difficulties before the arrival of the vaccines, during the vaccination stage of the pandemic Chile quickly positioned itself as one of the countries in the world with a higher level of vaccination among its population, having secured doses from different sources’, says Aparicio. Although more recently Chile contended with a severe wave of infections, he says the situation has been steadily improving.

Costa Rica, as one of the region’s most stable democracies, was perhaps better placed than most to handle the crisis, says Adriana Castro, Young Lawyers' Initiatives Officer of the IBA Latin American Regional Forum and a partner at BLP Abogados in San José. ‘I believe that our strong institutions and the fact that our health minister was an epidemiologist, have helped our country palliate the effects of the health crisis with some degree of success as compared to other countries’, she says. ‘We have one of the lowest death rates in the world, we have not seen a collapse of the healthcare system and we were one of the first nations to start vaccination, relying only on Pfizer and AstraZeneca.’

Challenges ahead

Rocha says it’s clear the region will need much more international support – both medical and financial lifelines – to help it emerge from the pandemic. ‘As the vaccination phase of the pandemic has started unevenly within the region with mixed results and the level of development and resources vary widely among the countries, Latin America definitively needs as much as help possible to get the weakened economies of the countries back on track as soon as possible’, he says. ‘That said, the light at the end of the tunnel on the sanitary side will soon encounter a longer tunnel of economic recovery. The fact that most sovereigns in the region will end up losing their investment grade status and inherit high debt-to-GDP ratios, places an enormous challenge in terms of how to finance the high bill of the economic recovery.’

It will also be increasingly difficult for governments to continue using the pandemic as an excuse for their failings, says Aparicio. ‘In the not-so distant future, governments may no longer have the luxury of blaming the pandemic for their own shortcomings’, he says. ‘This may, unfortunately, lead to the never-ending Latin America chimera of selecting populist leaders, from the right or left side of the political spectrum, that promise the impossible and that, in some cases, ultimately attempt to perpetuate themselves in power as opposed to choosing leaders that pursue the longer, but more sustainable path, of rule of law and the strengthening of the democratic institutions.’

Social movements in Colombia and Cuba are just two indications of the degree of anti-government sentiment felt across the region. There are signs some governments are listening though. In July, Chilean legislators started drafting a new constitution, partially in response to the Estallido Social – the country-wide demonstrations that engulfed the country in 2019 over longstanding grievances including the cost of living, privatisation, inequality and rampant corruption. A new 155-member Constituent Assembly is now tasked with rewriting the constitution, which was written in the 1980s under the dictatorship of Augusto Pinochet, and will mark a new chapter for the country.

In Costa Rica, the Cochinilla investigation into a widespread bribery scandal in the infrastructure sector is testing the country’s capacity and willingness to tackle corruption head on. Indications of increased levels of corruption across Latin America throughout the pandemic only serve to highlight the need for better governance and stronger institutions, says Jonathan Menkos, Executive Director at the Central American Institute of Fiscal Studies in Guatemala City. ‘If we do not resolve this push towards democratic destruction, it will be extremely difficult for us to resolve economic or welfare paths later’, he says. ‘The biggest concern lies with those who govern us. It is not vaccination, it is not equality, it is not the fight against poverty, it is State Capture that operates its paths of corruption and maintains impunity. That is a reality that is ugly to admit, but it is true.’

Ruth Green is Multimedia Journalist at the IBA and can be contacted at ruth.green@int-bar.org