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Latam resilience tested by recession, disasters and Trump


TEPIC, Mexico
Petroleumworld.com 02 07 2017

Faltering growth in many Latin American nations could aggravate the impact of disasters and other shocks on their people, warn development experts, pointing to Venezuela's crippling food shortages and the struggle to rebuild storm-hit Haiti.

Alongside clinging onto gains in lifting people out of poverty as some governments shave social spending, the region faces multiple challenges - from violent crime spurring migration from Central America, to drought in Bolivia and help for conflict-hit parts of Colombia after its recent peace deal.

“Venezuela is a crisis out of proportion to what we've seen in this hemisphere for a long, long time,” said Luisa Villegas, a senior program director with the Pan American Development Foundation (PADF).

“Venezuela is so extreme just because you have a government that won't admit there is a crisis, so it's very hard for the international community to provide aid,” she added.

A generation of Venezuelan children could suffer developmental problems stemming from poor nutrition in the country, which is plagued by soaring prices, chronic food shortages and limited access to healthcare, she said.

Efforts to strengthen people's resilience across Latin America could be hampered by weak economic growth after two years of recession against a backdrop of sliding natural resource prices.

Brazil is set to emerge from its worst-ever downturn, but 12 million are out of work in the country. The International Labour Organization has predicted unemployment will creep up to 8.4 percent this year across the region, which ranks as the world's most unequal.

“In many countries, there's not necessarily the scope to expand social programs, especially anti-poverty programs,” said Suzanne Duryea, principal economist for the Inter-American Development Bank's social division.

Those programs, which often include schemes to pay families to vaccinate their children or enrol them in school, already have “considerable coverage” in Brazil and Mexico, while Ecuador is starting to scale back cash transfers, she added.

The bank is focusing on programs that provide short-term social protection while aiming to improve the quality of health and education in the long run, she said.


Hurricane Matthew - which killed up to 1,000 people as it ripped through Haiti last October, leaving 1.4 million in need of aid - showed that better preparation for disasters remains crucial in a region prone to droughts, floods, storms and earthquakes, said experts.

“There's a very large gap... between the capacity in a country like Cuba - and even the Dominican Republic next door - and the capacities of Haiti,” said Jessica Faieta, Latin America and Caribbean director for the United Nations Development Programme.

She emphasized the need to invest in protecting people from disasters and helping communities organize themselves better to prevent loss of life.

While early warning and civil defense systems have improved significantly across the region, the work is far from finished, said Niles Holm-Nielsen, the World Bank's lead specialist for disaster risk management.

“We still see large disasters that kill a lot of people, so more progress needs to happen. It's true both in Latin America and at a global level,” he said.

Alleviating the lingering effects of a widespread drought linked to the El Nino climate pattern is another priority, said development experts. Northeast Brazil, Guatemala and other areas of Central America have been hit, with protests erupting in Bolivia which is suffering its worst drought in 25 years.


Another major problem undermining development across the region is organized crime. Rising gang violence in El Salvador, Guatemala and Honduras has made those countries the most deadly outside of a war zone, according to the U.N. refugee agency (UNHCR), which has said the region is facing a refugee crisis as hundreds of thousands flee their homes.

Economic migrants, meanwhile, face an uncertain outlook due to expected shifts in Washington's policies under U.S. President Donald Trump, which are likely to hit Mexico the hardest.

Trump has said he wants to clamp down on people illegally entering the United States from Mexico by building a controversial wall along the border – which he may fund by slapping a 20 percent import tax on goods produced in Mexico.

He could also potentially follow through on a threat to deport millions of Latin American illegal immigrants living in the United States. And many struggling families could be hit if Trump blocks remittances from migrant workers there, which totaled $27 billion last year to Mexico alone, according to bank BBVA Bancomer.

Amid the pressures of the past two years, in which the trend of Latin Americans escaping poverty to the middle class tailed off, the risk now is that more people will start sliding back down the ladder.

“The challenge is to make sure those gains from the last decade are still maintained and people don't go back into poverty,” said PADF's Villegas.

Reporting by Sophie Hares; editing by Megan Rowling from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women's rights, trafficking and property rights. Visit news.trust.org

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