Just as the COVID-19 pandemic has no borders, neither must the solutions to address its health and economic consequences. Deepening regional integration in Latin America and the Caribbean (LAC) is an essential part of creating collective policies to respond to the direct and indirect impacts of the emergency.
Regional integration is not an end but rather a strategic launchpad that will allow countries to effectively implement joint and coordinated policies, or both, which is essential to tackling the current situation.
In the very short term, local and regional cooperation is vital as the pandemic rages: if one country is not safe, no country is. The different integration initiatives in the region have gradually been moving toward measures to tackle the health crisis in a coordinated fashion.
Joining multilateral forces against coronavirus
For instance, Mercosur recently approved a special US$16 million fund primarily for improving the testing capacities of its member countries.
The Central American Integration System (SICA) has implemented a Regional Contingency Plan that will mobilize up to US$1.9 billion to address the health-related and economic consequences of the pandemic. This plan includes measures to coordinate efforts to prevent and contain the pandemic. It also calls for a joint mechanism for purchasing medicines and medical equipment and pushes fiscal and liquidity contingency measures.
CARICOM has also reinforced its response to the health emergency through regional teams of experts and cooperation to ensure food security.
In turn, multilateral institutions such as the Inter-American Development Bank have reacted quickly and pragmatically, supporting countries to overcome the health crisis and to shore up support systems for vulnerable sectors of the population. These organizations have also provided liquidity to keep major value chains going and safeguard jobs and helped to strengthen member countries’ fiscal position to alleviate the economic impacts of the pandemic.
Pragmatic regional integration will be crucial
Once the health crisis is over, we will inevitably face a scenario where countries, especially developed ones, will look more inward, safeguarding supplies, and turning to self-sufficiency. They will possibly operate with a higher dose of protectionism and less collaboration, at least for some time.
In this scenario, these markets will “drift away” even more, which is why smart and pragmatic regional integration is critical to face this situation.
We need to be able to implement coordinated actions that put long-term growth policies in place to accelerate the post-pandemic recovery. These policies would aim to strengthen intraregional trade, efficiently reconfigure value chains, implement an ambitious regional infrastructure plan, and ensure basic macroeconomic coordination measures are in place.
The impact of the COVID-19 pandemic will be unprecedented. Over 100,000 people have been infected with the novel coronavirus in LAC countries and over 5,000 have died, a trend that unfortunately will increase in the following weeks, generating effects of multiple dimensions.
Downturns in economic activity of the main regional trading partners suggest a sharp reduction in international trade and investment, a massive impact on tourism flows (particularly on Caribbean countries), a decrease in international remittances (hitting the countries of Central American particularly hard) and lower prices of export commodities (affecting the South American countries primarily).
These effects will be compounded by reduced domestic activity in LAC economies as a result of the lockdown policies implemented to slow the spread of the virus.
Collective action against COVID-19 is a must
Given the magnitude of these impacts, regional collective action is not an option, but a necessity. To succeed, we need unwavering political vision to take on the pressing situation at hand and forge a shared vision of the future.
Whether an integration initiative can meet its development commitments ultimately depends on whether its leaders—individuals, governments, or regional institutions—can reconcile individual visions with collective ones in pursuit of a common interest. That common interest must be to get Latin America and the Caribbean on its feet after this pandemic is over.
Strengthening regional integration must be one of the ways to overcome the difficulties of this emergency, which requires closing the borders as one of its most paradigmatic aspects. We need to look beyond our political differences and join forces against our common enemy to recover as soon as possible and get back on the path to social and economic development.
At the Institute for the Integration of Latin America and the Caribbean (INTAL), we have launched initiatives to monitor the impacts of COVID-19 on trade and integration in the region and to support countries as they take on these complex challenges. Above all, we want to help design, model, and support the process of sustained regional development in the coming decades, in partnership with those leading the sub-regional integration schemes.
We should respond to the crisis by giving the best of ourselves. We need to appeal to the creative potential of our young people. To direct the efforts of those who work on our value chains. To draw on the immense technical and intellectual wealth of our scientific communities. Our best contributions become even better when we work together. We have diversity, dreams, and ideas; we need to get more and more players to join the regional team.
In the words of Jean Monnet, one of the founding fathers of the European Union, Make men work together, show them that beyond their differences and geographical boundaries, there lies a common interest. Our task is clear.
This column was originally published in Argentina’s La Nación newspaper.