The executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, says that the private sector – and chambers of commerce in particular – will play a key role in the economic recovery of the region from the coronavirus (COVID-19) crisis.

In her remarks at a virtual meeting held recently, Bárcena indicated that the pandemic has revealed and amplified the region’s structural gaps, such as inequality and low productivity.

“The current crisis will be longer and deeper than expected, and because of the uncertainty that it creates, it will take several years to be able to recover. If we consider the average rate of growth of the past decade, of 1.8 per cent, regional GDP [gross domestic product] will only return to 2019 levels in 2025,” she explained.

“Chambers of commerce and business associations have played a key role during the crisis. Businesses will also have a crucial role in the recovery process. That is why we must maintain a dialogue with the private sector to increase productivity, innovation, and quality job creation,” she continued.

To cope with the effects, ECLAC made a series of proposals for the short and medium term, including an emergency basic income (equivalent to one poverty line), an anti-hunger grant (for people living in extreme poverty), and a digital basket that would allow for bridging the gap of 40 million households in the region that do not have adequate connectivity. In addition, it proposed the deepening of regional integration and international cooperation since the fiscal efforts of national governments – which have invested 4 per cent of GDP on average to date and 10 per cent in credit guarantees for companies – will not be enough.

According to her, the pandemic has also revealed the weakness of intraregional trade, which she said will collapse this year, reaching just 11 per cent — the same level seen in the 1980s.

“Globally, the pandemic is reinforcing two interrelated trends — the first is a shift towards less interdependence in production, trade and technology among the world’s major economies, particularly between the United States and Europe on the one hand, and China, on the other. The second is that world trade is less open and more influenced by geopolitical and national security considerations, with more frequent disputes and with a weakened multilateral governance,” Bárcena further added .

To this end, it is necessary to put emphasis on trade facilitation, infrastructure and logistics, and to promote investment in dynamic sectors such as renewable energy and the digital economy, she added. The harmonisation and homologation of technical capabilities is also necessary, especially in the free trade agreements already implemented in the area of the Pacific Alliance and in Central America with Mexico.

The meeting, entitled ‘Forecast on Latin America and the Caribbean’, forms part of the Annual Conference of Association of American Chambers of Commerce in Latin America and the Caribbean (AACCLA), held by AACCLA. It was led by José Luis Sánchez, chair of AACCLA, and featured special participation from the president of Argentina, Alberto Fernández.