Geographically, more firms in China have prospered and outperformed those in the US during the pandemic. The victors are all beneficiaries of COVID-19. Sea Group, South-east Asia’s most valuable company, showed Covid-19 resistance in all three of its core businesses: gaming, ecommerce and digital payments. Pinduoduo was turbocharged as hundreds of millions of Chinese shoppers turned to their smartphones rather than malls. Xinghuacun Fen Wine Factory experienced a 50% jump in revenue. San Francisco-based Twilio’s application programming interfaces, or APIs, that plug into computer code behind popular apps such as Instacart and Uber, allowing them to communicate with customers through text and voice, experienced a 51% spike in revenue.
Anhui Zhifei Longcom Biopharmaceutical a subsidiary of Chongqing Zhifei Biological developed a vaccine in collaboration with the state-run think-tank the Chinese Academy of Sciences by using part of a protein on the outside of the virus that causes the disease to prime the immune system. Chongqing Zhifei experienced a 211% surge in market value.
MercadoLibre or “free market” is now the largest company in Latin America. It is worth $83bn on the Nasdaq and is the answer to Alibaba. LONGi Green Energy, the world’s largest producer of silicon solar wafers, had a strong 2020. Under Beijing’s drive to ensure all software used in critical infrastructure is “autonomous and controllable”, Kingsoft is the default provider for government offices, state-owned enterprises and banks. Not Google. Not Microsoft.
This abridged list compels those stroking the darkness ahead to ask — Can a colonial ecology of schooling liberate our children to find their places in the post-modern world under construction now? The controversial and enigmatic Nobel laureate V. S. Naipaul in “A Bend in the River”, reminds us that “The world is what it is; men who are nothing, who allow themselves to become nothing, have no place in it.” ― Nothing is clearer or more truthful. The causes of inequality are always ideological and political. In “ownership societies”, the elites always naturalize inequality. Educational justice must be verifiable. Disadvantaged children must benefit from larger educational investment. We are not equal. They must be given more. When we treat the unequal equally, we only increase inequality.
In Latin America and the Caribbean (LAC), comparatively more people work in activities that require close physical proximity in occupations at cafés and retail stores. Even fewer yet are working in the knowledge economy and are therefore less likely to work remotely. These two economic contours have contributed to the comparatively larger economic impact of COVID-19. In LAC countries, about 45% of jobs are in contact-intensive sectors, compared to just over 30% for emerging economies. This means that only about one in five jobs can be done remotely, half the share of flat world economies and below the emerging world average (26%). Additionally, a high degree of informality and poverty, combined with lower trade and financial instability caused by the Coronavirus, have contributed to a strong fall that can only be followed by a creeping recovery.
Alongside the urgency for viable vaccines is the pressing need for a battery of financial regulations and legislation to address financial stability risks. Debt restructuring will be critical to recover the financial health of viable firms. For unviable ones, an efficient and equitable bankruptcy framework that distributes burdens among investors, creditors, owners, workers, and the government is needed immediately.
The growth dynamic in 2021 is subject to great uncertainty linked to the risk of variants, the agility with which immunizations can be distributed, and the capacity to manage and maintain fiscal and monetary stimulus to support aggregate demand and productive sectors. Among LAC states, the weaknesses and structural gaps, a narrow fiscal space, inequality, restricted coverage and no access to social safety nets like Medicare-for-all, elevated labour informality, productive heterogeneity and low productivity are core to understanding the extent of the pandemic’s effects, the difficulties in implementing policies to mitigate the effects, and the challenges in unpacking a sustainable and inclusive economic reactivation roadmap.
Jair Bolsonaro spent lavishly last year on emergency aid for the poor. This boosted his popularity but increased the country’s budget deficit. With debt already exceeding 90 % of GDP and the highest total debt of any emerging market outside China, Brazil faces an unpleasant choice: shun stimulus and stunt the recovery or keep spending and risk a mutiny by investors. In Mexico, investors’ worries are about parsimony rather than profligacy. President Andrés Manuel López Obrador has refused to allow unrestrained spending. The result is a recession with a fall in GDP of about 9 % that left Mexico with a far smaller budget deficit to finance.
LAC countries are among the world’s worst-hit by the virus and they face an agonizing recovery path, with mounting risk that can exacerbate poverty and inequality, triggering political upheavals. By the end of 2021, the region’s output will remain at 4.8 % below its pre-pandemic level, the worst performance in the world, according to IMF forecasts. Head of the World Bank for Latin America and the Caribbean, believes the region will not recover its pre-pandemic gross domestic product level until at least 2023.
