Amid the COVID-19 Crisis, Latin America and the Caribbean Received in 2020 the Lowest Amount of Foreign Direct Investment in a Decade

Covid crisis

In a new report, ECLAC calls on the region’s countries to channel FDI flows – which are expected to hold steady in 2021 – towards activities that generate greater productivity, innovation and technology.

In the context of the severe health, economic and social crisis prompted by the COVID-19 pandemic, Latin America and the Caribbean received $105.48 billion dollars in Foreign Direct Investment in 2020 – 34.7% less than in 2019, 51% less than the record high achieved in 2012, and the lowest amount since 2010, the Economic Commission for Latin America and the Caribbean (ECLAC) indicated today upon presenting its annual study Foreign Direct Investment in Latin America and the Caribbean 2021.

Globally, the amount of Foreign Direct Investment (FDI) dropped by 35% in 2020 to approximately $1 trillion dollars, which represents the lowest value since 2005. Latin America and the Caribbean has experienced a downward trend since 2013, which has spotlighted the relationship between FDI flows and commodity price cycles, mainly in South America, according to the report launched at a virtual press conference held by Alicia Bárcena, the United Nations regional organization’s Executive Secretary.

The international context suggests that global FDI flows will recover slowly. Furthermore, the pursuit of assets in sectors that are strategic for the international reactivation and for public plans to transform the productive structure (infrastructure, the health industry, the digital economy) indicates that most of these operations will be centered on Europe, North America and some countries in Asia, increasing global asymmetries, the study warns.

In Latin America and the Caribbean, FDI projects experienced a rebound between September 2020 and February 2021; however, from that month to May 2021, it appears that a new drop occurred in the value of the announcements made. “In this scenario, it is difficult to imagine that FDI inflows into the region could increase by more than 5% in 2021,” ECLAC’s report states.

“FDI has made relevant contributions in Latin America and the Caribbean, but there are no elements indicating that in the last decade it has contributed to significant changes in the region’s productive structure or that it has served as a catalyst for transforming the productive development model. Today, the challenge is greater due to the characteristics and magnitude of the crisis. We need to channel FDI towards activities that generate greater productivity, innovation and technology,” Alicia Bárcena sustained.

ECLAC, she said, has identified eight strategic sectors to drive a big push for sustainability in the region. These sectors – which could be bolstered by FDI – are the transition to renewable energy; sustainable electromobility in cities; an inclusive digital revolution; the health-care manufacturing industry; the bioeconomy; the care economy; the circular economy; and sustainable tourism.

The report indicates that FDI increased in just five of the region’s countries in 2020: the Bahamas and Barbados in the Caribbean; Ecuador and Paraguay in South America; and Mexico, which is the second-biggest recipient in the region after Brazil. The natural resources and manufacturing sectors, with declines of -47% and -38%, respectively, were the hardest hit in 2020. Renewable energy held steady as the sector in the region that sparks the most interest among foreign investors.

In 2020, the United States increased its participation in the region’s FDI from 27% to 37%, amid a sharp decline for Europe (which fell from 51% to 38%) and Latin America (which went from 10% to 6%). “The smaller decline of the United States as a source of FDI is due mainly to the increase in that country’s investments in Brazil in 2020. In contrast, the inflows from the two European countries that had the most investments in Brazil – the Netherlands and Luxembourg – fell between 2020 and 2019, which led to Europe having less weight as an investor,” the document states.

In 2020, the flows of Latin American transnational enterprises (known as translatinas) also plunged (-73%), although with sharp heterogeneity: while Chile and Mexico showed an increase in direct investment flows abroad, Argentina, Brazil, Colombia and Panama recorded setbacks.

“In addition to maintaining emergency aid for the most vulnerable sectors of the population and smaller companies, the region’s countries should set in motion strategic plans both for reactivation and the transformation of production. Governments and the private sector should use their capacities so that the policy for attracting foreign capital becomes part of industrial policy as an instrument for transforming the productive structure,” Bárcena emphasized.

The second chapter of the report, entitled “Chinese investment in a changing world: repercussions for the region,” poses that “Latin America and the Caribbean’s process for recovering from the COVID-19 pandemic is an opportunity to start a new phase in its economic relations with China and to develop policies to ensure that investments by that country contribute to building productive capacities in receiving countries, to establishing ties with local suppliers, to creating employment, and to promoting sustainable development. Multilateralism must be part of this strategic approach.”

Finally, the third chapter, entitled “Investment strategies in the digital age,” analyzes digital development in the world and the region through a conceptual model that includes three dimensions (connected economy, digital economy and digitized economy) and addresses numerous challenges related to inclusion, innovation, regulation and taxation, among others. FDI can contribute to the digital transformation in Latin America and the Caribbean, ECLAC affirms, but if the structural characteristics of the region’s economies are not taken into account, digitalization could widen existing gaps and produce greater exclusion and distributive inequality, it concludes.

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Labor Markets in the Region Will Be Slow to Recover from the Severe Impact of the COVID-19 Pandemic in 2020

Covid recovery

A new ECLAC-ILO joint publication warns that in order to reduce the high unemployment rates seen during the pandemic, significant efforts will be needed on employment policies aimed at the most vulnerable groups.

Regional GDP in 2020 experienced a -7.1% contraction, the biggest in a century, producing in turn a drop in employment and an increase in the unemployment rate, which reached 10.5% on average that same year, ECLAC and the ILO indicate in a new study released earlier in June.

The Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO) launched this Monday, June 14, edition No. 24 of their joint publication, Employment Situation in Latin America and the Caribbean (June 2021) – now available online – in which they analyze the impact of the crisis prompted by COVID-19 on the main labor market indicators in 2020.

According to the document, the biggest effects were seen in the second quarter of last year, when governments implemented confinement measures and others aimed at containing the pandemic. These measures produced a sharp drop in economic activity, employment, and in the number of hours worked. Many workers, mainly informal ones, were unable to continue their productive tasks and had to withdraw from the market, which prevented them from earning income for their households and acting in a countercyclical way, as in previous crises. Furthermore, the suspension of care services and schools gave rise to a heavy workload inside homes, which is unequally distributed in general, overburdening women in particular.

Starting in the third quarter of the year, workers began returning to the labor market and a gradual increase in employment was observed. However, 2020 ended with lower levels of labor participation and employment and higher levels of unemployment than what existed before the pandemic.

“Given the depth of the impact of the crisis in the region’s labor markets in 2020, countries must implement policies that stimulate job creation, particularly among the most vulnerable groups such as young people and women,” Alicia Bárcena, ECLAC’s Executive Secretary, and Vinícius Pinheiro, the ILO’s Regional Director for Latin America and the Caribbean, stated in the publication’s foreword. The two officials also stressed the importance of regulating new forms of hiring through digital platforms.

According to the report, the contraction in employment in 2020 was much more pronounced in sectors such as the hotel business (19.2%), construction (11.7%), trade (10.8%) and transportation (9.2%), which together account for around 40% of regional employment. At the same time, industry (8.6%) and other services (7.5%) also experienced contractions, while in the agricultural sector there were comparatively fewer job losses (2.4%).

Both United Nations organizations emphasize that it is essential to think about strategies that would enable laying the foundations for a return to the job market with better labor conditions for all workers. This entails shoring up the employment recovery in the most highly affected categories and sectors, improving institutional aspects regarding health and job safety, formalizing workers, promoting women’s labor inclusion, and adequately regulating new work modalities.

In the current edition of the Employment Situation in Latin America and the Caribbean, ECLAC and the ILO also examine key aspects of decent work for workers mediated by digital platforms. During the pandemic, these workers constituted a very important source of employment due to the need to reduce personal contact and maintain the dispatch of essential goods. However, evidence suggests that there is a high degree of precariousness in this work modality characterized by instability, long workdays, the absence of socio-labor protection, and the lack of options for dialogue and representation.

The report emphasizes the need to design adequate regulatory frameworks to achieve the goal of establishing and protecting social and labor rights for these new and expanding work modalities.

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Alicia Bárcena Calls for Prioritizing Nature-based Solutions to Protect Ecosystem Integrity and Biodiversity, and Place Value on their Contribution to the Economy and Society


The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, called today for taking decisive climate action including to decarbonize economies, restore ecosystems and place value on their contribution to the economy and society, during a seminar organized by the Regional Office of the United Nations Environment Programme (UNEP) and the National College of Mexico.

During her presentation on the economic perspective regarding sustainability, the senior United Nations official stressed the urgency of changing the development paradigm and model that have led us to overshoot the planet’s limits, with high economic and social costs.

“A window of opportunity opens today to rethink the development of the infrastructure of life: environment and nature, health, pensions, housing, employment, social protection, and moving towards a care society,” Alicia Bárcena affirmed.

ECLAC’s highest authority was one of the main speakers on the second day of the event held to present the report Making Peace with Nature: A scientific blueprint to tackle the climate, biodiversity and pollution emergencies, produced by UNEP, which was moderated by Julia Carabias, an academic from the Faculty of Sciences of the National Autonomous University of Mexico (UNAM).

Participating in the event with Alicia Bárcena were José Sarukhán, National Coordinator of the National Commission for the Knowledge and Use of Biodiversity (CONABIO); Cristián Samper, President and Chief Executive of the Wildlife Conservation Society; Hesiquio Benítez, Director of International Cooperation and Implementation of CONABIO; María Jesús Iraola, Lead Author and Coordinator of the sixth Global Environment Outlook (GEO-6) for Youth report; and Piedad Martin, UNEP’s Deputy Regional Director in Latin America and the Caribbean.

In her presentation, ECLAC’s Executive Secretary stressed that the region has extraordinary, but highly threatened, biodiversity, with the greatest loss of primary forest, 31 areas with eutrophication of the seas and 19 dead zones, 25% of socio-environmental conflicts globally, and incomplete and fragmented environmental institutions with small budgets and weak regulations.

She added that during the pandemic, the region has experienced greater use of natural resources for subsistence, self-employment, energy and food, among other purposes. It has also recorded an increase in illegality, above all in mining; a weakening of environmental rules and of environmental impact assessments on major development projects; reprimarization; and a reduction in environmental budgets.

Alicia Bárcena specified that COVID-19 broke out in the region in the context of three structural crises: a social crisis that is reflected in the high levels of inequality, with severe social, political and economic consequences; an economic crisis that translates into low growth in production and trade, and the decoupling of the financial system; and an environmental crisis that is manifested in environmental degradation that is irreversible in many cases, with potentially disastrous consequences for the planet.

“These three crises and the policies needed to overcome them mutually interact. Changing the region’s development pattern requires acting on all three in a coordinated way. To achieve this, a minimum growth rate of 4% is needed. This must be accompanied by a very sharp redistribution – that the wealthiest 1% give to the poorest 1% – and that is only attainable through fiscal policies,” Alicia Bárcena explained.

She emphasized that ECLAC proposes a transformative recovery with equality and sustainability. To that end, the Commission has identified eight sectors that promote technical change, generate employment and reduce external constraints and the environmental footprint. These are the transition towards renewable energy, sustainable electromobility in cities, an inclusive digital revolution, the health-care manufacturing industry, the bioeconomy, the care economy, the circular economy, and sustainable tourism.

ECLAC’s Executive Secretary called for bridging the short and long term through expansionary fiscal policy and low interest rates, an increase in tax collection using the criteria of progressivity, the expansion of sources of taxation, and the harnessing of sources of public finance to mobilize private financing, such as bonds and green finance.

On environmental matters, she called for internalizing the information available in countries’ national accounts, introducing environmental taxes or adjusting those already in existence, incorporating sustainability into the evaluation of investment, and measuring development, natural heritage and well-being and not just market transactions, among other measures.

Finally, Alicia Bárcena urged for strengthening regional integration.

“We are a megadiverse region and we have to talk about biodiversity with a single voice, and with a renewed multilateralism,” she concluded.

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Argentina Becomes the Second Country That Invested the Most in Bogota in 2020

Argentina economy

Quality of human talent, as well as economic stability, were determining factors for Argentine companies to invest more than 155 million dollars in the city.

 Bogota is becoming an increasingly important investment destination for Argentine companies. According to figures analyzed by Invest in Bogota for the period 2016-2020, year after year, the number of new investment and expansion projects that arrived in the city from the Latin-American country remained constantly on the rise, except for 2020.

Last year, despite the fact that the pandemic slowed the growth that had been registered in terms of projects, Invest in Bogota accompanied six new investments or expansion of Argentine companies in the Bogota Region, a figure that made it the second country that invested the most in the capital, only below the United States.

One of the most outstanding investment projects that Bogota received during the past year was from Mercadolibre, that launched a technology and innovation Center, the first of its characteristics that the company developed in Colombia, and which, according to the company, will become the engine to promote the development and growth of its operation in the local market and in Latin America.

“In the last five years, Bogota received investments from Argentina for more than 155 million dollars through 31 projects, which generated more than 3,800 direct jobs”, highlights the Executive Director of Invest in Bogota, Juan Gabriel Pérez, who adds that the city, based on its strengths and what learned from the pandemic, has been strengthened and hopes to resume the path of growth in terms of investment this year.

Another of the outstanding examples of Argentine companies that have trusted Bogota and that have made the city fundamental for their international operations is Globant. This IT and software development company already has more than 3,500 employees in Colombia, most of whom are in Bogotá. In addition, the workforce that it has throughout the country is already equivalent to 30% of the total employees that the company has throughout the world.

Analyzing the behavior of Argentine investments in Bogotá during the last five years, 2019 appears as the period in which the largest number of projects arrived (nine in total), with companies in sectors such as software and IT services, corporate services, and textiles, mainly.

In 2021, Invest in Bogota expects to carry out at least two virtual campaigns in which it will promote investment by Argentine companies in sectors such as information technology and services outsourcing, creative industries, life sciences, value-added manufacturing and infrastructure.

For these reasons, Argentine companies invest in Colombia:

Conditions such as economic and political stability, as well as the country’s good investment climate, are usually decisive for international companies, including Argentine ones, which decide to locate in Colombia and in its capital.

“Colombia, without a doubt, and I have been saying this for 20 years in this BPO sector, has a series of benefits and virtues that make the country a very attractive place for investment”, highlights the CEO Apex America Colombia, Álvaro Pinzón, who includes in this list aspects such as labor legislation, the quality and adaptability of human talent and the geographical position of the country.

Apex America, an Argentine service outsourcing company that arrived in the country in August 2019 and that has invested about 10 million dollars, has found in Colombia and Bogota the ideal destination not only for its customer service operations, but also for the development of technological and digital solutions such as virtual agents and conversation analysis tools, both in voice and written, which are used to improve the consumer experience.

“At this moment in which the economic reactivation is advancing, we see in foreign investment a pillar of development, growth and opportunities. Colombia has a wide potential for the arrival and diversification of Argentine investment in our territory with tax incentives, clear rules and legal security, in addition to providing an export and near-shoring platform, thanks to the 17 current trade agreements that allow us to access a market of more than 1,600 million consumers in the world”, said Flavia Santoro, president of ProColombia.

Thanks to the international trade agreements signed by Colombia with other countries, companies located in Bogota have direct access to the Colombian market – of US $ 271 billion – one of the largest and most dynamic in Latin America.

“It is logical to be in Colombia, a country that has given great importance to sectors such as BPO and that allows you to have a different commercial position than other countries in the region can give you. Emphasizing Bogota, this is a city located in the center of the continent, with very good air connectivity, access to international markets thanks to the country’s free trade agreements and ethical and well-trained people, factors that make it easier to think about scalable operations”, adds Martín Ruiz, Legal and Corporate Affairs Manager of Skytel, a BPO company with headquarters in Buenos Aires and which has 400 employees.

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Cuba Accesses US$23.9 Million Grant From Green Climate Fund For Coastal Resilience Project


The Green Climate Fund (GCF) approved US$23.9 million in finance for a coastal resilience project along Cuba’s southern coastline.

GCF financing will be provided during the project’s first 8 years and will complement US$20.3 million of dedicated financing that will be provided by the Government of Cuba for the implementation of an ecosystem-based adaptation approach for coastal protection. The 30-year ‘Mi Costa’ project will enhance climate resilience for over 440,000 Cubans and protect vulnerable coastal habitats.

Delivered by the Environment Agency of the Cuban Ministry of Science, Technology and Environment (CITMA) with support from the United Nations Development Programme (UNDP), the innovative project will accelerate the ambition of the Cuban Government’s contribution to the Paris Agreement, enhancing ecosystem-based adaptation approaches for 1,300 kilometers of coastline across 24 municipalities. It will also provide an important basis of support for the implementation of the “State Plan to Manage Climate Change ‘Tarea Vida’ (Life Task).”

The island nation of Cuba is highly vulnerable to the impacts of climate change. And while the Cuban Government has made impressive gains towards sustainable development, coastal erosion, flooding, saline intrusion, drought and sea-level rise, threaten these hard-won economic and social gains.

“Impacts from these climate drivers pose an existential threat to coastal settlements and communities. With funding from the Green Climate Fund and support from UNDP, this new project will provide valuable inputs to the Government’s work under Tarea Vida. Together these efforts will help vulnerable populations adapt to risks brought on by climate change,” said Dr. Odalys Goicochea, Director, General Environment Directorate of CITMA.

Projections show that if no intervention is made by the end of the 21st Century, up to 21 coastal communities will disappear entirely in Cuba, with 98 more severely affected by climate-related threats.

Hurricanes have also extensively damaged infrastructure across the island. Hurricane Matthew crossed the eastern end of Cuba in October 2016, causing over US$97 million in damages (2.6 percent of GDP). Hurricanes Ike (2008) and Sandy (2012) cost US$293 million (12.05 percent of GDP) and US$278 million (9.53 percent of GDP) respectively.

“By taking cost-effective ecosystem-based approaches, this innovative project will protect and restore natural habitats, reefs, seagrasses and mangroves, and help communities to protect their environment from the present and future risks posed by these severe tropical storms and hurricanes, sea-level rise and other climate change related risks. A key aspect of the project will be its focus on working with communities and local authorities to fully understand the value of ecosystems to their own resilience and livelihoods,” said Dr. Maritza García, President of the Environment Agency.

In all, the project will restore over 11,000 hectares of mangroves, 3,000 hectares of swamp forest and 900 hectares of grass swamp. These steps will improve the health of over 9,000 hectares of seagrass beds and approximately 134 kilometers of coral reef crests – essential protections from rising seas and storm surges. The project’s integrated ecosystem-based approach will allow coastal ecosystems to act as a layer of protective barriers to climate change impact seen in the form of coastal erosion and flooding while managing saline intrusion.

“The interventions on ecosystems and with the participation of communities will be reflected in the benefit of more than 1.3 million of inhabitants. “Mi Costa” will be a critical contribution to Cuba’s efforts in achieving the Sustainable Developments Goals set in the 2030 Agenda,” said Ms. Maribel Gutiérrez, the UNDP Cuba Resident Representative.

“Mi Costa” builds on the impacts of a highly successful coastal resilience project financed by the Adaptation Fund and implemented also with the support of UNDP and Environment Agency.

This new project will enhance adaptive capacity for vulnerable coastal communities on Cuba’s southern coast by rehabilitating coastal land and seascapes, and their interlinked ecosystems and hydrology, replanting and restoring mangroves and reefs, and strengthening local climate governance and approaches for communities living on the frontlines of the climate crisis. It will be benefitted by leveraging the support of local centers for environmental education, capacity building centers as well as local and national coordination mechanisms as part of the project’s long-term approach to manage climate change.

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New Report Analyses the Socioeconomic Repercussions of COVID-19 in the Caribbean

Covid economy

The large-scale and long-lasting effects of coronavirus disease (COVID-19), combined with the possible impact of other hazards and recent events, threaten to damage or destroy vital infrastructure and the life-support systems of large parts of societies and economies. That is why it is urgently necessary to move towards a systemic approach to disaster risk, primarily in the Caribbean, which is highly vulnerable to the effects of climate change, with economies dependent on foreign tourism and heavy debt burdens. So indicates a document released today, which was produced by the Economic Commission for Latin America and the Caribbean (ECLAC) and the United Nations Office for Disaster Risk Reduction (UNDRR).

The report entitled The coronavirus disease (COVID-19) pandemic: an opportunity for a systemic approach to disaster risk for the Caribbean emphasizes that disaster risk is systemic and generates complex interactions between human, social, political and economic systems on the one hand, and natural systems on the other. The COVID-19 pandemic demonstrates the extent to which a single hazard has the potential to trigger a series of cascading effects, impacting the life-support systems of societies and economies worldwide.

“This crisis underscores the need for disaster risk management to be incorporated into national planning, in order to guarantee a comprehensive response to disasters. At the global and regional levels, it is crucial that those of us who work in international organizations seek ways to promote and foster a new development model and a global framework that would enable us to provide a coordinated and adequate response to the next pandemic,” Alicia Bárcena, ECLAC’s Executive Secretary, affirmed.

Meanwhile, Mami Mizutori, Special Representative of the Secretary-General for Disaster Risk Reduction, indicated that “now is the time for multi-stakeholder dialogue and action to understand and manage systemic risk. Progress towards risk-informed sustainable development will only be accelerated by incorporating systems-based approaches into the design of policies and investments across all sectors and regions, and at all levels.”

The document indicates that the duration of COVID-19 increases the likelihood that the risk of disasters originating from other threats occurs simultaneously, or that post-disaster reconstruction be delayed. The effects and impacts of the Eta and Iota hurricanes in Honduras, Guatemala and Nicaragua – combined with those of COVID-19 – are proof of this, as is the delay prompted by the pandemic in reconstruction efforts after the disaster caused by Hurricane Dorian in the Bahamas.

It specifies that the selection of the Caribbean to exemplify the potential effects of systemic disaster risk is no coincidence. “This region was chosen because it is highly vulnerable to hydrometeorological or extreme climate phenomena, it has more than 90% of the population living in coastal areas and its economies are dependent on foreign tourism and are highly indebted,” the report emphasizes, adding that the economic and social effects of COVID-19 have been devastating for the Caribbean and will last for several years.

According to the report, the pandemic has brought to light the cracks in current development models and highlighted their limitations, both globally as well as in the case of Latin America and the Caribbean in particular. Until recently, orthodox economists agreed that maintaining fiscal balance, limiting State intervention in the economy as much as possible, and fostering trade and financial openness would suffice to generate growth and redistribution. There was unfettered confidence that liberalizing markets for goods, services and capital would be the right formula for ensuring prosperity. This ideological framework sustained a system of international governance whose main objective was to minimize national barriers to trade and investment.

“It is now recognized that the State must play a much more important role, regulating and coordinating markets and promoting social protection and equality. Building back better in the Caribbean must be rebuilding with equality and resilience, for instance by implementing active fiscal policies with a gender approach to mitigate the disproportionate effects of the COVID-19 pandemic on women and by forging political compacts at all levels based on feminist principles of redistribution of power, time, work and resources. The aim is to move towards a development model that has equality and environmental sustainability at its center. In the Caribbean, which is threatened by multiple hazards, a systemic approach is required to reduce disaster risk and vulnerabilities,” the document states.

The report concludes that the complexity of these situations demands an approach that transcends traditional and compartmentalized methods of disaster risk reduction. It asserts that, in order for efforts to reduce disaster impact to be effective, it is necessary to abandon the simplistic model that ignores the systemic characteristics of extreme phenomena. This applies to institutional arrangements for risk governance, community organizations, research initiatives and policymaking. Thus, development planning can play a fundamental role, helping to incorporate a systemic approach into risk governance.

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Pandemic Prompts Rise in Poverty to Levels Unprecedented in Recent Decades

poverty and unemployment covid

In a new annual report, ECLAC estimates that the total number of poor people rose to 209 million by the end of 2020, which is 22 million more people than in the previous year. In addition, it calls for creating a new welfare state.

Poverty and extreme poverty in Latin America reached levels in 2020 that had not been seen in the last 12 and 20 years, respectively, while the indices of inequality in the region worsened along with employment and labor participation rates, among women above all, due to the COVID-19 pandemic and despite the emergency social protection measures that countries have adopted to halt this phenomenon, the Economic Commission for Latin America and the Caribbean (ECLAC) reported today.

The Executive Secretary of the United Nations regional commission, Alicia Bárcena, presented a new edition of the flagship annual report Social Panorama of Latin America 2020, which indicates that the pandemic burst forth in a complex economic, social and political scenario of low growth, rising poverty and growing social tensions. In addition, it exposes the structural inequalities that characterize Latin American societies and the high levels of informality and lack of social protection, as well as the unfair sexual division of labor and social organization of care, which undermines women’s full exercise of rights and autonomy.

According to ECLAC’s new projections – as a result of the steep economic recession in the region, which will notch a -7.7% drop in GDP – it is estimated that in 2020 the extreme poverty rate was 12.5% while the poverty rate affected 33.7% of the population. This means that the total number of poor people rose to 209 million by the end of 2020, affecting 22 million more people than in the previous year. Of that total, 78 million people found themselves living in extreme poverty, or 8 million more than in 2019.

The document indicates that gaps remain between population groups: poverty is greater in rural areas, among children and adolescents; indigenous and Afro-descendent persons; and in the population with lower educational levels. It adds that the increase in poverty and extreme poverty levels would be even greater in the absence of the measures implemented by governments to transfer emergency income to households. Governments in the region implemented 263 emergency social protection measures in 2020, reaching 49.4% of the population, which is approximately 84 million households or 326 million people. Without these measures, the incidence of extreme poverty would have surged to 15.8% and that of poverty, to 37.2% of the population.

“The pandemic has exposed and exacerbated the region’s major structural gaps and currently, we are living in a time of heightened uncertainty in which neither the way out of the crisis nor the speed of that process is yet known. There is no doubt that the costs of inequality have become unsustainable and that it is necessary to build back with equality and sustainability, aiming to create a true welfare state, a task long postponed in the region,” Alicia Bárcena affirmed.

That is why ECLAC calls for guaranteeing universal social protection as a central pillar of the welfare state. It specifies that in the short term, it is necessary to implement or maintain the emergency transfers proposed by the Commission: the emergency basic income (EBI) and the anti-hunger grant and EBI for women. In the medium and long term, countries must move towards a universal basic income, prioritizing families with children and adolescents, and get behind universal, comprehensive and sustainable social protection systems, increasing their coverage, as a central component of a new welfare state.

The Commission also urges for moving towards new social and fiscal compacts for equality in times of pandemic, and for ensuring health, education and digital inclusion, so that no one lags behind.

“ECLAC’s call for a new social compact is more relevant than ever: the pandemic is a critical juncture that is redefining what is possible, and it opens a window of opportunity to leave the culture of privilege behind,” the high-level United Nations official emphasized.

The report indicates that the pandemic’s adverse impact on people’s income mainly affects lower and lower-middle income strata. It is estimated that in 2020, some 491 million Latin Americans were living with income of up to three times the poverty line. And around 59 million people who belonged to the middle strata in 2019 experienced a process of downward economic mobility.

According to the document, inequality in total income per person is expected to have grown in 2020, leading to the average Gini index being 2.9% higher than what was recorded in 2019. Without the transfers made by governments to attenuate the loss of wage income (the distribution of which tends to be concentrated in low and middle income groups), the increase in the average Gini index for the region would have been 5.6%.

The report also underscores the major labor market impacts of the COVID-19 crisis. The regional unemployment rate ended 2020 at 10.7%, which represents an increase of 2.6 percentage points versus the figure recorded in 2019 (8.1%). It adds that the overall drop in employment and withdrawal from the workforce have had an intensified impact on women, informal workers, young people and migrants.

The report includes a special chapter on the care economy as a strategic sector for a recovery with equality. It emphasizes that the pandemic has revealed the enormous cost the region’s countries have borne because they do not have an integrated, defeminized and quality care system with broad coverage. In light of this, it warns that “it is urgently necessary to invest in this sector to tackle the crisis, guarantee the right to give care and receive care, as well as to reactivate the economy from a perspective of equality and sustainable development.”

To this end, ECLAC urges for moving towards a care society that would allow for guaranteeing an egalitarian and sustainable recovery in Latin America and the Caribbean.


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The COVID-19 Pandemic Has Caused a Setback of Over a Decade in Labor Market Participation for Women in the Region

Woman Labour

In a new special report, ECLAC stresses that it is essential to advance toward policies that contribute to a sustainable recovery with gender equality in Latin America and the Caribbean.

The crisis caused by the COVID-19 pandemic has had a negative impact on employment and labor conditions for women in Latin America and the Caribbean, generating a setback of more than a decade in terms of the progress achieved in labor market participation, according to Special Report COVID-19 No. 9: The economic autonomy of women in a sustainable recovery with equality, released today by the Economic Commission for Latin America and the Caribbean (ECLAC).

According to the report, the rate of job market participation by women was at 46% in 2020, while for men it was 69% (in 2019, these rates were 52% and 73.6%, respectively). It is further estimated that the unemployment rate for women reached 12% in 2020, a percentage that rises to 22.2% if we factor in women’s participation in the labor force in 2019. In 2020, the study explains, there was a mass exodus of women from the labor force, who have not returned to search for employment, having to attend to care demands at home. 

The decline in regional gross domestic product (GDP) (-7.7% in 2020) and the impact of the crisis on employment are negatively affecting household income, says the report presented at a press conference by Alicia Bárcena, ECLAC’s Executive Secretary. The United Nations regional organization estimates that around 118 million Latin American women are living in poverty, 23 million more than in 2019.

“The women of the region are a crucial part of the frontline response to the pandemic. Some 73.2% of people employed in the health sector are women, who have had to face extreme working conditions such as long work days, in addition to increased risk of contagion as health personnel. All of this in a regional context in which salary discrimination persists, where salaries for women who work in the health sector are 23.7% less than men’s in the same sector,” pointed out Alicia Bárcena.

The study further underscores that paid domestic work, characterized as highly precarious and impossible to do remotely, has been one of the sectors hit hardest by the crisis. In 2019, before the pandemic, around 13 million people worked in paid domestic labor (91.5% of them women). In total, this sector employed 11.1% of employed women in the region. However, in the second quarter of 2020, the employment levels in paid domestic work fell -24.7% in Brazil; -46.3% in Chile; -44.4% in Colombia; -45.5% in Costa Rica; -33.2% in Mexico; and -15.5% in Paraguay.

“Latin America and the Caribbean must invest in the care economy and recognize it as a dynamizing sector in the recovery, with multiplying effects on wellbeing, the redistribution of time and income, labor participation, growth and tax revenue,” asserted the ECLAC senior authority.

In this context, Bárcena encouraged governments to “prioritize health workers in their vaccination strategies – including persons who provide associated services like cleaning, transport and care – as well as those working in educations systems and domestic health, most of them women, who are a fundamental pillar for the care and sustainability of life.”

According to the ECLAC report, 56.9% of women in Latin America and 54.3% in the Caribbean are employed in sectors where the pandemic is expected to have a higher negative impact in terms of employment and income.

According to the study, the closing of borders, restrictions on mobility, the fall in international trade and paralysis of internal production have impacted the female workers and businesswomen associated with sectors like commerce, tourism and manufacturing. For instance, the tourism sector, where 61.5% of positions are occupied by women, suffered a significant contraction that mainly affected the countries of the Caribbean, where one in 10 working women are employed in this sector.

During the presentation of the report, ECLAC’s Executive Secretary highlighted the urgent need to reinforce employment policies and ensure that women participate in the dynamizing sectors of the economy in decent working conditions. She likewise emphasized the importance of combining measures aimed at employment support and reactivation with measures of immediate attention to losses in income.

In this context it is “urgent that we promote inclusive processes of digital transformation that guarantee women access to technologies, strengthen their abilities and remove the socioeconomic barriers they face in order to strengthen their economic autonomy,” underlined Alicia Bárcena, while at the same time stressing the low fiscal effort posed by the basic digital basket proposed by ECLAC (1% of regional GDP) and the enormous impact connecting one of every four women in Latin America and the Caribbean would have.

“It is essential that we advance toward a new fiscal compact that promotes gender equality and prevents the deepening of poverty levels among women, the burden of non-paid work and the reduction of financing for gender policies,” she warned.

“In addition to having a gender perspective that cuts across all recovery policies, affirmative actions are required in the areas of fiscal, labor, productive, economic and social policies to protect the rights of women achieved in the past decade, prevent setbacks and take on gender inequalities in the short, medium and long terms,” concluded Bárcena.

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Leaders from Latin America and the Caribbean Set Priorities for the Post COVID-19 Recovery Agenda

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Over 2,700 attendees and representatives from 35 governments met virtually on January 12, 13 and 14 at the XII Ministerial Forum for Social Development in Latin America and the Caribbean “COVID-19 – Beyond Recovery. Towards a new social contract for LAC”.

The event co-organized by the government of the Republic of Colombia and the United Nations Development Program (UNDP), included the Fourth Meeting of the Board of Directors of the Regional Conference on Social Development in Latin America and the Caribbean of the Economic Commission for Latin America and the Caribbean (ECLAC). It brought together vice-presidencies and ministries in charge of the design and implementation of development policies oriented to social, economic and environmental areas in Latin America and the Caribbean. The Forum was aimed at sharing and analyzing experiences and strategies to reach a new social contract for the region that goes beyond the recovery to target conditions prior to the pandemic, and that advances in the construction of more inclusive, productive and resilient societies better equiped to face future crises.

The event was framed by the reflection on how the impact of the COVID-19 pandemic in the region quickly went from being a health crisis, to presenting social, economic and, in several cases, even governance challenges. The pandemic has also interacted with structural lags, threatening decades of progress in the development of countries.

COVID-19 and its unprecedented effects on human development are a warning of the kinds of challenges we will undoubtedly face in the future, unless we transform the way we interact with the planet.

In order not to leave anyone behind, it is essential to strengthen national, regional and global alliances and cooperation mechanisms that include all sectors and forces of society. At the regional level, the new United Nations Regional Collaboration Platform (RCP) for Latin America and the Caribbean, established following the mandate of the UN General Assembly and the UN Economic and Social Council (ECOSOC) to strengthen the regional architecture of the United Nations and ensure a better response to the 2030 Agenda for Sustainable Development, will play a key role.


The forum focused on three critical areas for the region’s development: social protection, inclusive digital transformation, and effective governance.

The forum opened with a welcome greeting from the Minister of Foreign Affairs of Colombia, Claudia Blum, followed by the valuable interventions of H.E. Iván Duque Márquez, President of Colombia, and the renowned academic Francis Fukuyama, among other participants. The first event, reflected on how social protection and tax systems can serve the construction of resilient societies. Participants deliberated on the importance of expanding access to health and social protection for those sectors more vulnerable to the crisis. The importance of rethinking social protection systems so that they gradually move towards universal schemes, was also discussed. This requires to understand social protection systems as a part of a broad social pact that is intimately linked to countries’ fiscal situation.

The 2020 Ministerial Forum offered an oportunity for the Regional Launch of the Global Human Development Report, which had the honor of having H.E. Iván Duque Márquez, President of Colombia as the main speaker and Ms. Laura Chinchilla, Former President of Costa Rica, as a panelist, among other distinguished personalities. The new Human Development Report 2020 (HDI) looks at how humanity can navigate this new era (the era of the Anthropocene), unfolding the relationships between people and the planet and showing how our impacts on Earth interact with inequalities in societies.


The COVID-19 crisis has also made clear the need to move away from a classification of Caribbean economies based solely on income to incorporate a vulnerabilities approach. With a presentation by Ravi Kanbur, Professor of World Affairs and Applied Economics at Cornell University, the forum served as an initial platform for discussion on options for a new classification of the Caribbean economies.

In relation to digital transformation, the central role of technological inclusion was analyzed so that the impact caused by the pandemic does not aggravate social inequalities between those with and without access to economic or learning activities through digital means. The current situation is an opportunity for digital inclusion to promote present and future economic dynamism, in coordination with private agents and civil society. In fact, one of the discussion tables that attracted the most attention from the public, was the one where private initiatives for digitalization for development were discussed with senior executives from companies such as Visa, AT & T / DIRECTTV, 1MillionBot and Davinci Technologies.

On the realm of effective governance, prominent personalities such as H.E. David Choquehuanca Céspedes, Vice President of Bolivia and H.E. Ricardo Lagos, Former President of Chile, among others, shared their perspectives. According to them, a broad and inclusive public deliberation is necessary for evidence-based policies to find an echo in the competitive Marketplace for ideas. Policies that are conceived with transparency and citizens’ participation, are more likely to be effective and sustainable in the medium term.


Finally, the participants examined the measures necessary to consolidate effective governance to prevent the impact on the income of millions of families and on public budgets, from increasing political polarization.

The Vice Presidencies and Ministries thanked the government of the Republic of Colombia and UNDP for the opportunity to dialogue on crucial issues in a context of unprecedented complexity. They highlighted the role of the organization and its strategic contributions offering timely research and policy proposals based on evidence to build solutions to the crisis; as well as the Economic Commission for Latin America and the Caribbean (ECLAC) for its contributions to the reflections of the Forum.

A new social pact to emerge from the crisis requires recognizing that, as a systemic crisis, recovery from the pandemic requires a systemic solution and, therefore, this is an unprecedented opportunity to revolutionize the way we think about and conduct social development.

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Colombian President Officially Opens Trina Solar Plant

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The second phase of the Los Llanos photovoltaic power plant project developed and managed by Trina Solar in Colombia has been connected to the grid and the start of its commercial operations officially declared.

The President of Colombia, Iván Duque Márquez, cut the ribbon at the delivery ceremony on Jan 22. He expressed his gratitude to Trina Solar for its important contribution to the smooth grid connection of the project and said it will enable thousands of Colombian families to have safe, reliable and permanent energy. Colombia has made great strides in renewable energy, he said, and by next year the installed capacity of solar and wind energy in the country will have increased more than seven-fold.

Phases one, two and three of the Los Llanos project, with total installed capacity of 82 MWp, have been developed by Trina Solar’s International System Business Unit (ISBU). Trina Solar (Colombia), a wholly owned subsidiary of Trina Solar, provided EPC management services for this project. The first phase of the 27MWp megawatt project was completed and delivered to the grid in October. The second phase, involving grid connection, installed capacity of 27MWp megawatts and will generate 51 gigawatt-hours of electricity each year, equivalent to the consumption of 23,800 households. It will help reduce carbon dioxide emissions by about 19,450 tons a year.

The President of Trina Solar International System Business, Mr. You Hongming, said that having President Duque cut the ribbon was a great honor for the company.

“The President’s recognition of Trina Solar’s contribution to Colombia’s renewable energy business encourages us greatly. Trina Solar International System Business has worked on cultivating its activities in Latin America over many years, has accumulated a fantastic pipeline and built up a strong and experienced project execution team. Our team completed the second phase of the Los Llanos project  and achieved grid connection in just four months, this is a remarkable achievement given the difficult circumstances resulted from COVID-19.”

The head of the Latin American North Region of Trina Solar International System Business, Ruben Borja, said: “President Duque’s attendance at the ceremony adds to our confidence in the Colombian solar market. Our team is now giving its all to complete the fourth and fifth stages of the Los Llanos project, which will have installed capacity of about 52 MWp.”

The overall project will install more than 200,000 high-reliability, high-power dual-glass modules, coupled with Vanguard Tracker Solutions. The perfect adaptation of Trina Solar’s dual-glass modules and the tracker system can reduce the levelized cost of energy and provide customers with high reliability, high-power generation and higher returns. As the leading global PV and smart energy total solution provider, Trina Solar provides customers worldwide with a package of integrated solar energy solutions including products, power plants development, design, procurement and EPC management services.

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