During the period 1960-1980 Latin America and the Caribbean experienced a positive economic performance that positioned the region as a benchmark for growth and destination of foreign capital. Until 1981, low interest rates, favourable terms of trade and generous international lending created a climate of abundance and optimism.

However, from 1982 on, interest rate hikes and imbalances in the trade balance triggered a crisis that lasted until the early 1990s. During this time, the debt burden became unsustainable, the level of productive activity plummeted, and real wages contracted because of widespread inflationary processes. All this led to an unprecedented stagnation of output per capita and a reversal of the economic and social indicators known in literature as “the lost decade of Latin America and the Caribbean”.

This crisis meant not only strong instability, but also a long period of adjustments and reforms focused on laying the foundations for sustainable economic growth. Fundamentally, the measures focused on reducing government spending to consolidate public finances, facilitate the return of capital, and initiate a marked process of trade opening that would drive insertion into international economic circuits.

This last policy area would not only improve the trade balance and expand target markets, but also deepen the process of structural change to increase the levels of regional productivity and competitiveness.

However, there was little progress and at present, in Latin America and the Caribbean, many of these challenges are still pending tasks within a global context that is continually undergoing profound transformations.

Proof of this is the fragility of the economic performance evidenced by the fall in commodity prices in 2014 and the region’s lack of capabilities to recover leveraged in alternative productive activities.

Faced with this, discussions for the design and implementation of policies that paved the way for the region towards a path of more growth revived, putting at the centre of reforms the needs for technological innovation and productive diversification to scale up at the links of global supply chains.

However, the results of these efforts have not been as expected. In 2019, economic growth in Latin America and the Caribbean averaged just 0.6% because of the low levels of productivity, international trade tensions, falling commodity prices and low export complexity.

Amid this challenging context, the countries of Latin America and the Caribbean face the worst economic crisis since statistical records of national accounts began in the 1950s. Estimates of major international organizations have predicted that by 2020 the regional economy will fall by -9.4% and 15% of formal jobs will be lost.

Due to this profound fall in activity, alarms have already been raised about the emergence of a “new lost decade for Latin America and the Caribbean” between 2015 and 2025, bringing with it serious economic and social consequences.

However, unlike the debt crisis of the 1980s, the affectation of all countries on the planet in the current circumstances will result in the generation of significant changes in international economic dynamics, requiring a process of reflection by the countries of the region in order to rethink their role as global players.

In particular, the changes in the dynamics of international trade and value chains could provide opportunities for further internationalization and rethink regional integration. The difficulties of these turbulent times can become catalysts for consensus, to undertake an agenda of actions that will definitely allow us to overcome of pre-existing and pandemic challenges.