By Eduardo Piña*

The COVID-19 pandemic has paralyzed the world. The rapid and easy spread of the virus has forced the temporary closure of schools, the paralysis of non-essential productive sectors, the closure of borders and the declaration of collective quarantines.

Within this globally shared context, the International Monetary Fund has warned that in 2020 the world economy will enter recession, but added that a rebound in productive activity is likely in 2021.

In Latin America and the Caribbean, the most optimistic forecasts before the pandemic pointed to a slight regional growth of 1.6%. However, profound changes in the conditions of major trading and investment partners, falling commodity prices and, most importantly, the impact of the virus domestically will lead the region to join the negative performance of the rest of the world.

Certainly, it seems that a recession during 2020 is not under discussion, and the efforts made in the economic field should be aimed at minimising the damage left by this emergency.

Vis-à-vis the need for effective action and in view of the unprecedented levels of uncertainty, policymakers have put in place measures that take into account the lessons learned throughout history and adhere to the principles of the assistance programmes to economies in crisis.

In this connection, and as the economist Santiago Franco of the University of Chicago outlines it, interventions can be segmented into prevention and mitigation policies, pursuing at least two major objectives: a) ensuring a minimum daily consumption of the most seriously affected population and b) mitigate the long-term effects of transient shocks.

In order to promote prevention, the measures aim at strengthening health systems, detecting early threats favouring the spread of the virus, social distancing measures and border closures.

In the area of mitigation, the objective is to seek to maintain and enhance social assistance programmes, prioritize public spending areas with an emphasis on health care, support the survival of micro, small and medium-sized enterprises as a major source of employment and ensure macroeconomic stability so as to return to the path of growth in the short term.

In ensuring the success of these measures, digital technologies are a key ally not only with the task of containing the pandemic, but with generating solutions that last after the crisis situation and contribute to overcoming the low productivity and social inequality problems that affect the region. In this regard, working on digitization is a niche in which significant progress can be made that will survive the crisis.

Following is a brief compilation of the areas in which taking advantage of digital technologies is making and could make a big difference in the future:

Dissemination of relevant information and vital recommendations: The use of technological devices and platforms facilitate and speed up communications with citizens in the context of the emergency.
Generation of more advanced diagnosis and treatments: The use of digitization reduces diagnostic wait times, minimizes physical contact in medical evaluations, and progressively improves health care procedures.
Exchange of experiences and best practices: Within a context of globalization and accelerated changes, experiences and best practices allow to maintain the learning process to eradicate the spread of the virus and its consequences.
Continuity of school operations: Digital platforms enable the formation of human capital while maintaining quality and demand standards.
Continuity of operations through telework: In this way, it is possible to maintain the dynamism of enterprises without the physical presence of their workers. Although its development in the past was linked to reducing pollution and energy consumption, countries and companies that have made progress with this strategy can now reap fruit. To get a notion of the challenges in this area, it is estimated that in the United States only 34% of professionals can perform their jobs from home. Without a doubt, the proportion of employees in Latin America and the Caribbean is considerably lower.
Taking advantage of e-commerce: E-commerce platforms have facilitated social distancing, further allowing the operation of economic sectors badly hit by the crisis (with an emphasis on services).

Amid these very complex circumstances, the strategic actions taken during better times in the past must be well valued. Therefore, current efforts should include not only the eradication of the pandemic but also capacity building to accelerate productivity and growth.

*Economist, Specialist of Studies and Proposals

of the Permanent Secretariat of SELA

Taking advantage of digital technologies beyond the pandemic