The COVID-19 pandemic has had a major impact on all regions of the world. Personal and social damage apart, the world economy has contracted in a way never seen since the last century’s Great Depression.

Social damage has been particularly high in Latin America and the Caribbean, which has registered an immense death rate per million people.

There has been no effective policy to contain infections in this region. With government machinery mostly paralyzed, social distancing measures were not implemented properly, leading to a substantial fall in economic activity. Peru’s GDP fell by 27.2 percent in the second quarter, Brazil’s 9.7 percent, Chile’s 13.2 percent, Mexico’s 17.1 percent and Colombia’s 14.9 percent.

Elsewhere, immediately after the pandemic was confirmed in China, the country locked down the city of Wuhan, Hubei province, managing to contain its spread. After falling 6.8 percent in the first quarter, China’s economy grew by 3.2 percent in the second, the best result among G20 economies.

Worth mentioning is that the LAC’s economy could have been worse but for China’s rapid recovery. While exports to the United States, Europe, Japan and intra-regional markets fell sharply, Chinese demand for soy, iron ore, meat, copper and other commodities prevented LAC’s foreign trade from collapsing.

Argentina’s exports to China in the first half grew by 20.6 percent, while sales to Brazil, the US and the European Union fell 31.7 percent, 22 percent and 19.7 percent respectively. Growth projections for LAC economies in 2020 are not promising. The Economic Commission for Latin America and the Caribbean estimated in April that the GDP for South American countries would see an average drop of 5.2 percent, Mexico and Central American countries 5.5 percent and Caribbean countries 2.3 percent. These are reflected in a significant increase in unemployment, the increase in poverty, and worsening of the already weak fiscal situation in LAC economies.

Against this backdrop, the question is how political, economic, and social strategies should be organized to help overcome this crisis. Making matters worse, the per capita income in LAC economies has been stagnant since the 2014 commodity crisis, companies show overcapacity and governments are left with little fiscal margin to introduce corrective policies. This is aggravated by many countries following austerity measures when the situation demands increased public spending, as noticed in the EU’s paradigm shift of approving a 750 billion-euro (US$886.36 billion) aid package for countries most affected by COVID-19. China, the US and other large economies are doing the same.

Even if this logic is reversed, that countries can escape this situation alone is doubtful. International cooperation is exceedingly important for the recovery of LAC economies. Normalcy in everyday life hinges on the development of an effective COVID-19 vaccine. China’s pronouncement of making the vaccine a “public good” is promising.

The second stage concerns normalization of international trade, particularly overcoming the economic and political barriers being erected by important countries. The break in production chains cannot be a justification for dismantling globalization. It is necessary to strengthen multilateralism and organizations so that economic and trade issues are not overly politicized. The world economy’s recovery needs greater, not lesser, integration.

Resuscitating the LAC economies can involve promoting investments in infrastructure to generate jobs and income while building the foundations for more sustainable development, as prescribed by the 2030 Agenda for Sustainable Development. Clean energy and the potentials of the Fourth Industrial Revolution — 5G, automation, the internet of things — can contribute to economic renewal, utilizing the crisis as an opportunity to move forward.

In this regard, the Inter-American Development Bank can become a key catalyst for resources and a source of expertise for the creation, financing and control of large infrastructure projects. Considering that its structure includes “non-borrowing” members including the US, Canada, European countries, China and Japan, it can be a space for cooperation for Latin America’s recovery and development. The IDB can also work with other multilateral investment institutions, such as New Development Bank, US Development Finance Corporation, Corporacion Andina de Fomento, and national development banks for capital accumulation and project structuring.

China’s Belt and Road Initiative and the US’ Growth in the Americas strategy could be coordinated and not be a zero-sum game as the US government wants. Recently, the US government circumvented an unwritten rule in appointing Mauricio Clever-Carone as the new IDB president to control LAC’s recovery agenda.

Considering the need for greater post-pandemic coordination, the US’ nomination has been resisted by Latin American governments. Even the EU suggested postponement of the choice till March 2021.

Unfortunately, given how Washington is harming unilateralism, instead of necessary collaboration, we will see increased competition, in which the US will try to impose the current version of its secular Monroe Doctrine. Cooperation, the key to LAC economies overcoming the crisis arising from the pandemic, could be delayed, or lost.

The author is a professor at the Sao Paulo State University (UNESP) in Brazil. The author contributed this article to China Watch, a think tank powered by China Daily. 

The views do not necessarily reflect those of China Daily.