May 1, 2020

The Outsized Impact of COVID-19 in Latin America

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The Outsized Impact of COVID-19 in Latin America

100 days. This is the time separating the very first case of a person showing symptoms of contamination by COVID-19 in Wuhan, China, and a person infected by the same virus in São Paulo, Brazil.  

The biggest city in the Southern Hemisphere is now also known for being one of the most impacted locations in Latin America by the pandemic—an unflattering title also shared by Lima (Peru), Guayas, (Ecuador), Santiago (Chile), and Mexico City (Mexico) in the Northern Hemisphere. 

Combined, the five Latin American countries represent three-quarters of all confirmed cases, with an approximate total of 178,000 to datea haunting number, and not far from the 301,000 cases in New York City (as of the date of this blog posting).  

Sao Paulo.jpgPolitical commentators view the numbers with certain skepticism considering how loose the framework for reporting cases currently is.  Brazil, for example,has chosen to test for COVID-19 cases only when patients exhibit severe symptoms. In Venezuela, there are concerns about the current federal government leveraging a restrictive 2017 social media law to suppress the sharing of information on the spread of the virus in the country.  

While the reporting of the COVID-19 numbers may seem convoluted, the route being followed to avoid further spread of the disease does not differ much from the ones adopted in Europe or North America. Even in countries where the original approach was less severe and the pandemic was not taken as seriouslylike Brazil and Mexicothe order now is for quarantine and the adoption of even more stringent measures. Argentina, for example, has made wearing masks compulsory, while Chile, Peru, Dominican Republic, Guatemala, and Honduras announced a nightly curfew.  

Restrictions around international travel and large gatherings, the closing of schools and universities, partial or total social distancing, and the decrease of economic activities is now a reality in every country in Latin America. 

Some would say that observing such drastic measures is not merely an option but a necessity in Latin America due to the lack of healthcare infrastructure in some countries. It has been difficult to understand the facts: contradictory messages from governmental leadership challenge the population and private entities to find a clear direction on how to proceed and what the future holds. 

Brazil is a solid example of that. President Bolsonaro, who has struggled to maintain popularity levels for the past year, seemed to start enjoying some public approval upon choosing Luiz Henrique Mandetta, Minister for Health, as the frontman to manage the COVID-19 crisis. The Minister—known for his harmony with W.H.O. directions—soon fell from grace with the President, as the two politicians differ on their approaches on how best to quarantine.  

Bolsonaro, who has consistently suggested that the non-implementation of quarantine measures should help avoid some of the economic distress, fired the Health Minister and publicly disagreed with Governors highlighting the political aspects of the crisis.  

Inconsistencies like these, which are not exclusive to Latin America, add another layer of complexity as companies attempt to strategize for the future. Similar to other regions, the pandemic has more severely affected the industries of travel and tourism, entertainment, traditional retail, as well as the automotive industry and some segments of the real estate market—a clear contrast to the expansion of e-commerce, logistical solutions, and quarantine-friendly technologies. 

Colombia Financial center.jpgWith the political turmoil of 2019, 2020 was expected to be a pivotal year in Latin America for its economic recovery. It was the year that the citizens of Chile, Bolivia, and Colombia took to the streets to protest against social inequality, and it was the year in which six countries elected new Presidents. Now, Alejandro Werner, Director of the Western Hemisphere Department of the International Monetary Fund (IMF), believes the long-awaited recovery may be delayed. In a recent blog post, he indicated that disruptions to the global manufacturing supply chains, a decline in commodity prices and the demand for them, plus a collapsed tourism industry is “bringing activity to a halt in many Latin American countries—severely damaging economic prospects.” 

While not all international assignments are on hold, companies headquartered or with operations in Latin America recognized the importance of balancing duty of care with critical business needs. As a result, the relocation of key personnel is being postponed, but not canceled altogether. For moves in progress, Mobility teams and HR departments are collaborating to ensure strategies are created that can serve as a workaround to externally imposed limitations. 

For the clients supported by Cartus Latin America office based in São Paulo, Brazil, getting critical, fast-changing information to clients has been key. The Cartus team in the region has shared daily the updated snapshots of the impacts of COVID-19 on all relocation-related activities. Whether a country´s borders were suddenly closed or customs clearance of personal shipments suspended, these updates are shared with speed and context, so HR can make informed decisions.  

COVID-19 and the respective quarantine measures will forever impact the way companies operate. On one hand, it has made clear once and for all that collaboration and efficiency can happen independently from working physically in the same space. On the other hand, it has also highlighted gaps in several different areasfrom the talent pool and IT readiness to change management. 

Patricia Tavares, Americas Global Mobility Leader for Unilever and founder of Brazil Talks, confirms, Global mobility will still play a major role bridging these gaps. It should be seen as the link between the business needs and the talent pool that is available in other regions—an ability that is even more relevant in times like these as it supports the overall strategy of the company. 

For some, the world enters a new phase with forced digitization. The effectiveness of the remote world is revolutionary, as highlighted by Sergio Rial, CEO of Santander Brazil. “We realize that those who work remotely don’t work less… I have said that the coronavirus ends the industrial age, because all the processes that can be automated will be from now on. 

Indeed, an interesting prophecy for a region driven by close relationships.  

To stay up to date on all things global mobility in the world of COVID-19, please subscribe to our blog. We also invite you to visit the Cartus COVID-19 Content Hub for additional insights, resources, and best practices.

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Posted By

Caio Leal

About Caio

Caio Leal is Client Services Director for Cartus’ office in Brazil. Based in São Paulo, Caio is a lawyer and has more than 12 years of experience in global mobility for the Latin America region.

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