Issue - March/April 2022
LATIN AMERICA AND THE CARIBBEAN
An Overview of Latin America in the Wake of the Pandemic
By Freddy Paxton, Chief Marketing Officer, Paxton International
It will be wonderful to jump back on a LAM, TAM or AVIANCA flight and be back in Latin America. Latin America is always growing and thriving, and in terms of the pandemic, many Latin countries have come back slowly but strongly. The top countries for migration into Latin America in the past few years, even factoring in Covid, have been Argentina, Brazil, Columbia, Chile, Mexico, and Peru. The top immigrants to Latin America are coming from the USA, Europe, China and Cuba. (Source: IADB DATA MIG database). The hardest part of the migration process there has become the global shipping delays, both in and out of Latin America. The culprits are the same as they are across the world: congestion, Covid delays, trucker shortages and limited container availability. We all have experienced it, not least in the form of higher prices.
Many Latin American ports have seen delays due to the global shipping crisis, and some shipping lines have been bypassing their usual ports; for instance, missing Buenos Aires and going to Sao Paolo or Rio. It has been an unusual time, not only due to COVID-19 and the worry of spread, but also to changes in climate that have caused some delays, in and out of the interiors of Latin America.
Climate Change—just as we are constantly seeing fires in the west of North America, Latin America is experiencing this also. Take, for example, Paraguay (see photo)—there, the country has been experiencing similar destruction of its forests, and its main road artery to the local ports is too low on water to permit regular travel. The delays seem endless.
In speaking to the U.S. Embassy in Asuncion, they said, “Unfortunately, this situation is causing all incoming and outgoing cargo (HHE and POV) to continue suffering delays in arrival to the country and in departures. On top of that, the shipping lines are short of containers. Also, since January began, we have been having very hot days—between 104F and 113F—that worsen forest and field fires and leave cattle dying of thirst or in the fires, and more.”
COVID-19 rebound—When looking at vaccination rates, Peru is 70% vaccinated, Brazil is 72% vaccinated, Argentina 80% vaccinated, Chile 90% vaccinated, Ecuador is 76% vaccinated, Columbia is at 64% and Venezuela is at 50%, while other locations like Paraguay and Bolivia are reaching for 45% fully vaccinated. (Google World Data). The doors to Latin America are opening for exports, imports and the return of the tourists. The Inter-American Development Bank offers an online dashboard giving border status updates and Covid solutions maps for those looking to leave for a Latin American destination today: www.IADB.org/en/coronavirus/briefings-and-dashboards.
There is a lot of good news on the horizon, and the Latin Spirit and positive attitude will help the rest of the world pull out from this crisis—and of course, an injection of investment with the Latin drive will also help.
Investment—The Inter-American Development Bank is investing more than ever in Latin America, with its private sector arm, IDB invest, investing a record amount of $23.4 Billion dollars. The new record includes “approvals for priority areas for the region’s recovery and sustainable, inclusive growth including health and the Covid-19 response, climate change, supply chains and digitalization.” (IADB.org/en/news)
When it comes to shipping delays, we may see them continue well into 2023 and maybe into 2024. In the absence of additional shipping capacity, delays in supply will continue to pressure tariffs and importers and exporters continue to pay premiums just to secure space on important routes. Those with long-term maritime contracts from 2020/2021 won´t be able to move containers without paying premiums, and many Latin American exporters are extremely worried. We know we will come out of this; the big question is when and how quickly we can arrive back at a the new normal and what it will look like in Latin America.