Latin America and Coronavirus - 26 May 2020

Latin America is losing patience as cases peak.

The emerging storyline this week is how Latin America is losing patience with lockdown measures, even as cases increase.

The early and strict quarantine measures in much of the region successfully “flattened the curve.” That effort in late March lowered the eventual total peak and pushed the peak of the cases several weeks further into the future than if no social distancing were done. Even Brazil and Mexico, where presidents were slow and irresponsible, had some success thanks to local politicians, civic leaders and citizens taking a leadership role. Health systems had extra time to prepare for the inevitable rise in cases. No country in Latin America saw the swift rise in cases, hospitalizations and deaths that occurred in Italy, Spain or the United States.

Above: Chart from Our World in Data using European CDC numbers

There is an alternate universe where Latin America’s actions were delayed by 2-3 weeks. In that hypothetical scenario, there are tens of thousands of additional deaths and several major cities in the region look like Guayaquil at its worst moment with bodies in the streets. In that universe, cases and deaths have already peaked and are now starting to decline as the region struggles to recover from a truly awful disaster.

Latin America has traded a sharp and deadly peak like the ones experienced by Italy or New York City for a long plateau that will be difficult to manage but ultimately better. 

As I wrote last week, the fact our current scenario is far better than the worst case outcome is good news, but provides little relief to those who are watching cases still rise and economies crash. It doesn’t put food on the table for the many in the informal sector who remain out of work. The consequences of flattening the curve is a prolonging of the crisis and the lockdown strategies. After over two months on lockdown, citizens’ frustrations are growing right as the cases peak in much of the region. That’s why there are protests in countries such as Chile and Ecuador.

Another problem in many Latin American countries is that hospital capacity could not increase significantly, even in the flatten the curve scenario. Many large cities are now running out of ICU beds. Even if not as bad as the worst case scenario, the images of excess deaths and mass graves are beginning to hit hard. This is a long term healthcare infrastructure problem in the region that it could not solve in the few extra weeks they gained with lockdowns.

What comes next?

Many of the region’s largest cities are still several weeks away from their peaks, meaning a slow but steady increase in cases and deaths are likely. Hospitals will run at capacity for a long time, straining the healthcare systems. Even those cities and countries that do peak will see a multi-week plateau and a gradual descent rather than a sharp drop in cases.

Some of the region’s political leaders will plead with citizens to remain indoors, but citizens in poor neighborhoods will find that impossible given the fact they have run out of money and food. Localized spikes in cases within the region’s poorest neighborhoods are likely.

Where governments use force to lockdown neighborhoods, protests may push back. Mistakes or abuses by security forces create the potential for conflicts and protests to escalate. 

Prison systems are going to be hit with the virus hard, raising the potential for more prison riots.

Presidents who have gotten approval boosts from their response to the virus may not be able to maintain those high approval ratings. Saying they avoided the worst case scenario may not be enough to maintain popularity.

Key variables to monitor will be the rise of cases and deaths in Brazil and Mexico. Given the poor federal response in both countries, it is likely (though not certain, there are a lot of variables and unknowns on this issue) there will be a longer rise and a higher peak contrasted with much of the rest of Latin America.

Another topic to monitor will be the issue of second waves in Asia, Europe and the United States. Latin American countries and presidents, if they choose to, will once again be able to learn from the experiences other countries have in lifting their lockdown rules and reopening their public areas. 


Thanks for reading

Please feel free to reply to this email with comments and questions. The usual free Latin America Risk Report newsletter will be published on Thursday morning. If you were forwarded this and would like to receive the free weekly newsletter, please enter your email at http://boz.substack.com