A Latin American economic tragedy

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WHERE COVID-19 strikes, it reveals hard truths. In recent weeks Latin America has become the centre of the pandemic, responsible for over half of daily deaths. The region’s acute health crisis is accompanied by an economic decline unrivalled in the developing world. The IMF forecasts that output in the region will shrink by 9.4% in 2020, more than three times the contraction of 3% projected for emerging economies as a whole. The economic and social devastation wreaked by the pandemic is all the more painful for coming on the heels of two underwhelming decades. Investors had waxed enthusiastic about Latin America’s prospects during the great emerging-market boom of the 2000s and the 2010s, only to be disappointed. The few gains that were made seem almost certain to be reversed.

The economies of Latin America are far from homogeneous. Many share characteristics, however, that have conspired to make the region among the hardest hit in the world. In some places lockdowns have been...