The Development Bank of Latin America announced this Friday that it is issuing bonds for the region’s countries valued at $1.5 billion. It is the largest such bond in Latin America’s history, as countries struggle from the economic fallout of the coronavirus pandemic.
The bonds have a term of five years from the development bank that has backing from 17 regional countries as well as Spain, Portugal and a number of international banks.
“Achieving the highest amount and the lowest coupon in euros in such a challenging context for the region gives us a more competitive margin of action to continue being an unconditional ally when it is most needed,” said Luis Carranza, the development bank’s executive president.
Already the world’s slowest growing region economically before the coronavirus, Latin America is now further behind the eightball when it comes to recovery. In order to get the most out of stimulus-focused bonds like this one, countries will need to come together to support seismic social policies and reforms that will keep more people from sinking into poverty.
“This crisis has been particularly harsh on the poorest and particularly comfortable for the middle class [and] upper middle class,” Carlos Jaramillo, the head of the World Bank’s Latin America office told the Financial Times recently. “It’s become evident in most countries that this is really just not something that should be sustainable for too long.”
But to even begin recovery, the region still needs time to get its caseloads under control. The World Health Organization (WHO) recently said that the worsening situation in Latin America will not fully be contained until 2022 at the earliest, leaving the region’s countries with another calendar year of tough economic setbacks that will affect key industries like tourism.
As vaccines begin to roll out across the world, Latin America still has a lot of catching up to do with richer nations that have bought up more shots. The WHO Director, Tedros Adhanom, said recently that it “keeps the pandemic burning” when developed nations hoard vaccine purchases.
A study released this month by the National Bureau of Economic Research shows that even if developed nations like the United States are fully vaccinated by June – however unlikely scenario – that the global economy would still lose up to $9 trillion if developing nations in the Global South are left with largely unvaccinated populations.
Michael has been a reporter covering Latin America since 2014. He has lived and worked in Costa Rica, Colombia and Mexico. His work from the region has appeared in The Guardian, The Associated Press and Vice.