In the second half of this year, the United States will host the Summit of the Americas, the triennial hemispheric meeting of presidents and heads of state. This is the second time the summit will be held in the U.S. since the inaugural event in 1994. The gathering comes at a precarious time, with Latin America and the Caribbean (LAC) experiencing what is likely the worst economic and social crisis of its modern history, and politically divided as probably never before.

The summit offers a unique opportunity to address this predicament and move forward with a common hemispheric vision and program to revitalize LAC and support the vital contributions the region makes to the global economy and planetary health. But this will require both skillful diplomacy and a sustained commitment from the countries of the Americas.

Challenges facing the region

Even before the COVID-19 pandemic, the LAC region was facing serious economic, social, and political problems, some structural, and some as a result of the downturn of the commodity cycle of the 2000s.

Though LAC falls on average into the upper middle-income category of developing regions, it lags more developed countries, with significant gaps in human capital (particularly education), social inclusion and equity, science and technology, infrastructure, and institutional quality of democratic governance.

Recent social and political upheavals, mainly in 2018 and 2019, have compounded these longstanding problems, impacting countries across the region with very different political orientations. This broad-based social unrest can be better understood taking a wider view of the global macroeconomic context—in particular, commodity cycles and how they impact LAC’s unequal and unjust societies.

Both the most recent commodity cycle in the 2000s and the previous one spanning the mid-1970s to the late 1980s (which I examined in more detail here) generated periods of significant per capita income growth followed by several years of economic stagnation and social upheaval. But while the economic the 1980s downturn generated opposition to many of that era’s military dictatorships, helping to launch a period of democratization, the recent downturn is undermining democracy, particularly in places like Venezuela, where a human and political tragedy continues to unfold.

Pandemic impacts

The COVID-19 pandemic has made this difficult situation significantly worse. Today, LAC is suffering its more dramatic health and economic crisis in more than a century. As of early February, according to data from Johns Hopkins University, the region accounts for 27% of total global pandemic deaths, while representing only 8% of the world population. The regional economy is estimated to have contracted by about -8% in 2020, according to International Monetary Fund data, and the expected recovery of about 3.6% in 2021, besides keeping GDP far below its 2019 level, may be too optimistic. 

Poverty, which before the pandemic affected some 140-150 million people (at the poverty line of $5.50 of purchasing power equivalent per capita/day), is estimated to have jumped by 50-70 million people in 2020, with little prospect of improvements in 2021.

These problems have global consequences, and particularly for the Americas as a whole. Economic pain and political instability often lead to increases in migrations (with related humanitarian and public health impacts), drug trafficking and international crime, and illicit financial flows. Venezuela, in many dimensions a failed state, has effectively become a space where malignant actors can freely operate, causing many woes for its neighbors. Deteriorating economic conditions in the region may lead to negative spillovers in financial markets as well, if some of the more vulnerable countries suffer further debt problems.

LAC is also crucial to the health of the global environment; its vast forests are essential carbon sinks and play a role in global water availability, the oxygen cycle, and biodiversity. All those areas are under pressure. The region is also the main food net exporting block (accounting for more than the combined value of U.S., Canada, Australia, and New Zealand exports). Ensuring that both global environmental and food security roles operate harmoniously will require sustained investments in technology and governance of natural resources (Díaz-Bonilla, 2019).

Finally, LAC is an important supplier of fossil fuels, but also has enormous potential as a source of clean energy. How the countries’ economies transition from one to the other will also have global implications.

Summit priorities

The Summit of the Americas presents a vital opportunity to make the case for investments in growth, environmental health, food security, social well-being, and strengthening democracy. As host country, the U.S. will lead the discussion. However, the Biden administration is facing its own urgent domestic and international challenges, starting with controlling the pandemic and reactivating the economy. LAC countries should not expect solutions to come from outside; nor can these issues be solved bilaterally by each country with the United States. Rather, the Americas need a joint vision for peace, prosperity and democracy.

Here are some key priorities:

• Pandemic management (distribution of vaccines, medicines, and equipment) and the subsequent recovery process.
• Defense of democracy and human rights, including eliminating the mechanisms of financial and institutional corruption that contribute to LAC’s enormous social inequalities.
• Migration, not only towards the U.S., but also populations displaced by the Venezuelan collapse and from other stressed areas.
• Financing mechanisms for economic recovery and development, from addressing worsening debt problems, to facilitating the near-shoring of value chains in the region, to the dramatic changes in labor markets because of the digital economy and automation. This will require a clear vision for the future of the Inter-American Development Bank, along with contributions from other financial organizations such as the IMF, and dedicated schemes of capital mobilization to encourage greater private investments in LAC.
• Collaboration in science and technology to foster the clean energy transition and to better coordinate the region’s important global functions as leading net food exporter, a major supplier of non-food raw materials, and a crucial source of many global environmental goods.
• Regional integration, including its macroeconomic, commercial, infrastructural, and institutional aspects.

If LAC countries were able to reach such a “great agreement,” many possibilities would open up: Dialogue with the U.S. and Canada would be much more effective, helping to implement a hemisphere-wide program of cooperation that could also be extended to partners in Europe and Asia—and enabling the LAC region to escape its current predicament.

But the current reality is harsh: LAC countries are more divided than they have been in decades (if ever), and governments (which are also struggling with the pandemic) will find it politically and operationally difficult to come together and agree on a reasonably comprehensive plan. 

A two-track approach?

To overcome those obstacles, in its role as host the U.S. could consider a two-track approach: One for carrying out the formal diplomatic consultations and another, informal track with a small group of influential people from the region. This approach has proven successful before, most notably in the consultations that led to the creation of the Alliance for Progress in the 1960s. The Biden administration could follow President John F. Kennedy’s example, convoking a small group of people from the region experienced in development, politically independent and widely respected, and committed to help formulate the joint program LAC countries urgently need.

For such a program to move forward, the summit should also consider the roles of all the international agencies operating in the region. Currently, these institutions (plus the bilateral aid agencies) tend to function separately with a large number of individual projects, which may or may not add up to the scale needed to address the challenges LAC countries confront. The work of the Joint Summit Working Group (JSWG), with 13 Inter-American and international institutions, is a start, but it does not include all the key institutions for the region.

The summit offers an opportunity for these institutions to develop programmatic areas in which all can systematically collaborate, while respecting their own mandates.

The challenges that LAC now faces are too deeply ingrained in the region’s history, and the threats they present to global democracy, food security, and environmental stability are too great for half measures. At this moment of global uncertainty, the 2021 Summit of the Americas offers the best, and perhaps the last, opportunity to come together to address these problems.

Eugenio Díaz-Bonilla is Head of IFPRI’s Latin American and Caribbean Program. 

Stay tuned for an upcoming IFPRI event on the 2021 Summit of the Americas.