COVID-19: economic and financial impact of the pandemic

Thank you very much. A very good morning, Mr. Chair of the Permanent Council, Ambassador Léon Charles, Permanent Representative of the Republic of Haiti; His Excellency Rodolfo Solano Quirós, Minister of Foreign Affairs and Worship of Costa Rica; Mr. Secretary General, Luis Almagro; Mr. Assistant Secretary General, Nestor Mendez; esteemed colleagues and members of the Permanent Council of the Organization of American States (OAS); representatives of the international organizations with us today; ladies and gentlemen.

This special meeting, the second that this Permanent Council has held virtually in its history, finds us in exceptional circumstances and obliges us to assess the financial and economic outlook in the face of the COVID-19 pandemic. The Dominican Republic joins in the concern and solidarity of the member countries of the Organization of American States and salutes the constant work of the organizations that devote all their efforts to finding solutions to the COVID-19 pandemic. We salute in particular the Pan American Health Organization (PAHO).

The mitigation measures that have become necessary entail great sacrifices in every sphere and put in check our plans to attain the Sustainable Development Goals (SDGs). The International Monetary Fund (IMF) has stated in its economic analysis this April that the world economy will contract by three percent (-3%), the deepest economic slowdown in the last century. The World Trade Organization (WTO), for its part, projects a reduction in global trade of up to thirty-two percent (32%). The consequences of such levels of economic slowdown will have a profound impact on all countries, on companies and on the whole chain of value creation.

Of course, what concerns us most is that the greatest impact will fall on the most vulnerable and on millions of working families who could be dragged into poverty. The International Labour Organization (ILO) tells us that distancing measures are currently affecting two billion seven hundred million workers, representing eighty-one percent (81%) of the world’s labour force. Unemployment and the lack of household income will force the population to depend on the response capacity of public systems and state institutions. In other words, now more than ever a redistributive social State, capable of covering the basic needs of the population, will again be necessary for the reconstruction that will be required.

For its part, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) indicates that our region faces the pandemic from a discouraging position. The forecasts speak of contractions of between three (3%) and four percent (4%), or even more. In addition, the fall in the economic activity of our main trading partners, the drop in commodity prices, the contraction of global value chains, the reduction in demand for tourism services and the worsening of financial conditions suggest that the number of people living in poverty in the region will rise.

I must point out that at moments such as this, the food security strategies put in place by several countries of the region, among them the Dominican Republic, take on special relevance, and we are ready to share them in a spirit of solidarity. Producing locally more than eighty percent (80%) of the food we consume now allows us greater price stability and a stable supply. Our economy is likewise expected to close the year without falling into recession.

Ladies and gentlemen, this extraordinary calamity calls for forceful, strong and joint action among all the member countries; action that must carry as its banner the warmth of life, the defence of fundamental human rights and solidarity. It is that solidarity that leads us today to call on this plenary and on all the member countries to examine every effort within our reach to prevent a deepening of the impact of COVID-19 on people’s lives and well-being. In this regard, we recommend the creation of a special fund coordinated by the United Nations organizations, in particular the World Health Organization (WHO), the Food and Agriculture Organization of the United Nations (FAO), the World Food Programme (WFP), the United Nations Children’s Fund (UNICEF) and the International Fund for Agricultural Development (IFAD), with the sole objective of fostering the enabling, training and adaptation of the food and health systems of the countries of the world, especially the developing countries.

It is likewise important to stress that the world’s demand for goods and services will be sharply reduced. This will also diminish the capacity of countries to generate foreign exchange to meet their financial obligations. We recommend that all creditor countries and multilateral organizations negotiate foreign debt payment obligations with their debtors, especially with countries that are not members of the Organisation for Economic Co-operation and Development (OECD). We also urge all countries to work together with the other territories of their region on creating mechanisms that promote joint purchases of supplies for the health response to COVID-19 and for keeping populations fed. This global crisis deserves joint leadership equal to the circumstances; leadership in the same spirit of collaboration that gave rise to this Organization. If we succeed in setting this joint action in motion, the hemispheric impacts will be challenges we will overcome, and history will recognize it.

Ladies and gentlemen, I am convinced that we will overcome this crisis. But as important as overcoming it is the manner in which we do so. The speed at which we regain former levels of wealth will depend on how supportive, coordinated and united we remain in taking the necessary action. This pandemic and its effects confront us with an acceleration and transformation of historical processes capable of defining many things we had until now taken for granted. And this crisis may also be a singular opportunity to narrow the gaps of inequality from which our societies suffer. It is therefore important that, in the decisions that will necessarily come in the months and years ahead, our goal be not only to return to the starting point but also to reach a new balance: a balance in which all the people of the world enjoy their rights to the full, in which new opportunities open on equal terms, and in which every home has peace and food.

In short, let us look beyond overcoming this crisis and work to build a new society: a fairer, safer and more caring society. Let us write this new chapter of history together, putting the word humanity first.

Thank you very much.