Living with the virus while waiting for the vaccine

The Covid-19 pandemic has led to hefty costs in terms of human lives and the strong measures needed to slow its progression it have dramatically depressed economic activity. While an effective vaccine remains the best hope to emerge from this crisis, it is by now clear that countries in Latin America and the Caribbean may have to wait for months, perhaps years, before this happens. In the meantime, prolonged lockdowns may become increasingly untenable. But strategic decisions on health policy and economic policy could help mitigate the costs. Expanding the coverage of quality health care and keeping medicines affordable should help on the health front. Encouraging formalization in a way that does not penalize employment generation, and gradually recreating fiscal space would reduce economic costs.

Living with the virus while waiting for the vaccine More than nine months into the pandemic, the hopes for a full return to normalcy are pinned on vaccines. The scale of the global effort to support cutting-edge research and to fund production capacity is unprecedented. However, it may take time for effective vaccines against Covid-19 to be developed, to be produced in sufficiently large quantities, to become available at local levels in developing countries, and to be viewed

as sufficiently safe by the population. Given these challenges, countries in Latin America and the Caribbean may face no choice but to live with the virus.

Many countries in the region have gradually relaxed quarantines and lockdowns, either through explicit policy decisions or because stringent containment measures are becoming increasingly difficult to enforce. Across the 13 countries in Latin America and the Caribbean that are covered by the rapid telephone surveys conducted by the World Bank (2020a), the share of respondents not satisfied with their government’s handling of the crisis increased between May and July 2020. In some of the countries, the increase was substantial (figure 25).

In this context, governments may need to focus on protecting the most vulnerable while adjusting health and safety standards across all sectors and activities, so that the probability of contagion remains low while

life goes on. Schooling is among the activities that deserves the most attention. Distance learning, even if feasible, is unlikely to deliver the same knowledge as face-toface teaching. For many children in the poorest segments of society, it may simply not be an option. If lockdowns continue to affect the education sector for too long. many children may never return to school, entering their working lives earlier than anticipated.

Figure 25. Support for the government's response to the pandemic is eroding

Not satisfied with the response (percent) 100

80

60

40

20

0

Chile Ecuador Mexico Bolivia Honduras Dominican Republic Peru Colombia Argentina Round 1 Round 3 Note: Based on household members 18 years old and above. Round 1 was between May 21 and June 1, and round 3 between July 18 and 26. Source: World Bank (2020a). Guatemala El Salvador Paraguay Costa Rica