THE COVID-19 pandemic has still not 1 peaked in Latin America, and it is likely to last for several more months. Apart from the toll in human lives, the virus and the efforts to fight it through lockdowns have hammered economies and forced tens of millions of Latin Americans into poverty. The IMF expects the economy of the region (including the Caribbean) to contract by 9.4% this year, with only a moderate recovery next. Harder to divine are the political implications of this hardship. But if history is a guide, they will be great. Latin America has seen slumps on this scale only twice in the past century. The first was triggered by the Wall Street crash of 1929. By 1932, many of the region's economies had shrunk by 20% (and 40% in the case of Chile and Cuba). Export earnings and investment collapsed. In most cases recovery came only in 1933. The second slump was in the 1980s, when a string of countries defaulted on their foreign debts after international interest rates soared. For Latin America as a whole, GDP per person shrank by almost a tenth between 1981 and 1983. Recovery was much slower than in the 1930s. The 1980s became known as the "lost decade".
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