Dig­i­tal trans­for­ma­tion can help Latin Amer­i­ca and the Caribbean (LAC) re­gion re­cov­er more quick­ly from the COVID‑19 cri­sis, ac­cord­ing to the Latin Amer­i­can Eco­nom­ic Out­look (LEO) 2020: Dig­i­tal Trans­for­ma­tion for Build­ing Back Bet­ter.

LEO 2020 doc­u­ments the pan­dem­ic’s dra­mat­ic im­pact on the most vul­ner­a­ble and mar­gin­alised.

Ac­cord­ing to the re­port, mi­croen­ter­pris­es have been hit par­tic­u­lar­ly hard with 2.7 mil­lion of them like­ly to close, re­sult­ing in the loss of 8.5 mil­lion jobs.

On the eve of the cri­sis, 40 per cent of work­ers in LAC economies did not have ac­cess to any form of so­cial pro­tec­tion and 60 per cent worked in­for­mal­ly.

“We ex­pect more than 45 mil­lion ad­di­tion­al peo­ple will fall in­to pover­ty. The so­cio-eco­nom­ic cri­sis makes a new de­vel­op­ment mod­el more ur­gent than ever. Dig­i­tal­i­sa­tion could be a pow­er­ful tool to over­come the struc­tur­al chal­lenges of the re­gion, on­ly if it is con­sid­ered as a com­pre­hen­sive way to fos­ter pro­gres­sive struc­tur­al change, through poli­cies for the gen­er­a­tion of new sec­tors, qual­i­ty jobs, the de­vel­op­ment of ca­pac­i­ties and in­no­va­tion,” said Ali­cia Bárce­na, Ex­ec­u­tive Sec­re­tary of ECLAC.

“The cri­sis has cre­at­ed the mo­men­tum for long-over­due re­forms that can help spread the ben­e­fits of dig­i­tal trans­for­ma­tion to achieve in­clu­sive and re­silient growth. It al­so high­lights the ur­gent need to bridge the dig­i­tal di­vides be­tween ter­ri­to­ries, fam­i­lies, stu­dents, work­ers and firms”, said Án­gel Gur­ría, Sec­re­tary-Gen­er­al of the OECD.

Ac­cord­ing to LEO 2020, the cri­sis is ex­ac­er­bat­ing a set of in­ter­linked, struc­tur­al chal­lenges, in­clud­ing high in­equal­i­ty and in­for­mal­i­ty, low pro­duc­tiv­i­ty, and de­fi­cient pub­lic ser­vices and in­sti­tu­tions.

The good news is that dig­i­tal trans­for­ma­tion can help LAC economies out of the cri­sis by stim­u­lat­ing busi­ness in­no­va­tion and new con­sump­tion mod­els, trans­form­ing pro­duc­tion sys­tems and val­ue chains, re-or­gan­is­ing eco­nom­ic sec­tors, and in­tro­duc­ing new con­di­tions of com­pet­i­tive­ness. Dig­i­tal tools can al­so sup­port bet­ter ac­cess to ser­vices, in­clud­ing health and ed­u­ca­tion. Fi­nal­ly, they can help im­prove gov­er­nance, putting cit­i­zens at the cen­tre of pol­i­cy­mak­ing.

The re­port is joint­ly pro­duced by the De­vel­op­ment Cen­tre of the Or­gan­i­sa­tion for Eco­nom­ic Co-op­er­a­tion and De­vel­op­ment (OECD), the Unit­ed Na­tions Eco­nom­ic Com­mis­sion for Latin Amer­i­ca and the Caribbean (ECLAC), CAF De­vel­op­ment Bank of Latin Amer­i­ca and the Eu­ro­pean Com­mis­sion.

—Joel Julien