hen a large country sneezes, smaller countries get a cold, or so the saying about the current globalized world economy goes. Tragically, this analogy fits the current COVID-19 pandemic situation as countries across the world see their economies slow. Due to their size, pundits have largely focused on the slowing American and Chinese economies. However, it is equally important to pay attention to this phenomenon in regional contexts as well. Certain country duos are notorious for economic (inter)dependence. The United States and Mexico are a classic example and economic hardship in the United States regularly impacts its southern neighbor. However, Brazil and Argentina are another example of highly interdependent states in the Americas. Given Brazil’s pandemic-induced economic slowdown and the lack of a national plan to exit the health crisis, what does the future hold for Argentina?
The Argentine and Brazilian economies are intertwined and the pandemic’s fallout in either country would likely impact the other. Undoubtedly, Argentina is a significant trade partner for Brazil, representing the third most important destination for Brazilian exports, behind China and the United States. Argentina dwarfs Brazil’s other Latin American trading partners, importing roughly 132% more than Brazil’s second-largest export market in the region, Chile.
However, Brazil is much more important for Argentina in terms of trade than Argentina is for Brazil. Brazilians are the largest importers of Argentine goods, responsible for roughly 18% of all exports, importing roughly two and half times the amount of China, Argentina’s second-largest export market. In comparison, the Chinese are responsible for only 8.2% of American exports. The Argentines are also heavily dependent on Brazilian imports, which represent nearly ¼ of everything that comes from abroad. China only relies on the Americans for 7.3% of its imports. The consequences of this asymmetric relationship are easily diagnosed. While when Argentina sneezes economically, Brazil might get a mild cold, if Brazil ends up with a mild case of COVID, it would put Argentina in the ICU, connected to a respirator.
As a result, it is in Argentina’s best interest that Brazil quickly recovers from the pandemic-induced crisis. So how is Brazil doing in tracing a path towards economic recovery? Not very well. The only feasible path of recovery is mass immunization of the population. Normally, this would not be an impossible challenge for Brazil as it has one of the most ambitious healthcare systems in the world. However, a major obstacle is stopping the development of a robust, inclusive, and structured national immunization plan: Brazil’s current president, Jair Bolsonaro. The South American leader politicized vaccination; celebrating when trials were suspended, showing no political will to purchase vaccines, and forcing governors to develop their own plans in the absence of a national strategy. While the World Health Organization warns about the dangers of “vaccine nationalism,” in which countries try to ensure doses for the protection of their populations leaving poorer countries without any, Bolsonaro represents a problem on the other side of the spectrum, in which leaders simply do not care about vaccinating their citizens. While most of the population will eventually get vaccinated, the Bolsonaro effect will delay the process, causing thousands of preventable deaths and costing millions of dollars in lost economic performance. This is not a good scenario for Argentina, which risks having its most important foreign market plagued by political and sanitary incompetence.
Argentina needs to convince Brazil of the need to vaccinate its own population, but this task is challenging given that the state of relations between the two countries remains cold due to ideological differences. Working with subnational governments to coordinate a response might be a feasible alternative. With state governors taking on the pandemic response, many states have entered their own agreements for vaccine production and distribution. Most notably, the State of São Paulo is working with Instituto Butantan to produce Chinese Sinovac’s COVID-19 vaccine and distribute it both within the state as well as to other regions of Brazil and even to other Latin American countries. Argentina has been in talks with Butantan and São Paulo to purchase vaccine doses. This is good not only for Argentina, but also for Brazilian states, which will receive needed financial and political support for their vaccination efforts. If this type of international partnership works, more countries are likely to follow suit, further boosting the success of the model.
While Argentina may not have enough power to pressure Bolsonaro to immunize the Brazilian people, if more countries in the region show interest in this vaccine, state Governors could use the publicity for their own presidential bids, which would infuriate Bolsonaro. In this scenario, Bolsonaro might push for the use of other vaccines to prevent increasing the influence of individual governors, which would increase vaccination rates. Yes, it is an unlikely plan, but at the very least it would pressure Bolsonaro into taking vaccination seriously and would ensure doses for not only Argentina, but many other countries in Latin America.
Argentina is in a difficult situation. Its economy is tied to Brazil and will suffer if its neighbor does not find a quick way out of the pandemic induced economic crisis. While a collective response to the pandemic would benefit both Brazil and Argentina, this appears unlikely. However, Argentina may be able to play off of Bolsonaro’s political ambitions and work with state governments to bolster immunization efforts in Brazil. Even if it not completely successful, at the very least it would ensure vaccines for millions in the region.
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The Brazilian Sneeze that Might Put Argentina in the ICU
January 13, 2021
W
hen a large country sneezes, smaller countries get a cold, or so the saying about the current globalized world economy goes. Tragically, this analogy fits the current COVID-19 pandemic situation as countries across the world see their economies slow. Due to their size, pundits have largely focused on the slowing American and Chinese economies. However, it is equally important to pay attention to this phenomenon in regional contexts as well. Certain country duos are notorious for economic (inter)dependence. The United States and Mexico are a classic example and economic hardship in the United States regularly impacts its southern neighbor. However, Brazil and Argentina are another example of highly interdependent states in the Americas. Given Brazil’s pandemic-induced economic slowdown and the lack of a national plan to exit the health crisis, what does the future hold for Argentina?
The Argentine and Brazilian economies are intertwined and the pandemic’s fallout in either country would likely impact the other. Undoubtedly, Argentina is a significant trade partner for Brazil, representing the third most important destination for Brazilian exports, behind China and the United States. Argentina dwarfs Brazil’s other Latin American trading partners, importing roughly 132% more than Brazil’s second-largest export market in the region, Chile.
However, Brazil is much more important for Argentina in terms of trade than Argentina is for Brazil. Brazilians are the largest importers of Argentine goods, responsible for roughly 18% of all exports, importing roughly two and half times the amount of China, Argentina’s second-largest export market. In comparison, the Chinese are responsible for only 8.2% of American exports. The Argentines are also heavily dependent on Brazilian imports, which represent nearly ¼ of everything that comes from abroad. China only relies on the Americans for 7.3% of its imports. The consequences of this asymmetric relationship are easily diagnosed. While when Argentina sneezes economically, Brazil might get a mild cold, if Brazil ends up with a mild case of COVID, it would put Argentina in the ICU, connected to a respirator.
As a result, it is in Argentina’s best interest that Brazil quickly recovers from the pandemic-induced crisis. So how is Brazil doing in tracing a path towards economic recovery? Not very well. The only feasible path of recovery is mass immunization of the population. Normally, this would not be an impossible challenge for Brazil as it has one of the most ambitious healthcare systems in the world. However, a major obstacle is stopping the development of a robust, inclusive, and structured national immunization plan: Brazil’s current president, Jair Bolsonaro. The South American leader politicized vaccination; celebrating when trials were suspended, showing no political will to purchase vaccines, and forcing governors to develop their own plans in the absence of a national strategy. While the World Health Organization warns about the dangers of “vaccine nationalism,” in which countries try to ensure doses for the protection of their populations leaving poorer countries without any, Bolsonaro represents a problem on the other side of the spectrum, in which leaders simply do not care about vaccinating their citizens. While most of the population will eventually get vaccinated, the Bolsonaro effect will delay the process, causing thousands of preventable deaths and costing millions of dollars in lost economic performance. This is not a good scenario for Argentina, which risks having its most important foreign market plagued by political and sanitary incompetence.
Argentina needs to convince Brazil of the need to vaccinate its own population, but this task is challenging given that the state of relations between the two countries remains cold due to ideological differences. Working with subnational governments to coordinate a response might be a feasible alternative. With state governors taking on the pandemic response, many states have entered their own agreements for vaccine production and distribution. Most notably, the State of São Paulo is working with Instituto Butantan to produce Chinese Sinovac’s COVID-19 vaccine and distribute it both within the state as well as to other regions of Brazil and even to other Latin American countries. Argentina has been in talks with Butantan and São Paulo to purchase vaccine doses. This is good not only for Argentina, but also for Brazilian states, which will receive needed financial and political support for their vaccination efforts. If this type of international partnership works, more countries are likely to follow suit, further boosting the success of the model.
While Argentina may not have enough power to pressure Bolsonaro to immunize the Brazilian people, if more countries in the region show interest in this vaccine, state Governors could use the publicity for their own presidential bids, which would infuriate Bolsonaro. In this scenario, Bolsonaro might push for the use of other vaccines to prevent increasing the influence of individual governors, which would increase vaccination rates. Yes, it is an unlikely plan, but at the very least it would pressure Bolsonaro into taking vaccination seriously and would ensure doses for not only Argentina, but many other countries in Latin America.
Argentina is in a difficult situation. Its economy is tied to Brazil and will suffer if its neighbor does not find a quick way out of the pandemic induced economic crisis. While a collective response to the pandemic would benefit both Brazil and Argentina, this appears unlikely. However, Argentina may be able to play off of Bolsonaro’s political ambitions and work with state governments to bolster immunization efforts in Brazil. Even if it not completely successful, at the very least it would ensure vaccines for millions in the region.
