Digital transformation is key to accelerating post-pandemic recovery in Latin America and the Caribbean, one of the regions hardest hit by the coronavirus and currently showing unequal access to technology, a joint report by international cooperation agencies warned on Thursday.
The report, "Latin America's economic outlook: digital transformation for better reconstruction"The report, prepared by the Organisation for Economic Co-operation and Development (OECD), the Economic Commission for Latin America and the Caribbean (ECLAC), the Development Bank of Latin America (CAF) and the European Commission, was launched on Thursday within the framework of the 75th Annual General Assembly of the United Nations.
The report notes the severe economic impact of the pandemic in Latin America and the Caribbean, which is expected to see a 9,1% drop in its gross domestic product (GDP) this year, according to estimates.
The crisis particularly affects micro-enterprises: Some 2,7 million of them are expected to close their doors due to health restrictions, generating a loss of 8,5 million jobs.
"Going into this crisis, 40% of workers in Latin American economies had no access to any form of social protection and 60% worked informally," the report said.
It is also anticipated that more than 45 million people will fall into poverty.
"The socioeconomic crisis makes a new development model more urgent than ever. Digitalization could be a powerful tool to overcome the structural challenges of the region," said Alicia Bárcena, executive secretary of ECLAC, at the presentation of the report.
"The countries with the greatest digital readiness will be the first to emerge from the crisis," said Ángel Gurría, Secretary General of the OECD.
The path to digital transformation, however, appears complex due to the region's unequal access to new technologies.
In 2018, 68% of the Latin American population used them regularly, almost double the figure from 2010, but well below the OECD average of 84%. Furthermore, while 75% of the richest population in Latin America uses the internet, only 37% of the poorest population does so.
In this context, the report urges countries to close the internet access gap as a first step to drive digital transformation.
ECLAC proposes, among other measures, the delivery of a "digital basic basket» including smartphones, laptops and internet access, which would cost 1% of regional GDP.
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