After some false starts and questions of access to vaccinations, the growth in vaccination rates across The Americas has elevated the optimism about the region’s economic recovery. Recently, Carissa F. Etienne, Director of the Pan-American Health Organization (PAHO), said that Latin America and the Caribbean is on track to reach the World Health Organization’s Covid-19 vaccination target of 40% before the end of the year.
However, this success is not equally distributed. Some countries are struggling to accelerate the pace of vaccination, influenced by two primary factors: a lack of access to vaccines and lack of trust in those vaccines. This reality threatens the prospects for recovery of certain countries, and anticipates deepening regional economic inequality within The Americas.
Nearshore Americas asked industry leaders across the region how their country has been successful in its recovery efforts and how effective legislation has contributed to that recovery. We also asked how some countries overcome vaccine hesitancy while others trail behind.
Costa Rica’s “Long-term” Approach
Costa Rica, with its institutional strength, political stability and qualified workforce, has long been praised as an exciting Nearshore destination. For many investors the Central American nation’s no-nonsense mentality of ‘doing what is required’ has also been a key motivation there.
Costa Rica has applied this same mentality to face the pandemic.
“It’s all about long-term thinking,” said Augusto Arce, a managing partner with the GLC Abogados law firm in Costa Rica.
For Arce, who represents foreign investors’ interests in Costa Rica, the country’s institutionalist approach remains instrumental to keep attracting the attention of business leaders.
“We’ve seen how sometimes it looks like the health minister is the one running the country. There is a lot of respect among the political class and general population for public health and the measures implemented to protect it. By emphasizing the country’s health needs the economy takes a hit, but we keep betting on the strength of a diversified economy. It helps that this country is so respected internationally as a stable jurisdiction,” said Arce.
Instead of rushing to reopen the country to build a sense of pre-Covid normalcy, Costa Rica is legislating its way out of the pandemic-induced economic crisis.
Though Costa Rica put in place a law regulating telework in 2019, Covid-19 created the actual space for mass implementation.
“Our respect for institutions makes us go through the bureaucratic path sometimes, but in this case everyone understood the need to implement this legislation quickly,” added Arce.
Costa Rica’s technological capabilities also helped in the transition to remote work. “We were already a highly-digitalized society. This allowed us to not only maintain productivity but actually create new jobs and attract foreign investment. We see all these major companies adapting their HR practices to accommodate these new needs,” Miguel Lopez Abarca, Managing Partner at Costa Rica-based Recluta Talenthunter, an executive search and talent management firm, told Nearshore Americas.
“During the last three months, various companies have announced an increase in hiring, many of them in the technological sector and through Free Trade Zones, which have become an important tool to maintain the levels of investment,” Lopez Abarca explained.
The flexibility of these and other legislations, such as the digital nomads law, along with new incentives for foreign investors, put Costa Rica in a good position for robust long-term recovery. Even though the country has faced its own share of vaccine sceptics, government campaigns to educate the population, a vaccine mandate for the public sector and an understanding of the economic impact of a delayed recovery, helped Costa Rica to overcome the obstacles that even today keep other Latin American countries lagging behind in vaccination rates.
Unequal Recovery for Latin America & Caribbean
Colombia is another great example of a country well positioned for post-Covid economic recovery. Colombia has remained an attractive market to invest in during the pandemic, with investment from call center and BPO operators particularly strong. Part of Colombia’s success resides in the fact that its economy has been mostly open during the last year even while strict lockdowns have been imposed in parts of the country, including Bogota.
“Colombia’s economy opened a long time ago. Personally I’ve been travelling since the beginning of this year. This gives us an advantage in many economic activities, particularly when compared with other South American countries,” said Mauricio Velásquez, managing director at Bogota-based Velásquez & Company.
The growing interest of outsourcing providers to explore Colombia as a location is elevating the role of the BPO industry in the country. “During the pandemic, the BPO industry became an essential sector, we added new jobs and opportunities. I think the industry was very efficient in working with the government to implement regulations and policies to accommodate the new reality. I think that the industry is a very important part of the recovery,” added Velásquez.
Colombia’s vaccination rate increase, without mandates, has helped promote the South American nation’s profile as a prime Nearshore location. This is happening while Mexico, a major regional competitor, falls far behind its peers in its vaccination efforts.
But Mexico’s issues with vaccinating its population are being replicated across the region. According to PAHO, six countries have yet to reach 20% of their populations: Jamaica, St. Lucia, St. Vincent and the Grenadines, and Haiti in the Caribbean, and Guatemala and Nicaragua in Central America.
The Caribbean is being impacted by vaccination hesitancy, which has slowed recovery prospects. Jamaica, a country that has highlighted the BPO industry as one of its priority sectors, has vaccinated less than 15% of its population. Even Caribbean islands with better rates such as Barbados are facing the same problem.
“There is an increase in vaccine hesitancy,” said Alicia Nicholls, a Barbados-based international trade specialist.
“Barbados is having a surge in cases. The government has been able to ramp up vaccination rates but we’re also dealing with a segment of the population that is clearly anti-vax. Even though we’re not completely close, the current situation doesn’t allow us to accelerate a reopening,” she added.
The examples of countries like Costa Rica and Colombia show that there is no ready-made method for recovery. But they prove that there are certain necessary elements that every country must apply if it is to move towards economic reopening. Vaccine coverage is one of them.