Rebeca Grynspan: "I think Peru will be in very good hands with Francisco Sagasti"

Rebeca Grynspan analysed the situation in Latin America and the difficult situation the continent is going through during Atalayar's programme on Capital Radio. The Costa Rican believes that the help of international organisations is very necessary in order to tackle this issue from the standpoint of multilateralism and cooperation.

How is the Ibero-American continent now coping with the coronavirus?

In economic terms, we are the second most affected region in the world after Europe, but we do not have the instruments Europe has to overcome the crisis. That is why we are really concerned about the situation in the region. The governments have taken all the measures that have been possible, but unfortunately this pandemic has caught us on the wrong foot in Latin America, because we have had low growth for several years and furthermore our living space to be able to respond to the crisis is much smaller today than it was in 2008. We are hopeful, because there is also good news in the region, not just bad. I believe that the elections in Bolivia and the referendum in Chile are good news. Because a situation of great social conflict has been able to be channelled in an institutional way and therefore in a peaceful way, but the suffering of Latin American citizens will be very deep if we do not have international aid.

You say that Latin America will not be able to emerge from this crisis alone. How would you quantify this and where would this aid come from that Latin America should receive to combat the consequences of the coronavirus?

I can give you one piece of information: according to the projections we have today, on 1 January 2021, we Latin Americans are going to wake up with the same extreme poverty as we had in 1990, which means a thirty-year decline. And we all know that extreme poverty in Latin America means hunger, because we do not have the social protection and social security systems that European countries have. When I say that Latin America cannot go it alone, what I mean is that the international financial system is going to have to make available to these countries the same set of instruments that it made available to the world in 2008, where very strong and rapid action was taken by the IMF, the development banks, the G20, and the international cooperation community. While there is a lot of will, and I do not doubt it, the truth is that in this crisis the same decisions have not been taken with the same force and intensity as they were then.

How does the Ibero-American General Secretariat envisage changing relations between the world and, specifically, Latin America and the United States following Biden's victory?

The first thing that needs to be said is that the United States is a necessary country for effective multilateralism and for taking the decisions that the international organisations need to take. I hope that in the coming months decisions can be made at the IMF's board of directors, which are necessary in order to provide the flexible, cheap and fast liquidity that the countries of the Latin American region need. And not just Latin America, all the emerging middle-income countries in the world, which represent five billion people in the world, two-thirds of the population.

I liked very much the sentence he said in El País: "In our region we had asthma of informality, diabetes of poverty, arrhythmia of polarization, vascular difficulties of access to services and cardiac problems of digitalization". A medical language that is now very fashionable and surely was what you were looking for with that phrase.

That's right, because the truth is that the COVID does not invent reality, it interacts with it and how you say, our structural deficits, our inequalities, our gaps before the COVID, interact and amplify the impact on individuals and families. In pre-COVID Latin America, we had more than 50% of the working population in the informal sector: without health or unemployment insurance. Therefore, the totally necessary measures of physical separation, quarantine to save lives, have been very severe for this population that lives on the income it gets every day. They do not lose their jobs, they lose their income, the possibility of bringing home bread. That is why the pandemic is so serious in our zone.

I am concerned that these levels of poverty and misery may be breeding grounds, as they were in the 1980s, for violence, guerrilla groups or criminal action.

It is true that this is not ruled out, but what worries me most at the moment is that there could be a situation that further weakens democratic institutions in the region. Because before we entered the pandemic we were already seeing citizen dissatisfaction in many Latin American countries, where, effectively, social movements are emerging to protest against the system and the lack of response from the system to the needs of important groups of the population. What worries me most is that this construction we have had since the 1980s to try to strengthen our democratic institutions may be weakened by the consequences of the pandemic. A relevant fact is that from 2021 onwards we will enter into what many of us call the "super-electoral cycle in Latin America", we will have elections in all the countries of the region over the next three years, so being able to channel this social discontent in an institutional, peaceful manner will be a great challenge for the region.

There are interesting initiatives such as the negotiation of a series of projects between the Andalusian regional government and the Ibero-American general secretariat, and an Ibero-American regional forum. What do you ask of Spain and Europe for Latin America?

I believe that the voice of Spain and the voice of Europe in international bodies for a much more effective multilateralism, for international bodies in the financial system that manage to act quickly in favour of our countries, is essential. Because Europe, and of course the United States, will be needed, but we will need Europe for these bodies to react and take the measures that our region needs. Spain has done so. President Sánchez met with ten Latin American presidents precisely to discuss financing mechanisms and they drew up a declaration by consensus of all the countries. Furthermore, we will go to a meeting of foreign affairs ministers on 30 November this year and in April next we will have the Latin American summit where we will all meet for the first time in this context, to be able to discuss the whole issue of economic recovery. 

I think that the profile of the summit that we are going to and the meetings that we have had deal with the issue of how to move towards a reactivation. On this path, of course, we need all the actors in society and all levels of government, which is why Andalusia's proposal was so well received, so that within the forum of local governments that we have in the Latin American space, the forum of regions can also contribute to this path of recovery.

We have recently seen serious incidents in Peru, the recently appointed President Merino has resigned, with altercations in the streets and deaths. What is your assessment of the situation there and how can it be resolved?

Well, for the moment, with a large majority, they have managed to choose the next president, Francisco Sagasti, a great friend and a person with an unquestionable clarity and background. I believe that Peru will be in very good hands, I congratulate the Congress and I hope that the Peruvian people will support this transition until next year's elections, for which there are only five months left. I also hope that this will effectively provide a peaceful response to the institutional crisis we are experiencing. 

As I say, we are going to see political crises in the region, I have no doubt, the most important question is whether we are going to be able to channel that citizen discontent and those political crises, in an institutional and peaceful way, something that is not guaranteed. This will depend on what we do. In the case of Bolivia, there was a high degree of social conflict a year ago and it managed to have elections that were recognised by the whole international community and all the parties in the country. Similarly, in Chile, it managed to go to a referendum on the constitution, achieve a convincing result and move towards a discussion within an institutional framework. The question is therefore whether the institutions are going to be able to channel this crisis in a peaceful manner. 

This is also what we want with Venezuela, which has an open electoral process that is not recognised by all the country's political factions and which has been permanently doomed, in recent years, to social, political and economic instability and danger of poverty. What are your words for Venezuela?

There must be effective reconciliation and a process through institutional channels. We all hope that this fracture that the Venezuelan people are experiencing can be resolved in this way, just as it has been resolved in the best way, peacefully, in the rest of the countries in the region.

Beyond the political situation, how are the channels available to small and medium sized entrepreneurs, not just large corporations, to invest and do business in Latin America working? For example, they have channels such as the CAF, the Latin American development bank, which can be used by Spanish entrepreneurs to have business initiatives there, thanks to a normalcy and legal security.

We are working very hard on the issue of medium and small enterprises, and in the business forum, I believe that the Ibero-American space is probably the one that has the most relationship with the private sector as a multilateral institution. I believe that, just as happened in the nineties, when Latin America was coming out of what was called the "lost decade", and Spanish companies made a bet on Latin America without being wrong; this is a good time for a new investment bet including small and medium sized companies in the region. This is why we need to strengthen the mechanisms we have developed over all these years, precisely to support small and medium sized companies in their internationalisation and for them to invest in Latin America again. Because I believe that, although these are difficult times, there is a great opportunity to move forward in the Latin American region and I trust that Spain and Spanish companies will once again make a commitment to Latin America. There will be many opportunities and a great future in the post-COVID stage, which will come and bring many opportunities for investment and progress for all.