Miniseries: Emerging Markets in the Post-COVID-19 Era

Periodically, the Journal examines a contemporary or pressing issue and composes a set of analyses for the online edition addressing the same. The first, Emerging Markets in the Post-COVID-19 Era, covers the impact of the pandemic on major emerging economies across regions, and examines the contours of the recovery. Which institutions inhibit or enable it, and who wins and loses? What are the opportunities for diplomatic partners, entrepreneurs, and investors?

1. The United Arab Emirates' Post-COVID-19 Recovery
Robert Mogielnicki | March 29, 2021
The United Arab Emirates faces tough economic challenges in 2021 and beyond. The coronavirus and the resulting crises have caused its most important industries to struggle, endangered retaining its expatriate residents, and obstructed global investments. Nevertheless, its economic pillars allow it to enjoy a position of strength while battling for regional economic influence and pursue a sound economic recovery.

2. The Pandemic’s Unprecedented Shock and Opportunity for the Caribbean
Henry Mooney
For many Caribbean countries, COVID-19 has generated the largest single-year economic contraction on record. While the future remains uncertain, policymakers will continue to be faced with difficult decisions regarding how much to spend to mitigate the effects of the crisis, while also ensuring that fiscal and debt outcomes do not spiral out of control. But perhaps the most interesting question is whether governments can take advantage of this opportunity to rebuild their battered economies in ways that help mitigate vulnerabilities to future shocks, which can also help accelerate growth in years to come.

3. Brazil, Mexico, and COVID-19: A Striking Contrast
Nora Lustig and Jorge O. Mariscal | 
Brazil and Mexico experienced the first signs of the COVID-19 pandemic roughly at the same time. A year later, Brazil is one of the countries that has provided the most financial support to its population during the pandemic and Mexico is among the countries that have spent the least. Yet, the increase in debt as a proportion of GDP in Mexico is similar to Brazil’s, highlighting the great paradox that austerity will not bear the expected fruits and actually increase the national debt in the same manner greater spending would. The different approaches resulted in Brazil’s economic downturn being smaller, the recovery faster, and the increase in inequality and poverty lower. Despite Brazil’s worrisome surge of COVID-19 infections in early 2021, the fact remains that fiscal policy curbed the fall in living standards to a greater degree in Brazil than in Mexico.