Elpidio González
Graduate in economics from the University of Panama. He has conducted research in the area of agricultural economics and labour markets. He is currently studying for a Master's degree in Agricultural Economics at the University of Buenos Aires.
Danilo Rivera
Economist, graduated from the University of Panama with almost 4 years of professional experience. He is involved in studies, research and has even participated in the elaboration of the book "Resilient Fiscal Rules in Latin America" and the Journal of Scientific Initiation of the UTP "The importance and prices in the rice production chain during the period 2001 - 2014".
Talk about the future has become frequent in recent weeks. Individually many are wondering about their livelihood in the coming days, or about what will happen to their suspended work contracts, while some are also planning how they will celebrate the end of the distancing measures that have been imposed to curb the spread of the coronavirus. Likewise, in the midst of so much uncertainty, humanity has stumbled over the question of what lies ahead in the medium and long term, after this profound shock that has shaken our way of life in such an unprecedented way. The complexity of the challenges we face on a daily basis, and of the challenges that await us in the near future, make it very difficult to make a precise prognosis. One undoubted effect of the coronavirus has been its ability to sweep under the carpet those untenable situations and uncomfortable questions that society has neglected to address, as if expecting them to be magically solved.
Due to the restriction in the movement of people, the need has arisen to move from working in person to working from home or teleworking. Naturally, there are activities anywhere in the world that cannot be performed by such means, but Latin America has come up against an equally, if not more, limiting reality: that of its informal workers and their high levels of inequality, conditions that exacerbate the impact of a stagnant economy on employment. According to a recent study by Dingel and Neiman (2020), between 15% and 25% of occupations in Latin American countries can be performed from home. This contrasts with European countries and the United States, where the figure is over 40%. This gap is not only explained by the high informality of our economies, but also by our technological lag. Latin American exports, a reflection of the orientation of our productive processes, continue to be heavily oriented towards foodstuffs or towards goods and services derived from natural wealth and geographical position, as in the case of Panama. At the same time, the value of China's high-tech exports[1] is seven times higher than the same indicator for Latin America, and eight times higher in the case of the European Union.
This technological lag becomes relevant in a world that relentlessly pursues the replacement of human labour through labour-saving investment. The disappearance of occupations as a result of technological progress operates in three ways: with the emergence of automated robots for manual labour, with the development of software, and with the evolution of artificial intelligence. Each of these phenomena threatens low-, middle- and high-income occupations, respectively (Webb, 2020), and developed countries do not fully understand the consequences of these transitions. In Latin America, we do not even come close to imagining the role of our countries in a world configured in this way. Against this backdrop, it is necessary to rescue paradigms that help us to better describe trade relations between our countries and the rest of the world. The old discussions of the last century (today sometimes branded as obsolete) about the terms of trade in world trade, the centre, the periphery and Latin America's dependence, anticipated this gap of which we are beginning to have a clearer notion.
Along with the future of work, the future of our relations with nature is an issue that has also re-emerged with many more challenges than we imagined. The penetration of agriculture and extractive activities into increasingly exotic ecosystems has been a major driver of the emergence of pathogens of diverse origins, and their spread through long supply chains (Wallace, Liebman, Chaves and Wallace, 2020). Moreover, the drop in the price of a barrel of oil to unusually low levels has more than confirmed how dependent our economy is on fossil fuels. It is tempting to indulge in the optimism of dreaming of a "greener" economy after seeing that shutting down activity in industrialised countries has reduced air pollution (Watts and Kommenda, 23 March 2020). However, once the economy can restart, it will do so on much the same trends as today, and a transition to new energies does not seem feasible in the short term, with most of that industry subsidised and far from meeting global demand.
Even an economy based on telework and a digital revolution would not ensure more sustainable production. Internet traffic (to and from servers) increased annually by 27.4% between 2012 and 2017 (Barnett, Jain, Andra and Khurana, 2018), and this increase has come at the cost of increased electricity use. By 2020, projections referenced in the Andrae and Edler (2015) study show that the weight of communication technologies in global energy use will be approximately 11%. By 2030, this share is expected to rise to 21%, but without a transition to renewable energy and more efficient ways of using electricity, the same study reports that global energy use by communication technologies could reach 51% by 2030, accounting for 23% of carbon emissions.
A number of activities benefit from low fossil fuel energy prices, such as bitcoin mining, which requires long and complex computational operations and is profitable in countries with low-cost of energy (Jones, 2018). The future also presents us with the challenge of better and more accurate accounting of environmental costs.
Finally, there remains the debate about the contradictions of our economic system. In his famous short story Mister Taylor, Augusto Monterroso describes the rise and fall of an absurd industry based on the collection and sale of human shrunken heads. It would seem that we wish to honour that work at this juncture. The false trade-off between economics and health that some politicians and businessmen have put forward in the midst of this health crisis shows us how disconnected the goals of capital and the reproduction of human life are. Asking why the sacrifice of workers seems to have a lower cost than the sacrifice of production is the first step in considering a society that can survive the future.
Konrad-Adenauer-Stiftung e.V.
Regional Programme ''Alliances for Democracy and Development with Latin America (ADELA)''.
Albrook 16, Cl. Las Magnolias, Ancón
Panama City / PANAMA
References
Barnett, Thomas Jr; Jain, Shruti; Andra, Usha and Khurana, Taru (2018). Cisco visual network index (VNI) comprehensive update, 2017-2022. CISCO. Retrieved from https://www.cisco.com/c/dam/m/en_us/network-intelligence/service-provider/digital-transformation/knowledge-network-webinars/pdfs/1213-business-services-ckn.pdf
Dingel, Jonathan and Neiman, Brent (2020). How many jobs can be done at home? National Bureau of Economic Research. Retrieved from https://www.nber.org/papers/w26948
Jones, Nicola (2018). How to stop data centres gobbling up the world's electricity. Nature magazine. Retrieved from https://www.nature.com/articles/d41586-018-06610-y
Wallace, Rob; Liebman, Alex; Chaves, Luis F. and Wallace, Rodrick (2020). COVID-19 and the circuits of capital. Monthly Review. Retrieved from https://monthlyreview.org/2020/04/01/covid-19-and-circuits-of-capital/
Watts, Jonathan and Kommenda, Niko (23 March 2020). Coronavirus pandemic triggers big drop in air pollution. The Guardian. Retrieved from: https://www.theguardian.com/environment/2020/mar/23/coronavirus-pandemic-leading-to-huge-drop-in-air-pollution
Webb, Michael (2020). The impact of artificial intelligence on the job market. Stanford University. Retrieved from https://web.stanford.edu/~mww/webb_jmp.pdf
[1] World Bank database. The World Bank's definition of high-tech exports is as follows: products that are highly intensive in research and development, such as products from the aerospace, computer, pharmaceutical, scientific instruments and electrical machinery industries.