SOAS Research Online

Abstract

The COVID-19 pandemic is exposing the vulnerabilities of Latin America’s commodity-producing countries and is exacerbating their structurally weak position in global financial capitalism. Due to a high dependency on incomes from commodity exports, a reliance on external finance, and the volatility of exchange rates, the economies of Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, and Peru are hit particularly hard by the COVID-19 crisis with projections for 2020 predicting economic contractions of up to 14 per cent. By looking through the theoretical prism of critical economic geography, this article argues that in addition to the health and direct economic consequences of the pandemic, these countries will experience so-called switching crises as a result of the constant geographical restructuring of capitalism. As capital had moved into Latin America’s commodity-producing economies to provide spatial fixes to global capitalism’s previous crises by displacing them geographically and temporarily, the fall in commodity prices and the sudden stop to and reversal of capital flows has caused additional burdens in the current crisis. With the resulting debt expansion, the remaining dependency on external finance, and the structural deficiencies in achieving economic diversification, the territorialisation of capitalism’s crisis tendencies in the COVID-19 crisis will disproportionately affect Latin America’s commodity-producing economies.