ECLAC Says Extreme Poverty In The Region Risen Significantly Due To COVID-19 Pandemic

(CMC) – A new report by the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) says that extreme poverty in the region has risen significantly due to the coronavirus (COVID-19) pandemic.

“The health crisis is still ongoing, and Latin America and the Caribbean is the world’s most vulnerable region in this pandemic,” said ECLAC, adding that, as a result of the prolonged health and social crisis stemming from the COVID-19 pandemic, the extreme poverty rate in the region has risen from 13.1 per cent of the population in 2020 to 13.8 per cent in 2021.

ECLAC said this represents a 27-year setback, while the overall poverty rate is estimated to have fallen slightly, from 33 per cent to 32.1 per cent of the population.

“This means that the number of people living in extreme poverty went from 81 million to 86 million, while the total number of people in situations of poverty declined slightly from 204 million to 201 million,” ECLAC said.

“Despite the economic recovery experienced in 2021, the estimated relative and absolute levels of poverty and extreme poverty have remained above those recorded in 2019, which reflects the ongoing social crisis,” stated the annual report, titled “Social Panorama of Latin America 2021”.

“The crisis has also exposed the vulnerability in which a fair share of people in the middle-income strata lives, characterised by low levels of contributions to contributory social protection and very low coverage of non-contributory social protection,” the study added.

According to the document, the region experienced a major setback in its fight against poverty in 2020 due to the pandemic. Both poverty and extreme poverty increased for a sixth consecutive year. In 2020, extreme poverty reached the levels seen 27 years before, while the overall poverty rate was at levels akin to those at the end of the 2000s.

In the study, ECLAC indicates that in 2020 the proportion of women who did not receive any income of their own increased, and poverty gaps persisted in rural areas and among indigenous peoples and children. In addition, an examination of various indices, including the Gini coefficient, verified an increase in inequality.

According to ECLAC, poverty would have been greater in 2020 if regional countries had not implemented measures such as emergency cash transfers.

Nonetheless, the Social Panorama 2021 noted that, whereas in the last 10 months of 2020, the emergency transfers announced by countries to mitigate the crisis’s effects amounted to US$89.7 billion, in the first 10 months of 2021, announced spending on these measures was half that: $45.3 billion.

“The economic ‘recovery’ of 2021 has not been enough to mitigate the pandemic’s deep social and labour effects, which are closely linked to income and gender inequality, to poverty, to informality and to the vulnerability in which the population lives,” said ECLAC’s Executive Secretary, Alicia Bárcena, calling for maintaining emergency cash transfers in 2022 or until the health crisis is brought under control.

The document states that inequality increased between 2019 and 2020, breaking with the downward trend seen since 2002.

The Gini coefficient – used internationally to measure income distribution – increased by 0.7 percentage points for the regional average between 2019 and 2020.

“This deterioration is directly related to the repercussions of the pandemic.  Latin America and the Caribbean is one of the world’s regions that has experienced the longest suspension of in-person classes – around 56 weeks of total or partial suspension on average – which has given rise to gaps in the development of cognitive skills, the loss of learning opportunities and the risk of higher dropout rates.

“School closures have also had an impact on women being overburdened with care tasks. That is why a safe return to in-person classes is urgently needed in 2022,” according to the report.

In the study, ECLAC stressed that the economic recovery will not be sustainable unless the health crisis is brought under control, warning that Latin America and the Caribbean is the region of the world that is most vulnerable to COVID-19.

The report said this region has the highest number of deaths due to COVID-19 reported worldwide (1,562,845 as of December 31, 2021), “a figure that will keep rising as long as the pandemic continues.”

“This represents 28.8 per cent of all the COVID-19-related deaths reported in the world, despite the fact that the region’s population accounts for just 8.4 per cent of the global population,” the report says.

As of January 26, 2022, the report notes that 62.3 per cent of Latin America and the Caribbean’s population (around 408 million people) had been fully vaccinated.

As a result, ECLAC called for intensifying efforts so that by mid-2022 all regional countries will have fully vaccinated 70 per cent of their population.

To achieve this goal, the commission said that it is urgently necessary to strengthen programs for vaccine procurement and mechanisms for regional cooperation and coordination in line with the Plan for Self-Sufficiency in Health Matters in Latin America and the Caribbean, approved by the Community of Latin American and Caribbean States (CELAC) and prepared by ECLAC.

“The pandemic is a historic opportunity to forge a new social compact that would provide protection, certainty and trust,” Bárcena said.

“A new social contract must further and strengthen the institutional framework of social protection systems, encouraging them to be universal, comprehensive, sustainable and resilient. Lower economic growth will mark the coming years, and if efforts to protect the population’s well-being are not maintained, there will be greater increases in poverty and inequality in the region.”

She said such a social compact requires a new fiscal contract with progressivity, coupled with very concrete goals, such as giving financial sustainability to a social protection regime that is universal and sufficient enough to be able to include the entire population.

The ECLAC chief also urged for restructuring health systems, moving towards universal coverage, with timely and quality care for the whole population, and for the state to act as a guarantor of the right to health.