Poverty surge sets Latin America back over a decade, says UN

A surge in poverty and unemployment in Latin America caused by the coronavirus pandemic threatens to set the region back by more than a decade, a United Nations agency has warned.

Alicia Bárcena, executive secretary of the UN Economic Commission on Latin America and the Caribbean (ECLAC), said the region urgently needed to build a new welfare state to reduce “unsustainable” levels of inequality.

“We don’t want to go back to where we were [before the pandemic],” she told a news conference in Santiago on Thursday. “The recovery should be transformational, with equality and sustainability at the centre.”

Latin America had already suffered a “lost decade” of very low growth and social stagnation before coronavirus hit. Now, with only 8.4 per cent of the world’s population, it has 27.8 per cent of all the deaths from Covid-19, making it the worst-affected developing region. The heavy death toll comes amid an economic contraction of 7.7 per cent last year.

Extreme poverty jumped to levels last seen 20 years ago, affecting 78m people, according to figures presented by ECLAC in a report on the pandemic’s social impact. Just over a third of the region’s population, or 209m people, were living in poverty, it added. Eight out of 10 were classed as “vulnerable”.

Latin American governments have intervened with $86bn of support measures to mitigate the worst effects of coronavirus. Bárcena said this was not enough and the region should now move towards implementing an emergency universal basic income for its people.

Women have really been the most affected in this pandemic, and we have regressed a decade in the inclusion of women in the labour market

The pandemic has exacerbated inequality in what ECLAC says is already the world’s most unequal region. While Latin America’s wealthy worked remotely during the pandemic from beachside apartments, country ranches, spacious city villas or second homes overseas, the poor were mostly obliged to continue working in crowded city centres to earn a living.

Regional unemployment ended the year at 10.7 per cent, 2.6 percentage points higher than in 2019. The impact was felt unequally.

“Women have really been the most affected in this pandemic, and we have regressed a decade in the inclusion of women in the labour market,” Bárcena said. Younger people and workers in the informal economy were also hit hard.

A separate World Bank survey released on Thursday showed that female workers had been 44 per cent more likely than male workers to lose their jobs at the onset of the Covid-19 crisis in Latin America. This difference was maintained even as some jobs returned.

Children were also severely affected. UNICEF data released on Thursday showed that Latin America and the Caribbean have had the world’s longest school closures because of coronavirus, with almost 60 per cent of all children missing an entire school year.

“In Latin America and the Caribbean, the loss will be more disastrous and far-ranging than in any other region for children, for parents and for the society at large,” said Jean Gough, UNICEF regional director for Latin America and the Caribbean.

While better-off children were able to continue with online learning at home, a lack of internet access prevented poorer households from doing the same. ECLAC figures showed that in homes where incomes were in the lowest quintile, 80 per cent of children in Colombia and 89 per cent in Mexico could not get online.

Completing a dismal picture, the region has made a slow start to vaccinations, constrained in most countries by a shortage of available doses. Analysts do not expect the region to reach herd immunity until well into 2022, or maybe even later.

Mexico has led calls for greater global equality in vaccine distribution. An appeal from its president Andrés Manuel López Obrador to Joe Biden for help at a virtual summit this week, however, did not elicit an immediate response.