Prolonged health and social crisis stemming from the novel coronavirus pandemic have further exacerbated the poverty rate in Latin America bringing the number of people living in extreme poverty to 86 million.
According to the Economic Commission for Latin America and the Caribbean's (ECLAC) Social Panorama of Latin America, the extreme poverty rate in the region rose from 13.1 per cent of the population in 2020 to 13.8 per cent in 2021 – representing a 27-year setback.
Conversely, the overall poverty rate is estimated to have fallen slightly, from 33.0 per cent to 32.1 per cent of the population, meaning the total number of people in situations of poverty declined slightly from 204 million to 201 million.
As the pandemic rages on, poor households bear the brunt of the devastating impacts in the world's most vulnerable region. 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 – used internationally to measure income distribution – verified an increase in inequality.
According to the report, the region experienced a major setback to its fight against poverty in 2020 due to the pandemic. Both poverty and extreme poverty increased for a sixth consecutive year.
“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. 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 annual report indicates.
It further emphasise that poverty would have been greater in 2020 if the region's countries had not implemented measures such as emergency cash transfers. Extreme poverty would have been around 1.8 percentage points higher, and overall poverty would have been 2.9 percentage points higher on average in seven countries.
Nonetheless, the Social Panorama notes 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 at US$45.3 billion dollars.
“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,” ECLAC's executive secretary Alicia Bárcena commented on the findings.
Consequently, she called for the maintaining of emergency cash transfers in 2022 or until the health crisis is brought under control.
In fact, the organisation stresses that economic recovery in whatever form will not be sustainable unless the health crisis is brought under control.
This Latin American and the Caribbean (LAC) region has the highest number of COVID-19-related deaths reported worldwide at 1,562,845 as of December 31, 2021, a figure that will keep rising as long as the pandemic continues, ECLAC said.
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.
As of January 26, 2022, 62.3 per cent of the LAC region's population (around 408 million people) had been fully vaccinated, but ECLAC further appeals for intensifying efforts so that by mid-2022 all the region's countries will have fully vaccinated 70 per cent of their population.
To achieve this goal, the commission indicates that it is urgently necessary to strengthen programmes 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.
This signals a move towards universal, comprehensive, sustainable and resilient social protection systems.
Bárcena said, “The pandemic is a historic opportunity to forge a new social compact that would provide protection, certainty and trust. 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.”
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, she added.