Pandemic Spurs Record Increase in Poverty in Latin America

Latin America

SANTIAGO – The COVID-19 pandemic has led to an unprecedented increase in poverty in what was already the world’s most unequal region, the UN Economic Commission for Latin America and the Caribbean (ECLAC) says in a report presented on Thursday.

The ranks of the poor grew last year by 22 million to 209 million, including 78 million people living in extreme poverty, according to ECLAC’s Social Panorama of Latin America 2020.

More than a third of the regional population are below the poverty line, the highest percentage in 12 years, while 12.5 percent of Latin Americans are indigent, a level last seen two decades ago.

“Eight in every 10 Latin Americans are vulnerable, so it is necessary to advance on universal systems of social protection,” ECLAC Executive Secretary Alicia Barcena said during a press conference in Santiago.

She pointed out that around 59 million people in Latin America fell out of the middle class in 2020.

If not for the 263 emergency measures taken by individual national governments to provide assistance to 326 million people, nearly half the region’s population, the proportion of inhabitants in extreme poverty would be 15.8 percent, Barcena said.

The regional death toll from the pandemic is approaching 700,000 – Brazil alone has lost 259,000 lives to coronavirus – and cases stand at 21.5 million.

“Latin America has 8.4 percent of the global population and 27.8 percent of the registered pandemic deaths worldwide,” Barcena said, attributing the greater lethality of COVID-19 in the region factors such as overcrowding, lack of access to basic services and fragmented health systems.

Coronavirus has aggravated Latin America’s existing structural problems, creating the most severe region-wide crisis in 120 years.

The economy shrank 7.7 percent in 2020 and the regional unemployment rate climbed to 10.7 percent.

Per capita gross domestic product in Latin America and the Caribbean ended last year at the same level as 2010, marking a new lost decade for a region that experienced similar stagnation in the 1980s.

“We see a rebound of 3.7 percent for 2021, but it will take us several years to recover the 2019 levels of economic activity,” Barcena said, noting that economic growth in the region was anemic before the pandemic.

Latin America’s economy expanded by just 0.3 percent annually on average during the period 2014-2019, compared with 1.8 percent a year in the preceding decade.

ECLAC forecasters say that a return to the pre-pandemic economy would take more than 10 years with growth at the pace of 2014-2019. With annual expansion at a 1.8 percent clip, last year’s losses would be recouped in 2024.

In the short term, the main problem facing the region is the widely uneven process of vaccinating people against COVID-19.

While Chile, the regional leader, has inoculated more than 18 percent of its population, only a few thousand people have gotten the shot in countries such as Guatemala, Paraguay and El Salvador.

“We are not going to achieve herd immunity in 2021. We are experiencing a strong global hoarding of vaccines by the developed countries,” Barcena said, insisting on the need for “international collaboration.”

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