UN: Pandemic will trigger even greater poverty, inequality in Latin America

By Mario Villar

United Nations, Jul 9 (efe-epa).- The pandemic will trigger a further increase in already high levels of poverty and inequality in Latin America and the Caribbean, the United Nations said Thursday, calling on the region’s governments and the international community to provide steadfast support for vulnerable members of the population.

Secretary-General Antonio Guterres noted in a video accompanying the release of a UN policy brief that Latin America has become one of the planet’s Covid-19 epicenters and that several of the region’s countries have registered among the world’s highest number of confirmed coronavirus cases per capita.

Making matters worse, the pandemic struck at a time when the region was struggling to recover from years of sluggish growth.

The UN is forecasting that the gross domestic product of Latin America and the Caribbean will contract by 9.1 percent this year, which would constitute the worst economic recession in 100 years.

According to the UN Economic Commission for Latin America and the Caribbean, both exports and remittances – two of the region’s biggest sources of hard currency – are projected to fall by around 20 percent this year.

That will lead to a clear increase in poverty, ECLAC’s executive secretary, Alicia Barcena, said in a virtual meeting with reporters.

An additional 45 million people are projected to fall into poverty in 2020, thereby expanding the ranks of the region’s poor to 230 million.

Meanwhile, up to 28 million more people will be plunged into extreme poverty, raising the total region-wide to 96 million. These individuals, according to Barcena, will not even be able to cover their basic food needs.

The pandemic has disproportionately affected women, indigenous people and people of African descent, according to the report, which added that the coronavirus crisis also has increased the vulnerability of migrants and refugees.

The Covid-19 crisis will exacerbate a level of inequality that, for many experts, was already the world’s most severe, the UN said, adding that this problem therefore must be front and center in the region’s recovery plans.

“Building back better requires transforming the development model of Latin America and the Caribbean,” Guterres said in the video message, denouncing a level of “inequality that has become untenable.”

“It means creating a fair taxation system, promoting decent jobs, strengthening environmental sustainability and reinforcing social protection mechanisms,” he added.

Guterres furthermore called for greater regional economic integration and the full participation of women in public and economic life.

“Finally, building back better demands strengthening democratic governance, human rights protection and the rule of law, in line with the 2030 Agenda for Sustainable Development,” he said.

“The root causes of inequality, political instability and displacement must be addressed. At a time when too many citizens feel excluded, greater accountability and transparency are crucial.”

In the short term, the UN is calling on regional governments to explore mechanisms for providing basic emergency income for people living in poverty and anti-hunger grants for those in conditions of extreme poverty.

The UN also recommends that emergency subsidies be provided to micro, small and medium-sized enterprises, especially to cover labor costs, and that financial support be given to large strategic companies, albeit with the condition that they not invest in tax havens, refrain from distributing dividends among shareholders and protect employment, Barcena said.

The ECLAC executive secretary also recalled that the region suffers from a very high level of tax evasion and that curbing this problem would make more funds available to spend on social programs.

Guterres said he is calling for a rescue and recovery package equivalent to more than 10 percent of the global economy.