In Latin America and the Caribbean, the challenges associated with the goal of poverty eradication are structural, multi-faceted and enduring, and it continues to be the world’s most unequal region as far as income distribution is concerned. For these reasons, we must focus on building back better with equality and sustainability, said Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC).
The regional Commission’s most senior representative participated today in a high-level virtual meeting on poverty eradication, which was inaugurated by the United Nations Secretary-General, António Guterres (via video address), and the President of the General Assembly, Tijjani Muhammad-Bande. The event marked the inauguration of the United Nations’ Alliance for Poverty Eradication.
Alicia Bárcena spoke during a panel discussion exploring Trends, Options and Strategies in Poverty Eradication Across the World, which was inaugurated by the UN Deputy Secretary-General, Amina J. Mohammed (via video address). Other participants in the panel discussions included Guy Ryder, Director-General of the International Labor Organization (ILO); Qu Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO); Mukhisa Kituyi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD); Mourad Wahba, Associate Administrator of the United Nations Development Program (UNDP); and Laura Jaitman, Special Representative of the World Bank Group to the United Nations and Head of the World Bank Group Office in New York.
In her remarks, ECLAC’s Executive Secretary emphasized that Latin America and the Caribbean continues to be the world’s most unequal region in terms of income distribution among its population, with an average Gini index reading of 0.465 in 2018.
She specified that more than half the region’s workers (53.1%) are employed in the informal sector, and warned that poverty and inequality have the face of a woman.
“The region is also characterized by racial, ethnic and territorial inequalities and others related to different stages of the life cycle, which means that various population groups continue to fall behind,” Alicia Bárcena warned.
The senior United Nations official said that Latin America and the Caribbean is currently the global locus of the COVID-19 pandemic, with dramatic repercussions not just for health but also because it represents a major step backwards with regard to poverty eradication.
She recalled that the region’s countries made significant progress on reducing poverty between 2002 and 2014. During that period, according to the figures published in ECLAC’s Social Panorama of Latin America, poverty declined from 45.4% of the total population to 27.8%, meaning that 66 million people were able to get out of poverty. Extreme poverty, meanwhile, fell from 12.2% to 7.8%.
She asserted that today Latin America and the Caribbean runs the risk of experiencing another lost decade. Estimates point to the pandemic’s effects producing the biggest recession undergone by the region since 1914 and 1930, with growth projected at -5.3% and a significant deterioration in labor indicators in 2020 that will leave nearly 12 million more people unemployed in the region and drive almost 30 million more into poverty.
In addition, extreme poverty is seen rising by 2.6 percentage points (15.9 million people), affecting a total of 83.4 million people who are in danger of suffering a food crisis as well.
Alicia Bárcena stated that ECLAC has put forth five proposals to confront the socioeconomic impacts of the crisis prompted by the coronavirus disease (COVID-19) in the region: an Emergency Basic Income, an Anti-Hunger Grant, subsidies for Small and Medium-sized Enterprises (SMEs), digitalization for all, and access to financing for middle-income countries.
First, the Commission proposes providing an Emergency Basic Income equivalent to one poverty line (the per capita cost of acquiring a basic food basket and meeting other basic needs) for six months to the entire population living in poverty in 2020 (which is to say, 215 million people or 34.7% of the region’s population). This would entail additional spending equivalent to 2.1% of GDP to reach all the people who will find themselves in situations of poverty this year.
To prevent the health crisis from becoming a food crisis, ECLAC proposes complementing the Emergency Basic Income with the provision of an Anti-Hunger Grant to all people in situations of extreme poverty for a six-month period, equivalent to 70% of the regional extreme poverty line ($47 dollars based on the 2010 dollar). The cost of this would be equivalent to 0.06% of regional GDP if it were provided solely to persons aged 65 and older who live in extreme poverty, or to 0.45% of GDP if coverage were given to the entire population experiencing extreme poverty.
ECLAC also suggests supporting SMEs through subsidies and making a commitment to keep strategic companies afloat on the condition that they preserve jobs. In addition, universal access to digital technology is needed, while greater equity in financial access is provided to middle-income countries in the region.
In broader terms, the senior official stated, to overcome the crisis and eradicate poverty, a change in the development model must take place, understood as a progressive structural change with an environmental big push. It is necessary to integrate the economic, social and environmental dimensions of sustainable development, ensuring that no one is left behind, as the 2030 Agenda indicates.
“We have to focus on building back better, as the Secretary-General said, to reroute investments and idle capacity, improve production with more digital technology, and ensure universal access to well-being. We also need better institutions that are able to fight corruption. A social compact for equality is imperative in our region, with an international fiscal and financial compact. Building back better in Latin America and the Caribbean means building back with equality,” she concluded.