A United Nations report shows a pessimistic outlook for Latin America in 2020 due to the coronavirus pandemic. A sharp fall in tourism, a severe economic downturn and a reduction in remittances will translate into 45 million more people in poverty in the region compared to 2019.
These conclusions are drawn from a report by UN Secretary-General António Guterres, published on Thursday. It indicates that some countries in Latin America and the Caribbean now have one of the highest levels of infection of the virus per capita and that a projected economic contraction of 9.1% in the region will be the highest in 100 years. For her part, Alicia Bárcena, executive secretary for the Economic Commission of Latin America and the Caribbean (ECLAC), presented the report this week to the media through videoconferences in which she made clear the difficulties and obstacles faced by Latin American countries.
«This is a region that has been going on for seven years with very low growth and structural gaps and an unsustainable development model that has been exacerbated by very weak social protection, fragmented health systems and deep inequalities,» Bárcena said.
The economic effects left by coronavirus in the region will result this year as a 7% increase in poverty, equivalent to 45 million more people in poverty in Latin America compared to 2019. Mexico, Nicaragua, Guatemala and Honduras would be the countries with the greatest poor population, the report states.
In addition, the report ensures that a total of 230 million people will be reached in poverty in the region. «It’s huge. We’re talking about a continent of 630 million people,» Bárcena said, regarding extreme poverty, the increase could be 28 million more people compared to 2019. These are the people who are not going to meet their basic food needs, the civil servant clarified. More than three million people have contracted the virus in Latin America and more than 132,000 have died, according to figures from Johns Hopkins University. Tourism is already feeling a heavy blow because of the pandemic. There is a 35% drop in the tourism sector in South and Central America, and 39% in the Caribbean, the report notes.
In this regard, Bárcena said that an international aid rescue will be necessary. He noted that Latin America has often been excluded from these bailouts because many of its countries are middle-income, not low, with the exception of Haiti.
«The international multilateral response should be extended to middle-income countries, with concessional financing, extensions in some cases, deferment of debt service payments, and certainly expand the allocation of special drawing rights,» said Mexico.
Through a recorded video in which he spoke in Spanish, the UN Secretary General stressed that to rebuild the Latin American economy «it is necessary to transform the development model of Latin America and the Caribbean.» In a region where levels of inequality have already become unsustainable, this means developing comprehensive social welfare systems accessible to all people,» Guterres warns. «This involves creating fairer tax systems, promoting the creation of decent jobs, strengthening environmental sustainability, and strengthening social protection mechanisms.»
In the same vein, inequality can increase by 4.6% in large countries, such as Brazil and Mexico, where it could reach 5%, the report says. Regarding unemployment, the report says it will rise from 8.1% in 2019 to 13.5% in 2020, which will result in more than 44 million unemployed people in the region. Finally, Bárcena said that governments in Latin America should consider handing over a basic emergency income to poor people who could be $140 a month. That would represent 1.9% of GDP, he noted, and guarantee this basic income for six months.
In this note: