Poverty biting in ECLAC countries

THE PINCH OF POVERTY STILL BITES in Latin America and the Caribbean.

The Economic Commission for Latin America and the Caribbean (ECLAC) latest report indicates while poverty and extreme poverty rates dipped slightly in 2021, it has not reached pre-pandemic levels when it presented its Social Panorama of Latin America and the Caribbean 2022 report Thursday in Santiago, Chile.

“After a sharp increase in poverty and a slight increase in income inequality in 2020 as a result of the COVID-19 pandemic, the extreme poverty and poverty rates declined in 2021 and the middle-income strata grew, but not by enough to fully reverse the negative effects of the pandemic,” the Publication explains.

Thus, in 2021, Latin America’s poverty rate reached 32.3 percent of the Region’s total population (marking a 0.5 percentage point decline from 2020), while the extreme poverty rate was 12.9% (0.2 percentage points less than in 2020).

ECLAC projects that by the end of this year, poverty will stand at 32.1 percent of the population (a percentage equivalent to 201 million people) and extreme poverty at 13.1 percent (82 million), which points to a slight decline in overall poverty and a slight increase in extreme poverty compared to 2021. This is due to the combined effects of economic growth, labor market dynamics and inflation.

These figures mean that an additional 15 million people will be living in poverty in comparison with the situation before the pandemic and that there will be 12 million more people in extreme poverty than there were in 2019.

The extreme poverty levels projected for 2022 represent a 25-year setback for the Region, ECLAC said. As in past years, ECLAC indicates that the incidence of poverty is greater in some population groups in the Region with more than 45 percent of the child and adolescent population living in poverty, and the poverty rate of women between 20 and 59 years old higher than that of men in all of the Region’s countries. Similarly, poverty is considerably higher in the indigenous and Afro-descendent populations.

In 2021, income inequality (as measured by the Gini index) declined slightly versus 2020 in Latin America, reaching 0.458, which was similar to 2019 levels.

Meanwhile, the unemployment projected for 2022 represents a setback of 22 years, particularly affecting women, whose unemployment is seen rising from 9.5 percent in 2019 to 11.6 percent in 2022.

“The cascade of external shocks, the deceleration of economic growth, the weak recovery in employment and rising inflation are deepening and prolonging the social crisis in Latin America and the Caribbean,” José Manuel Salazar-Xirinachs, ECLAC’s Executive Secretary, stressed during the presentation of the document. Said he: “We have not been able to reverse the pandemic’s effects on poverty and extreme poverty, and countries face a silent crisis in education that is affecting the new generations’ future.”

Salazar-Xirinachs warned countries calling on them to invest decidedly in education and to turn this crisis into an opportunity for transforming educational systems.

Latin America and the Caribbean experienced the longest educational blackout worldwide (with an average shutdown of educational establishments of 70 weeks, versus 41 weeks in the rest of the world), which exacerbated pre-existing inequalities related to access, inclusion and educational quality. In this period, one of the main limitations on educational continuity was unequal access to connectivity, equipment and digital skills. In 2021, in 8 out of 12 of the Region’s countries, more than 60 percent of the poor population under 18 years of age had no connectivity in their household.

If action is not taken now, ECLAC warned of risk of permanent scarring in the educational and labor trajectories of the youngest generations in the region.

According to the United Nations Regional Organization, learning losses in the Caribbean have already been measured, and, in Latin America, the percentage of young people from 18 to 24 years of age that neither studies nor does paid work increased from 22.3 percent in 2019 to 28.7 percent in 2020, especially affecting young women (36 percent of them were in this situation, compared with 22 percent of men).

In addition, significant gender gaps persist in terms of performance and areas of education. Female students have poorer performances on average in mathematics and science during basic education, with deeper disparities in the lowest income quartiles. Furthermore, in the majority of the Region’s countries, the proportion of female graduates in STEM (science, technology, engineering and mathematics) fields does not exceed 40 percent.

Despite progress in recent decades on access and educational inclusion at all levels, from early childhood to higher education, the Region’s countries still had serious pending learning issues in terms of equality and quality prior to the crisis prompted by the pandemic, which were already hampering efforts to achieve the targets of Sustainable Development Goal (SDG) 4 by the year 2030.

In line with the United Nations’ Transforming Education Summit held this year, the document provides numerous policy recommendations to turn this crisis into an opportunity for transformation.

The social institutional framework is a critical factor for the effectiveness of social policies and is a cross-cutting element for achieving inclusive social development.

ECLAC said social spending by the central Government reached 13 percent of GDP in 2021 in Latin America, below the level seen in 2020 but far above what had been recorded in the last two decades. In the Caribbean, social spending reached an historic high of 14.1 percent of GDP last year. For last year too, spending o learning amounted to 4.1 percent of GDP (30.5 percent of total social spending) in Latin America and the Caribbean.

“While public spending on education in the countries of the Organisation for Economic Co-operation and Development (OECD) in 2019 averaged 4.9% of GDP, a figure similar to that of the region (4% of GDP in 2019), spending per student in OECD is six times the equivalent in Latin America and the Caribbean in pre-primary, 5.7 times in primary, 5.3 times in secondary and 6.1 times in tertiary,” the publication specifies.

“We are facing a cascade of crises that has exacerbated the region’s inequalities and shortfalls. This is not a time for gradual changes, but instead for transformative and ambitious policies,” Salazar-Xirinachs reiterated.

 “Inter-sectoral public policy efforts are needed that would link educational offerings to health, work and social protection, and that would allow for establishing mechanisms to guarantee a certain level of well-being and income in an era of volatility and uncertainty,” the Senior ECLAC official argued, urging countries to build “new social compacts accompanied by fiscal contracts to make progress on strengthening democracy and social cohesion and to ensure the financial sustainability of social protection systems in the Region.”