Latin America is a place of diversity, rich culture and history. However, Latin America is one of the most unequal regions in the world. The impacts of COVID-19 in Latin America have amplified these inequalities.
Impact of COVID-19 in Latin America
The effects of COVID-19 in Latin America have been no exception to the gaps that exist in society. The role of public social protection policies is more necessary than ever, given the current growth of poverty and the increase in the social gap with the vulnerable population.
The Latin American region is one of the areas that the COVID-19 pandemic has most impacted. As of April 14, 2021, the region accounted for 19.3% of all world cases of COVID-19.
According to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), the region has experienced the worst crisis in the last 120 years, with GDP falling by 7.7% in the entire region during 2020. Likewise, the unemployment rate increased to 10.7% in 2020. The rise in unemployment caused an increase in poverty of up to 4.4 points, leaving per capita income at 2009 levels across Latin America.
The Role of Social Protection Policies
The active involvement of governments and institutions is more necessary than ever so that the region does not experience another “lost decade.” There are numerous social protection mechanisms that, through public policies, can reduce or reverse the dramatic impact of the current crisis. Progressive taxes ensure the financing of social programs, including investment in education for the most vulnerable who may see the future threatened. Progressive taxes benefit the distribution of scarce resources.
Conditioned social policies are some of the social protection instruments that Latin America needs. The empirical evidence says that states that invest the most in social spending are also the most prosperous. Furthermore, there is a positive correlation between HDI and GDP per capita with the percentage of GDP invested in social spending.
At the economic level, the governments of the region have implemented measures to support supply. Low-interest loans provide liquidity to companies. However, the measures adopted marginally do not foster too much demand in crisis and a radical increase in poverty.
On the one hand, the implementation of subsidies and unemployment insurance by Latin American and Caribbean governments represents a safety net for many families. At the legislative level, the introduction of specific labor laws has been necessary. The regularization of teleworking has been another measure in order not to paralyze the economy. However, greater aid is necessary since digital democratization is not a reality in Latin America. Only 45.5% of the region’s households have a broadband connection. To generate a digital gap it is necessary to strengthen public investment.
The Organization of American States (OAS) published “The Inter-American Democratic Charter: A Guide to Political Action to Address the COVID-19 Pandemic” in late May 2020. The publication served as a guide to economic and social recovery from a democratic perspective. Subsequently, there have been concerns about the inclusion of vulnerable groups in specific agendas.
The specific agendas underwent reorganization and now have fallen to the background. Although the government is taking necessary steps in social protection, the most disadvantaged should not be left behind.
The disadvantaged include citizens with full rights who are still vulnerable due to structural and historical inertia. According to the World Bank, working women were 44% more likely than working men to lose job positions. The same institution warns that the gender gap in labor force participation may mean an average loss of 14% of GDP in Latin America and the Caribbean as of March 2021.
The scenario poses many challenges ahead. More specific social protection policies are considered a moral duty and an investment by incorporating a large mass of work into the system that consumes and pays its taxes. In any democracy, all citizens must grow together.
– Guillermo Remón