To achieve a transformative recovery in the wake of the COVID-19 pandemic, which puts emphasis on investment for equality and sustainability, we must transform the State by restructuring the education and health systems, strengthening welfare states and moving towards a care society, Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), stated today during a virtual keynote lecture given at the National Autonomous University of Mexico (UNAM).
ECLAC’s highest authority participated in the 14th National Dialogue for a Social Mexico: Development and Society after the Pandemic, organized by the UNAM’s University Program for Development Studies (PUED). The event was inaugurated by Leonardo Lomelí, Secretary General of that educational institution, and Rolando Cordera, Coordinator of the PUED.
In her speech, Alicia Bárcena stressed that Latin America and the Caribbean faces concrete challenges today, such as the exacerbation of global asymmetries related to vaccines, wealth, investment and climate change; unsustainable growth that puts the region at risk of returning to mediocre trajectories, with insufficient investment and employment, greater environmental deterioration, and an increase in inequality, with a bigger impact on women, young people and older adults. She also emphasized the importance of maintaining fiscal measures that would allow for cushioning the pandemic’s social effects.
The senior United Nations official underscored that these major global asymmetries ultimately translate into privileges that deny rights. In relation to vaccination, she specified that while the United States and Canada have nearly 70% of their population over 18 fully vaccinated and the European Union has 74.1%, Latin America has attained 47.3% and the Caribbean, just 26.3%.
In this regard, she pointed up the lines of action and proposals for a plan for self-sufficiency in health matters in Latin America and the Caribbean, a programmatic roadmap presented by ECLAC at the request of the Community of Latin American and Caribbean States (CELAC), to strengthen the production and distribution of medicines, especially vaccines, in the region’s countries and to reduce external dependence. It was approved unanimously by CELAC’s member countries during the 6th Summit of Heads of State and Government, held on Saturday, September 18 in Mexico City.
“The plan for self-sufficiency in health matters that we presented to CELAC on Saturday seeks, in the short term, to accelerate vaccination processes and, in the medium to long term, to strengthen the generation of technological and productive capacities,” Alicia Bárcena affirmed.
ECLAC’s Executive Secretary recalled that Latin America and the Caribbean has been the region most affected by the COVID-19 crisis, both in terms of economic activity and employment.
She noted that the region’s economy suffered a -6.8% contraction in GDP in 2020, while this year it is forecast to grow 5.9%, reflecting a statistical carryover effect that will moderate to 2.9% in 2022. With regard to employment, the pandemic unleashed the worst crisis that the region’s labor markets have experienced since 1950, with a -9.0% drop in the number of employed persons, affecting women and young people the most.
Alicia Bárcena warned about the risk of having a lost generation: 167 million students lost up to one year of in-person schooling, which had an impact on their learning, while 3.1 million youth and children are at risk of dropping out of school. Furthermore, the region is experiencing a setback of up to 5 years in the reduction of the adolescent fertility rate, along with an increase in violence and exposure to child labor.
The senior official also warned about the increase in food insecurity in all the subregions of Latin America and the Caribbean during 2020, a phenomenon that is closely linked to extreme poverty, in a context of sharp economic decline and a sustained increase in food prices. Despite the policies implemented to support income and access to food, the incidence of moderate to severe food insecurity affected 40.4% of the population in 2020, marking a 6.5 percentage point increase from 2019.
Thus, she insisted on the central role of public spending on emergency cash transfers to mitigate the rise in poverty.
“The continuity of emergency transfers is critical. If they are not maintained, there will be 15 million more people living in extreme poverty in Latin America and the Caribbean in 2021,” she underlined.
During her keynote lecture, Alicia Bárcena highlighted ECLAC’s nine recommendations for moving from this emergency to a recovery: joint production and equitable distribution of the vaccine; extending the emergency basic income (equivalent to one poverty line) for the vulnerable population; longer repayment and grace periods for loans to MSMEs; a basic digital basket consisting of a laptop computer, a tablet and a low-cost connectivity plan; deep educational reform and training as a priority; expansionary fiscal and monetary policies, both conventional and non-conventional; international solidarity on financing, vaccines and climate change; recovery plans based on investment, employment and environmental sustainability; and political and fiscal compacts for universal, progressive and redistributive social protection with gender equality.
ECLAC’s Executive Secretary also urged for the region, in this context that challenges orthodoxy, to rely on recovery policies with investment in sectors that promote technical change, generate employment, and reduce external constraints and the environmental footprint. As an example, she noted that decarbonizing the electrical matrix costs less than maintaining it, reduces emissions by 30% and creates around 7 million more jobs.
She added that revenue-raising capacity is crucial to fiscal sustainability and stressed that countries must eliminate evasion, consolidate income taxes, create taxes on the digital economy and environmental levies, and review royalties on the exploitation of natural resources.
“A welfare state is going to necessitate that we think about a new social and fiscal contract that would stimulate investment, employment, equality and climate action,” she concluded.