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The Response to the COVID-19 Crisis Requires a New Social Compact for a More Inclusive Welfare System: Alicia Bárcena

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7 July 2020|Press Release

ECLAC’s Executive Secretary participated in an event entitled “Sharing Economic Benefits: Social Protection as a tool for Building Back Better after COVID-19,” held on the sidelines of the High-level Political Forum on Sustainable Development 2020.

Building back better in Latin America and the Caribbean after the pandemic prompted by the coronavirus disease (COVID-19) means building back with equality and sustainability. Hence, the response to the crisis requires a new social compact based on equality, with more transparency and responsibility, Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), stated today during a side event at the High-level Political Forum on Sustainable Development 2020.

ECLAC’s most senior representative spoke at the event entitled Sharing Economic Benefits: Social Protection as a tool for Building Back Better after COVID-19, organized by the Permanent Mission of Ethiopia to the United Nations, with the co-sponsorship of the permanent missions of Canada, Indonesia, Sierra Leone, Sweden, Tunisia, Uruguay and the World Bank through the Social Development Global Practice.

Participating along with Alicia Bárcena were Ergogie Tesfaye, Minister of Labor and Social Affairs of the government of Ethiopia; Luis Bermúdez, Ambassador and Deputy Permanent Representative of the Permanent Mission of Uruguay to the UN; Diani Sadiawati, Senior Advisor to the Deputy Minister of National Development Planning of the government of Indonesia; and Rola Dashti, Executive Secretary of the UN Economic and Social Commission for Western Asia.

Additional speakers included Ingo Wiederhofer, Acting Global Director and Lead Social Development Specialist at The World Bank Social Development Global Practice; Romina Boarini, OECD Senior Advisor and Coordinator of the Inclusive Growth Initiative; and Attiya Waris, Director of Research and Enterprise and Associate Professor of Fiscal Law and Policy at the University of Nairobi. The discussion was moderated by Sarah Cliffe of New York University’s Center on International Cooperation.

During her presentation, Alicia Bárcena affirmed that the pandemic has exposed structural gaps that the region has long had in terms of social protection and matters of health.

The senior United Nations official stressed that the responses to the crisis require a social compact to change the conversation between the State, the private sector and society, with an emphasis on transparency, accountability, support for strengthening democracy and, of course, the fight against corruption.

She warned that the pandemic will have severe consequences in Latin America and the Caribbean, a region in which 54% of the population works in the informal sector and has very little access to social protection systems.

Women in the region are one of the hardest-hit populations, she noted, specifying that 77% of them are employed in the health sector with income that is 25% lower than that of men. The region’s 85 million older adults are also highly affected by the pandemic, along with 63 million indigenous persons and 130 million Afro-descendant people.

Alicia Bárcena sustained that poverty will rise significantly in the region and millions of people could slide into extreme poverty and hunger due to the pandemic’s impact.

For that reason, she stated, we need to move towards a universal basic income that has a long-term perspective and reaches the broad strata of the population that are very vulnerable to experiencing poverty.

“This is essential. After the pandemic, we are going to be poor, we are going to be unequal, we will be hungry and we will be angry. So it is better that we do something right away,” ECLAC’s Executive Secretary emphasized.

She added that “a universal income is essential for certain groups. It is an emancipation, a subsistence income. This crisis is going to last a long time, this income must be implemented for at least the next 2 or 3 years,” she stated.

ECLAC also proposes an Anti-Hunger Grant for the entire population living in extreme poverty for a six-month period, equivalent to 70% of the regional extreme poverty line ($47 dollars based on the 2010 dollar), she indicated.

The senior official said that Latin America and the Caribbean faces two major obstacles in this pandemic: the lack of financial inclusion and the digital gap. She specified that, of the 170 million students in the region, only 20% have full access to quality Internet, while only 26% of formal workers can access telecommuting.

In addition, she called for protecting production sectors. She recalled that more than one third of formal employment and one fourth of the Gross Domestic Product (GDP) of Latin America and the Caribbean are generated by sectors that have been hit hard by the economic crisis stemming from the pandemic.

According to ECLAC’s estimates, more than 2.7 million formal companies are forecast to close in the region – 2.6 million of them microenterprises – with a loss of 8.5 million jobs, without including the employment cuts made by companies that will continue to operate.

“We have to salvage microenterprises, that is very important because they are the future. And as for big companies, like airlines, we can think about a bailout but we have to set conditions,” she stated.

Finally, ECLAC’s highest authority urged for moving towards a progressive structural change based on a big push for sustainability as a strategy for emerging from the current crisis.