Since the start of COVID-19, epicenters of the virus have moved across borders, across continents, and across hemispheres. Now, as of mid-May, Latin America is the newest region suffering from the most cases of and subsequent deaths due to the novel-coronavirus. Specifically, Brazil has become the new epicenter, with 707,412 infections in total and 37,134 deaths as of June 9, according to Johns Hopkins. Will this health crisis lead to another lost decade in Latin America and the Caribbean (LAC)?
The term “lost decade” is used to refer to a period of time when, in this case, Latin American countries in the 1980s were borrowing more money than they were earning. The Inter-American Dialogue hosted a webinar on May 22 to talk with Ángel Gurría, the Secretary General of the Organisation for Economic Co-operation and Development (OECD) about “assessing the economic and social impact of COVID-19.” According to Gurría, the region was already at a stagnate before the pandemic, so there is true concern for another lost decade.
Gurría shared in the webinar that next year’s global economy will be “a sea of red.” He said that at first glance, it seems that we have two options: stay home and lose the economy or go to work and lose lives. Yet this is a false dilemma: we beat the virus by isolating faster and sooner, which will have a positive impact on our economies in the long run. We need to take care of our people in order to take care of our economy.
According to Gurría, as well as experts who spoke during the Wilson Center’s webinar on April 15 entitled “Covid-19 in Latin America: The Role of Social Policy," in order to soften the impact of COVID-19, we need to work together to encourage equitable access to life and prioritize helping the most vulnerable members of our community — the elderly, homeless, low-income families, informal workers, women, and children.
In Guatemala: A training session for using PPE
The experts said that it will be difficult to slow the spread of COVID-19 and support vulnerable populations given the following challenges in the region:
•A higher percentage of employment and businesses are threatened in LAC due to COVID-19 than in many other countries because small and medium sized enterprises (SMEs) account for 70-90% of employment, and many are forced to remain closed or at lower capacity. Some businesses, such as restaurants, have been able to continue business with e-commerce and deliveries, however it is often inaccessible to SMEs, which are less likely to afford the up to 30% commission and formal contract. They also only have 1-2 weeks' worth of cash available, so long-term closures or decline in sales have a bigger impact. This all leads to lost customers, destroyed credit, and suffering supplier relationships.
•Around 53% of workers in LAC are informal, meaning they have less job security, may not have a contract or benefits, and may switch employers regularly. This adds the challenge of accessing government aid and support. Market employees, food vendors, and other informal workers are essential to locals accessing healthy, affordable food and other essential items, yet they often lack support from the government regarding testing and sanitation.
•Food insecurity is a major concern, as the United Nations agency estimated that 10 million more people could join the already 3.4 million across unable to access food. Miguel Barreto, World Food Programme (WFP) Regional Director for LAC said food assistance is essential and that, “We still have time to prevent the COVID-19 pandemic from becoming a hunger pandemic.”
•Housing situations complicate safety – close quarters make social distancing difficult, if not impossible. In LAC where 21% of the urban population live in slums, the global health pandemic is shedding more light on long-existing inequities. Many people would rather work outside of the house to make a living in order to feed their families and keep a roof over their heads, even if that means risking sickness and death.
•Due to LAC’s “Squeezed middle classes" over the last 15-20 years, it has been harder to maintain the standard of living to still be considered middle class. Schooling, health, and housing costs have grown higher and faster than revenue, and now to top it off, many are out of a job.
•Latin American health systems are overwhelmed, with public hospitals overstressed. Healthcare professionals are forced to make difficult treatment decisions in an environment of “material scarcity and public distrust.”
•Adding to this issue is that only 4.5% of Gross Domestic Product (GDP) is dedicated to health systems. According to The Americas Quarterly, “[In LAC countries], access and usage of healthcare services are rationed or require payment, effectively rendering them off-limits to the poorest parcels of the population.” During COVID-19, this is only exacerbated. Without extra money allocated to emergencies and healthcare, hospitals will need to reallocate resources that already exist.
•More men may be dying, but the gender disparity is only increasing because the healthcare workforce is majority female, women are more often victims of domestic violence - femicides are especially high in LAC, and women are continuing as the primary unpaid care-provider at home.
•LAC has already been suffering a pandemic: gender-based violence. According to the World Bank, one in three women in LAC already have experience with domestic violence. Since COVID-19 lockdowns, domestic violence hotlines or emergency calls raised 91% in Colombia, 36% in Mexico, and 25% in Argentina. Many women work in the informal sector and have lost any financial independence from their violent partner due to the health pandemic.
•According to UNICEF, over 95% of children in LAC are now out of school, which not only impacts education, but also in-school nutrition programs that benefit 80 million children in the region. The digital divide has also meant that the many attempts at continuing education through information and communication technologies (ICTs) are not accessible to many low-income students who lack technology and (reliable) internet. This will exacerbate inequities.
With all of these issues, how can we soften the impacts of COVID-19? On this, experts from the Wilson Center and Inter-American Dialogue webinars had mixed feelings, though they agreed we need to combine efforts. The government, the private sector, multilateral organizations, wealthy individuals, and those able should contribute. How each country handles finances may depend, as each has different resources.
Suggestions included raising taxes for the wealthy, utilizing pension funds, using phased out project funding and creating new jobs for new projects that have arisen from COVID-19, and having companies supply their products (such as cell-phones, tablets, etc.) directly to citizens.
Organizations like WIEGO are also engaging stakeholders in conversations about sustainably solving long-term problems. Initiatives include a moratorium for rent, mortgage, and other basic needs, as well as having local and federal governments support local organizations who have relationships with and access to struggling community members.
In Guayana: PAHO/WHO Guyana donated PPE and testing kits to the Ministry of Health.
While there may be differing consensus, the experts agree: We need to work together to close the digital divide, encourage equitable access to life, and help the most vulnerable members of our community.
Through the shrinking world economy and the increasing number of loved ones lost, we need to support our neighbors. Loss is already happening, but being lost as a collective does not have to be inevitable. With our combined efforts, we can navigate the economic and social challenges, and get through this crisis.