The countries where extreme poverty increased the most in Latin America during the pandemic and the two where it unexpectedly decreased

With the covid pandemic – 19 Poverty and extreme poverty skyrocketed in Latin America.

That, despite the fiscal stimulus packages with which governments tried to mitigate the effects most devastating of the crisis.

In most cases, governments went into debt to inject emergency funds into health systems and provide direct aid to the most vulnerable families and companies most affected by a recession that caused economic activity to fall 7.7% in 2020.

Poverty reached its highest level in recent years 12 years, affecting a 33, 7% of the population, that is, one in three Latin Americans is having a very bad time.

But the biggest historical setback occurred among the “extreme poor”, those who cannot meet their basic food needs.

Extreme poverty reached its highest level in the last two decades: 15, 5% of the population, according to projections made by the Economic Commission for Latin America and the Caribbean, ECLAC.

A statistic that perhaps does not say much, but in practice is synonymous with hunger.

One in eight people go to bed on an empty stomach. Most have no running water or electricity. Hopefully he gets a makeshift roof to cover himself from the rain or the sun.

And one of the most serious effects of living with hunger is related to the aftermath that leaves in the long term, such as the irreparable deterioration in the cognitive and physical development of children.

“Everything that had been advanced in this century to reduce extreme poverty was lost during the pandemic,” Alberto Arenas, director of ECLAC’s Social Development Division, tells BBC Mundo.

Where did extreme poverty increase the most?

The increase in extreme poverty depends on the situation the country was in at the time the pandemic arrived, how serious the public health situation was and how the government reacted to face the crisis, experts say.

The Latin American countries where extreme poverty increased the most in 2020 They are: Mexico, Honduras and Ecuador or , according to projections made by ECLAC.

[ Honduras subió de 20 a 26,1 ], [ Ecuador subió de 7,6 a 12,8 ], Source: Source: ECLAC projection (comparison 1200 – 2019), Image: “data-lazy-src =” https : //ichef.bbci.co.uk/news/amp/idt2/ 470 / c 12 b 5903 – dad7 – 4208 – b 698 – 4fc7ae 46 c3e6 “loading =” lazy “src =” https://laopinion.com/wp-content/plugins/lazy-load-0.7/images /1×1.trans.gif”>

Comparing 2019 Y 2020, in Mexico extreme poverty soared from 10, 6% to 18,3%.

In Honduras the increase was 20% to 26, 1%, while in Ecuador it rose from 7.6% to 12, 8%.

• “The governments of America Latina failed people in the pandemic ”

“There is a relationship between extreme poverty and monetary transfers made by governments ”, says Arenas, referring to the money that the State gives directly to the most vulnerable people.

“If it were not for the monetary transfers, it indicates them social conditions would be much worse ”, he points out, adding that it is important to maintain them.

The paradox of Brazil and Panama

The only countries where poverty and extreme poverty decreased are Brazil and Panama

While in Brazil extreme poverty fell from 5.5% to 1 , 4%, in Panama registered a decrease from 6.6% to 6.4%.

Unlike what happened in those countries where fiscal aid was lower – Either because they had no more possibilities of getting into debt or because the government made the decision to follow a more austere policy-, Brazil and Panama focused a large part of their disbursements in the lower-income sectors.

This is explained, among other reasons, because in the region more than half of the workers are informal . Therefore, to reach them, the most efficient way in this emergency, experts say, was to opt for the policy of giving them money.

• How much and on what have the governments of Latin America spent their resources during the pandemic

Paradoxically in Brazil, where President Jair Bolsonaro had a denialist attitude towards the pandemic for a long time, at the end of the day it was the government that allocated the most resources to face the pandemic as a percentage of GDP.

An even more complex decision if one considers that Brazil is the country with the highest public debt in the region.

And it is that spending decisions of this magnitude not only have a technical nature.

From a political point of view, for example, while social programs were in force in Brazil, the popularity of the president rose.

And as those stimuli began to be withdrawn, the president’s popularity began to decline .

Fiscal stimulus packages

Fiscal aid in Latin America varied substantially from one country to another. The two extremes were Brazil and Mexico : while Brazil allocated about 8% of its GDP, Mexico barely spent 0.7 %.

These disbursements include public spending and tax relief measures (which are considered as income not received by the Treasury in relation to the payment of taxes).

This type of fiscal measures represented on average 4 , 5% of GDP , considering the largest economies in the region, Jorge Roldos, deputy director of the Department of the IMF Western Hemisphere.

• Figures that show the brutal impact of the pandemic on Latin American economies

Apart from these resources, explains Roldos, the countries also spent about 3.5% of GDP in financing “soft” loans and guarantees , mainly to small and medium-sized companies (which are usually called support measures through liquidity instruments).



In that scenario, poverty and extreme poverty soared in the midst of a deep economic recession, which means that governments received less income and At the same time, they had more expenses.

The result has been a increase in debt and fiscal deficit , which will probably become one of the greatest challenges that the countries of the region will face when the emergency ends.

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