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ECLAC: Caribbean growth in 2021 won’t fully reverse pandemic effects

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«This expansion, however, will not manage to ensure sustained growth, because the social impacts of the crisis and the structural problems in the region have deepened and will continue to do so during the recovery.»

Presenting the report of the study during a virtual news conference, ECLAC Executive Secretary Alicia Bárcena urged regional governments to keep emergency transfer policies in place «to bolster» and sustain the recovery

A regional UN agency is warning that despite projected growth in the region for 2021, it will still be insufficient to reverse the adverse effects of the COVID-19 pandemic.

In a new report titled Recovery Paradox in Latin America and the Caribbean , ECLAC notes that the average growth estimate for the region in 2021, around 5.2 per cent, «reflects a rebound from the deep contraction of six per cent» in 2020.

«This expansion, however, will not manage to ensure sustained growth, because the social impacts of the crisis and the structural problems in the region have deepened and will continue to do so during the recovery.»

Presenting the report of the study during a virtual news conference, ECLAC Executive Secretary Alicia Bárcena urged regional governments to keep emergency transfer policies in place «to bolster» and sustain the recovery.

«We need policies for a transformative recovery with an emphasis on investment; industrial policies and technologies to drive growth in sectors that are more technology intensive and that generate quality jobs; restructure health and education systems; sustain the transfers; universalise basic emergency income; implement bonds to fight hunger; ensure access to a basic digital basket; strengthen support for MSMEs; push cross-cutting and sectoral policies to move towards a new model of development,» Bárcena said.

According to ECLAC’s new projections, in 2022, the region will grow 2.9 per cent on average, reflecting a a slowdown relative to the expected rebound in 2021.

«There is nothing to indicate that the low growth dynamic prior to 2020 is going to change. The structural problems that held back growth in the region before the pandemic have become more acute, and this will have negative repercussions on the economic and labour market recovery, despite the uptick in growth in 2021 and 2022,» the report noted.

In terms of per capita income, it said the region «continues on a path towards a lost decade», and that the current growth rate is unsustainable.

«There exists a risk of returning to mediocre trajectories, with insufficient investment and employment, and major environmental deterioration. «The crisis brought on by the pandemic has increased inequality and poverty, mainly affecting women, schoolchildren and older people. Furthermore, it came at a moment when the regional economy was stagnating, unable to tackle the long-term investment crisis, employment and sustainable productive diversification,» the report added.

Vaccination gaps As of June 30, ECLAC reported that the region had a COVID death toll of more than 1.26 million, or 32 per cent of the world total, «despite the fact that the region’s population represents just 8.4 per cent of the world total, and presents major gaps in vaccination rates compared to developed countries.

«To close them will require cooperation and integration,» it said, adding that, in the 30 countries of Latin America and the Caribbean, the percentage of fully vaccinated out of the total population amounts to just 13.6 per cent; while, in the European Union, it is at 34.9 per cent and 46.3 per cent in North America.

In the past year, the report states the rate of extreme poverty has reached 12.5 per cent, with poverty at 33.7 per cent.

The report indicates that emergency transfers to the most vulnerable sectors served to offset the rise in poverty in the region in 2020, which moved from 189 million the previous year to 209 million people, when it could have been 230 million; and in the case of extreme poverty, from 70 million people in 2019 to 78 million, when it could have been 98 million.

These transfers benefited 326 million people, or 49.4 per cent of the population, ECLAC reported, while noting that inequality in income distribution increased.

The agency also made reference to a moderate to severe food insecurity within the Latam block, which it said had reached 40.4 per cent of the population in 2020, 6.5 percentage points more than in 2019.

«This means there were 44 million more people experiencing moderate or severe food insecurity in the region, with 21 million suffering severe food insecurity,» ECLAC reported.

CMC

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