A United Nations body that monitors Latin America and the Caribbean is raising the region’s growth prospects in 2021 to 5.2 per but has also warned that the COVID-19 pandemic has caused greater joblessness and poverty which are not going away quickly. In a recent report from the Economic Commission for Latin America and the Caribbean (ECLAC), the body said the COVID-19 pandemic had destabilized the Caribbean and Latin America.
However, governments have been advised that the growth forecast for this year “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”.
The Recovery Paradox in Latin America and the Caribbean. Growth Amid Persisting Structural Problems: Inequality, Poverty and Low Investment and Productivity were presented by ECLAC’s Executive Secretary, Alicia Bárcena at a recent virtual session. The ECLAC top official warned governments that the economic crisis caused by the pandemic will drag on and that they should continue to pursue policies that bolstered an economic recovery that was sustainable over time, that was juster and environmentally friendly. According to Bárcena: “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, universalize basic emergency income, implement bonds to fight hunger, ensure access to a basic digital basket, and strengthen support for MSMEs.”
Equally important, the ECLAC official explained that the structural problems that existed in the Caribbean and Latin America which held back growth before the pandemic have become more acute, and will continue to be a drag on economic and social progress for most citizens in this part of the world. This will occur despite the increased economic growth projections for the rest of 2021, she noted.
According to the document, the current growth rate is unsustainable and the risk of “returning to mediocre trajectories, with insufficient investment and employment, and major environmental deterioration” exists. It was pointed out that the pandemic and its related events have increased inequality and poverty, mainly affecting women, school children, and older people.
Furthermore, ECLAC indicated that the pandemic was now leaving 2021 in a much worse environmental state that will be difficult to reverse.
And even though there were temporary improvements in air quality and a reduction in greenhouse gas emissions, emissions will increase by five per cent this year, while in 11 countries of the region a 35 per cent drop was observed in the budget or spending for environmental protection.