World Bank officials fear income reduction and reliance on food imports could leave more unable to cover basic needs - by Marlon Madden
June 22, 2022
June 22, 2022
June 22, 2022
By Marlon Madden
Officials from the World Bank are urging Barbados and other countries in the Caribbean and Latin America to urgently provide protection for vulnerable households, as they warn that more people could plunge deeper into poverty in the coming months.
Delivering a summary of a World Bank Group study over the past two years on the welfare impacts of COVID-19 on households, Country Director for the Caribbean Lilia Burunciuc and Practice Manager and Lead Economist on Poverty and Equity Ximena del Carpio also stressed the need for quality data for targeted policies and for policies to include assistance for those just above the poverty line.
Presenting a summary of the findings during a one-hour discussion on Tuesday entitled Taking the Pulse of the Caribbean, del Carpio indicated that the vulnerability of individuals in Latin America and the Caribbean increased significantly over the past two years.
She specifically raised alarm over the drastic reduction in income and the increase in food and nutrition insecurity.
“What we see is that there has been drastic income reduction . . . and this has implications on what types of services people can access, and of course on food but also shelter and water and other services,” said Ximena.
She explained that the dramatic fall-off in income was from labour, social transfers, remittances and other sources.
“The share of households that are able to cover their basic needs as of the end of 2021, this is very worrisome,” she said.
The data showed that only 11 per cent of households in Haiti, 30 per cent in Jamaica and 36 per cent in Guyana were able to cover their basic needs up to December 2021. This is below the Latin America and Caribbean average of 46 per cent.
The research, which included some 24 countries, showed that the percentage of household that ran out of food due to lack of money or other resources increased on average by about 20 per cent by the end of December last year.
Pointing to the rising fuel and food prices over the past year, Ximena said that at the end of 2021 there was already a problem with households being unable to access food due to a lack of money or unavailability of products.
“Since then the war [in Ukraine] has erupted so this we expect to be even a worse outcome for most countries – both higher oil prices and food prices,” she said, as she indicated that it was a “huge concern” that currently more than 80 per cent of the region’s food needs are satisfied by imports.
“This is an area where, as a bank, we are quite concerned and we continue to monitor it to see where assistance can be provided,” she said.
Ximena said leaders should be careful not to ignore those who are just above the poverty line when they come up with policies to assist the most vulnerable.
“The moment one shock hit, and that was pre war, many of the households fell into poverty. Many of the social protection and safety net programmes helped many of these households to actually stay in the vulnerability category and not stay in poverty, which is great. But that is not sustainable over the long-term especially when we are having human capital losses because people will not be able to fend for themselves,” she explained.
She said the category of people just above the poverty line, if not helped, to mitigate against one more shock they are going to fall and become “structural poor” rather than “temporary poor”.
“That is where we really need to work on to prevent them from falling. The poor themselves may fall into extreme poverty or destitution. So there is a shift that we need with an urgency to prevent,” said Ximena.
However, with quality data still an issue, the World Bank official said she feared that proper policies and reaching the people who need help the most will be an uphill task for many countries.
“We need to make sure that we understand the profile of the people that are currently in need of help. The profiles are different. For example, if you are educated and formerly employed you will need one type of assistance . . . those people were not previously registered. So they were not in the radar of the safety net,” she said.
Also stressing the need for data to make decisions, Burunciuc said it can help with policy design for the future in an effort to address a range of issues including gender gaps.
Both officials also raised concern about the slow pace of the region’s tourism recovery when compared to other regions, the continued high levels of COVID-19 vaccination hesitancy, and the worrying trend of people leaving the labour force to enter the informal sector.
The World Bank study also showed that while attendance for schools improved there were signs of deterioration in quality education, and although vulnerability to natural hazard is high, the preparedness is insufficient. ([email protected]