No country in Latin America increases in extreme poverty like Mexico due to the Covid-19 pandemic and a drop in the gross domestic product (GDP) that is estimated to be negative 6.5 percent, the Economic Commission of Latin America reported, and the Caribbean (Cepal).
According to the agency, the number of extreme poor – who cannot meet several of their basic needs such as food, drinking water, shelter, health, education – increase by 4.8 percent this year.
Furthermore, in terms of poverty, it would increase by 5.9 percent, the highest rate after Argentina. With this, Mexico ranks among the five countries in the region where the Covid-19 pandemic threatens to leave the largest increases in inequality.
Alicia Bárcena, Executive Secretary of ECLAC, stressed that this increase in the poor does affect the fact that Mexico is going to have such a sharp contraction in GDP, but also the declines in the number of remittances that the country can suffer.
In this sense, AMLO denied that GDP is an obsolete measurement, as the Mexican President has reiterated in recent days. “It is incomplete to reflect everything that is happening in the countries, but it is a good indicator to see what is happening in the economic sectors (…) It is important not to completely discard it,” said Bárcena.
In his opinion, “the government of Andrés Manuel López Obrador has prepared to combat the effects of the pandemic” and has decided to mainly support the most vulnerable sectors of the population. “It depends on the success” of these measures, how the poverty systems will be reflected at the end of the year.
“In Mexico, there will be significant growth in poverty as well as in the fall in GDP (…) but we will have to wait to see the result of the measures that the government is taking to protect the most vulnerable population, indigenous people and older adults “, said the official.
The executive secretary presented the report “The social challenge in times of Covid-19”, the third in a series that deals with the effects of the pandemic in Latin America, from ECLAC headquarters in Santiago, Chile.
According to its metrics, which it explained are consistent with the measurement of “income poverty” of the National Council for the Evaluation of Social Development Policy ( Coneval ), it could take 13 years before having poverty levels prior to Covid-19. According to Cepal metrics, Poverty in Mexico can increase by 5.9% and extreme 4.8%. Coneval projects an increase in poverty greater than 7.2% and one of 7.5% in indigence.
Up to 10 million will be in extreme poverty in Mexico
In the midst of the most critical phase of the contingency, Coneval presented the analysis of Social policy in the context of the pandemic due to the SARS-CoV-2 (Covid-19) virus in Mexico, in which it anticipates increases in poverty due to income, labor poverty and highlights the absence of public policies on the matter.
The document states that four out of ten people in the country are in a vulnerable situation, and although between 2008 and 2018 a decrease in poverty of 2.5 percentage points was achieved, from 44.4% to 41.9%, this year, it will face extraordinary factors, in addition to job insecurity and gaps in access to health, food, education, housing, and social security rights.
Among the effects of the crisis caused by the new virus, a fall between 2% and 6% of the Gross Domestic Product (GDP) is estimated, as well as the loss of formal jobs, factors that will have potential effects on national economic growth.
The Coneval pointed out that the pandemic will not only cause the loss of human lives, but will affect the supply of goods and services as a result of the fall in the occupation of the labor force and the interruption of supply chains.
For the analysis, the Council considered two possible scenarios based on information from the National Institute of Statistics and Geography (Inegi), specifically the National Survey of Income and Expenditure in Households (Enigh) and the National Survey of Occupation and Employment (ENOE) .
In the first scenario, the various projections for the contraction of GDP that point to it being around 6% were examined for 2020, considering that in 2009 the variation in GDP was -5.3% and between 2008 and 2010 there was a -4.64% drop in revenue; The Council estimated for this year a drop of 5% in per capita income.
While in the second scenario it is expected that in the face of the absolute fall in the income of all individuals, the population in urban poverty will be the most affected by the health contingency, and the effect of the crisis is directly due to the loss of sources of income. , either for economic or health reasons.
Both perspectives were adjusted to the lines in force in March of this year with the inflation expectations of the Bank of Mexico as of August 2020.
The document specifies that although cash transfers by the government are important, strategies must be considered for the containment of poverty, and to protect the population that in 2018 was not in this condition, who due to the current crisis They will be affected in their income and may face vulnerable conditions.
On the other hand, it highlights that women will face the crisis with greater disadvantages, since they represent 72.8% of the total number of people employed in the health systems in Latin America, and the increase in domestic work is added.
The Coneval indicated that the recessions of 1994 and the financial crisis of 2008 evidenced that, despite the fact that Mexico is a middle-income country, high levels of poverty and inequality accentuate the negative impacts on society in the face of economic shocks, which affects the most vulnerable.
Source: eleconomista.com.mx, jornada.com.mx, eluniversal.com.mx
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