SANTIAGO, Chile – The Economic Commission for Latin America and the Caribbean (ECLAC) says despite the Regional Poverty Rate, which rose with the COVID-19) ppandemic, declining to a level similar to 2014 and reaching the lowest level on record in last year, and estimated 172 million people in Latin America and the Caribbean (LAC) still do not have enough income to meet their basic needs.
In addition, the UN organisation said 66 million of those people cannot buy a basic food basket.
According to the report “Social Panorama of Latin America and the Caribbean 2024: The Challenges of non-contributory social protection in advancing towards inclusive social development,” noted that the percentage of the population living in poverty in 2023 was 27.3 per cent, marking a decline of 1.5 percentage points compared with the year before.
But the figure is more than five percentage points vis-à-vis the figure in 2020, the most critical year of the COVID-19 pandemic. This is also the lowest figure registered since comparable records have been in place.
The extreme poverty rate covered 10.6 per cent of the region’s population, a figure 0.5 percentage points below that of 2022 but above 2014 levels.
“In total, 172 million people were living in poverty in 2023, of whom 66 million were living in extreme poverty,” ECLAC reported.
ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs, who presented the report, noted that the document indicates that poverty continues to affect working-age women more than men and that the percentage of children and adolescents in situations of poverty is considerably higher than that of other age groups. Poverty is also greater in rural areas (39.1 per cent) than in urban areas (24.6 per cent).
ECLAC also indicates that between 2022 and 2023, there were no significant changes to income inequality levels in the region, which remained stubbornly high.
Between 2014 and 2023, the Gini index experienced a slight reduction of four per cent, dipping from 0.471 to 0.452.
The Social Panorama of Latin America and the Caribbean 2024 also warns that the lack of social protection remains high in the region. In 2022, one out of every four households (23.5 percent) lacked access to social protection, either contributory or non-contributory.
Non-contributory social protection, ECLAC argues, is vital in the households of the first, lowest-income quintile, since one out of every two of those households accesses social protection via that channel.
“This means that policies for cash transfers or in-kind transfers (such as school meals) as well as labour inclusion programs are key for linking people with social services and making headway on eradicating poverty and reducing inequality.”
The report verifies that non-contributory pension systems (NCPS) play a central role in poverty reduction in old age. In the last 20 years, the coverage of NCPS among people aged 65 and over increased by more than 27 percentage points, and during that period poverty in this same population fell by 14.3 percentage points.
“The strengthening of social protection systems in Latin America and the Caribbean, in particular non-contributory social protection, is a strategic space for adopting an integrated approach that can have significant impact on poverty reduction, the diverse causes of inequality, and the low levels of social cohesion in Latin America and the Caribbean and, therefore, on the attainment of inclusive social development,” said Salazar-Xirinachs.
“Tackling the development crisis in the region necessitates moving towards universal, comprehensive, sustainable and resilient social protection systems. To that end, we must urgently reinforce the social institutional framework with technical, operational, political and prospective (TOPP) capabilities”.
According to the report, in 2023, social spending amounted to 11.5 er cent of gross domestic product (GDP) in Latin America, very similar to the 11.4per cent of GDP seen in 2022.
In Latin America, social public spending continues to be the main component of total public spending (53.3 per cent on average in 2023).
In the Caribbean, social spending as a share of total spending fell to 41.3 per cent in 2023, which further widened the gap with Latin American countries.
According to ECLAC, to make progress on eradicating poverty, it is necessary to establish an investment standard for non-contributory social protection of between 1.5 and 2.5 per cent of GDP, or between five and 10 per cent of total public spending.
“On average, the Social Development Ministries of 20 Latin American and Caribbean countries spent 0.8 per cent of GDP and three per cent of total public spending on non-contributory social protection in 2022.”
The report also includes a chapter on social protection in light of the care crisis and population ageing, a scenario that demands policies with a gender, intersectional and rights-based approach.
In the next 25 years, the population aged 65 and over will double (from 9.9 per cent to 18.9 per cent of the total population), numbering 138 million people by 2050.
“The sexual division of labour and the current social organization of care create gender gaps that manifest themselves throughout the life cycle and in the obstacles that women face to labor inclusion and social protection,” ECLAC said.
