By Adam Jourdan, Aislinn Laing, Maria Cervantes and Diego Oré
BUENOS AIRES / SANTIAGO / LIMA / MEXICO CITY (Reuters) – When the coronavirus hit Chile and accused Lorena Rodríguez of her work, the 47-year-old nanny took the painful resolve to pawn her jewellery, gifts from previous decades, for money.
Like more than a portion of Latin Americans, she worked in the informal sector, concerned about two young men in an upscale community in the coastal city of Valparaíso, but living comfortably off a not unusual source of income with her husband of 700,000 pesos ($ 905 ) year. month.
Then all of a sudden, concerned about the threat of infection related to Rodriguez’s bus ride to work, the circle of relatives cut off their homework in March.
Without a contract, he would not be able to make benefits such as unemployment or welfare benefits, lives in one of the richest countries in the region, and temporarily exhausted an emergency payment of 100,000 pesos ($126) from the government, forcing the lender to resort to.
“It was a last resort,” said Rodriguez, who swam her rings and bracelets for a loan of 340,000 pesos for her and her husband, a retired member of the armed forces.
“I had a steady job. We lived pretty well, at least too many worries. It’s hard to see where all this is going to end now. “
Millions of middle-class members in Latin America are also mired in poverty, as COVID-19 has highlighted the fragility of social protection networks and the lack of monetary strength of governments. The region’s labour market has been more affected than anywhere else in the world.
After the economic stagnation and crisis of the 1980s, Latin America saw its average elegance thrive thanks to the commodity boom that stimulated expansion in the 2000s and helped pull 60 million more people out of poverty.
The region of 650 million more people will now see its economy contract by more than 9% this year, according to UN estimates, the worst in the world to come.
Poverty is expected to reach 2005 levels.
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Many economists argue that the crisis has highlighted Latin America’s forgetfulness of long-standing weaknesses: reliance on low-productivity sectors such as mining and agriculture, the inability to attract more staff to formal jobs, and the lack of effective tax systems to redistribute elite wealth. .
“This crisis serves as a reminder to mobilize against the disparities and gaps that have led to an increasingly fragile world,” Argentine Chancellor Felipe Sola said at a recent G20 meeting.
According to Asier Hernando, regional director of the Charity Oxfam, the pandemic can push 52 million more into poverty and leave 40 million more unemployed. Indigenous women and teams will be particularly affected.
“There’s no mattress. If you fall, you fall a lot,” he said. “This can break the region’s social contract and lead to years of great social conflict. “
After protests in several South American countries last year, the pandemic has shed new light on hunger, inequality and lack of state support.
In Chile, where the 2019 protests turned violent, the recession is rekindling anger; in Peru, Congress attempted to dismiss the President and the Minister of Economy for lack of small businesses; in Venezuela, which was already falling into poverty before COVID-19, anti-shortage protests have intensified.
ASCENT AND FALL
Although the virus came late to Latin America, it hit hard.
Five of the world’s 10 most inflamed countries are in the region, which accounts for 34% of the world’s deaths, while accounting for approximately 8% of the world’s population.
Epidemiologists cite poverty as a cause.
With up to 58% in the casual sector, according to the International Labour Organization (ILO), many cannot quarantine or starve.
Nearly 2. 7 million companies, or nearly 20% of enterprises, will close, according to the United Nations Economic Commission for Latin America and the Caribbean (CEPALC). The ILO says another 34 million people have already lost their jobs
Only 12% of Latin American staff are entitled to unemployment benefits, up from 44% in North America and Europe.
This has exposed an army of freelancers and would-be marketers, which can hamper expansion in the coming years. [NL1N2CV1B4] [nL3N2ER2XQ]
“I haven’t been paying for my daughter’s school for two months,” said Goodny Aiquipa, a 36-year-old clothing broker in the Peruvian capital, Lima.
Her parents had gone from the field to painting as street vendors, but she was able to build a house, pay for personal studies and vacations, and buy a car.
Now the epidemic in Peru, the deadliest in the world according to the capita, has forced it to close its T-shirt shop. “I’m a month in electric power and water. I spent what I had to pay to rent my place for food. “she said.
The poorest were the most affected in terms of loss of tasks, while approximately 8 out of ten people already lived on a source of income less than 3 times the poverty line, said Alicia Bárcena, Executive Secretary of CEPALC.
“It’s very difficult to communicate about average elegance when those other people are very vulnerable,” Bárcena said.
A FIRM SCHOOL
Regional governments also don’t have the money to emulate stimulus packages in the United States or Europe. Most suffer from low tax revenues and higher debt.
In Guatemala, where social spending is among the lowest in the region, marketers Aura Cartagena and Erwin Pozuelos expected monetary support in vain.
To fund their school in Guatemala City, the couple became indebted and sold their cars and belongings to pay the 25 employees, before all they finished their doors.
“We have no single solvent assets, everything is indebted,” Cartagena, 51, said in the small room where the family circle was installed, holding back tears.
Many giant corporations, from giant airlines to energy corporations, have been forced to lay off or close their doors.
Economists warn that the crisis will take millions of people from salaried tables to casual jobs with lower wages, fewer benefits, and less protection.
Even in Mexico, the region’s second-largest economy, Andrés Manuel López Obrador’s left-wing government has moved away from a benefit bailout amid considerations about his finances. poverty, analysts say.
Outside a kitchen in Mexico City, Carlos Alfaro, a 51-year-old Uber driving force who also had a cleaning business for a man, expected stew, rice and bread for his 77-year-old mother and two children.
The paintings dry out, forcing him to look for alms. “I never imagined I’d have to come and do this,” he said.
The United Nations World Food Programme predicts that another 16 million people in the region could face severe food shortages this year.
In Brazil, the largest economy in the region, President Jair Bolsonaro’s far-right government has abandoned social austerity policies that, in the short term, have reduced poverty.
Despite Brazil’s social spending, which even the government admits cannot be supported, staff to move up on the social ladder have had difficult times.
Douglas Felipe Alves Nascimento, 21, moved to Sao Paulo this year to work at a textile company after years of part-time construction.
Enough salary to rent a room, buy key family pieces and start graduating from the best school, but when COVID-19 arrived, he was one of the first to lose his job.
In July, he sold his belongings to cover unpaid rent and turned to a Catholic project to buy food and clothing.
“Everything I had done the 3 months of work, it took me a month of pandemic to lose everything,” he said.
(Reporting through Adam Jourdan in Buenos Aires, Maria Cervantes and Marco Aquino in Lima, Amanda Perobelli in Sao Paulo, Diego Ore and Anthony Esposito in Mexico, Sofia Menchu in Guatemala City, Nelson Acosta in Havana, Rodrigo Garrido and Aislinn Laing in Santiago; Edited through Andrew Cawthorne)