Mexico contributes half of the increase in poverty in Latin America

21/03/2021

Mexico did not take sufficient measures to protect households during the pandemic and had one of the lowest emergency budget allocations: 0.42% of GDP, below Brazil, Bolivia, Peru, Salvador, and Honduras, according to an ECLAC report.

Poverty in Mexico: at least 20 million young Mexicans have no money to buy a basic basket. Photo: Flicker
Poverty in Mexico: at least 20 million young Mexicans have no money to buy a basic basket. Photo: Flicker

The most recent report of the Economic Commission for Latin America (ECLAC) shows a bleak outlook for the region and the need for a different economic reactivation, with inclusion and equality. The current economic recovery is slow and inertial, increases inequality, and does not reduce poverty.

Particularly noteworthy are the poor results for Mexico due to the growth of poverty. ECLAC's "The Social Panorama of Latin America 2020" projects an increase of at least 22 million more people in poverty in the region, of which Mexico would contribute at least half.

The ECLAC report documents that Mexico did not take sufficient measures to protect households during the pandemic, and had one of the lowest emergency budget allocations: 0.42% of Gross Domestic Product. This very low investment contrasts with 4% in Brazil, 2.8% in Bolivia, 2.3% in Peru, and even below the 1.85% allocated by El Salvador and 1.4% in Honduras, countries that evidently have a less developed economy than Mexico. Therefore, our country has no reduction in poverty due to the transfers.

Mexico does not have very high social spending either. In fact, it is at the average for Central America. And well below the budget allocated by its southern sister countries: Chile, Brazil, Argentina, Uruguay. All this, of course, as a proportion of GDP, i.e., the size of each economy. Economic reactivation with equality requires the economic and labor inclusion of women. Mexico has one of the lowest female labor participation rates.

In order to grow, women must be included in the labor force. ECLAC reminds us that the "care economy" is a strategic sector for reactivation and growth.

That is why the creation of the National Care System, already approved as a constitutional reform by the Chamber of Deputies, is so relevant. But it is important that the system is not a "paper promise". It is necessary to allocate a budget to create child care centers and also to remunerate care work in homes. The approval of legal reform to achieve wage equality between men and women is a good measure, but it depends on its practical application.

To be effective, the plan cannot be the government's alone. A serious plan requires a great social agreement, with the participation of the productive sectors and other civil society actors, as well as state governments.

By Mexicanist