The United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) supports an urgent guaranteed minimum income (GMI) as proposed in Colombia’s senate.
The proposal was coined by some 50 senators earlier this week as a temporary measure to prevent hunger and lift the burden on businesses as an urgent response to the coronavirus crisis.
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In a virtual press conference, ECLAC Executive Secretary Alicia Barcena took the proposal even further and urged countries in the region to consider making the GMI a permanent element of their social policies.
The ECLAC chief did propose a GMI lower than the one proposed in Colombia’s congress that would cost 4% of the country’s gross domestic product (GDP). The regional economic commission proposed not to exceed 2.8%.
According to Barcena, the crisis caused by the coronavirus pandemic “has exposed structural problems in the economic model and failings of social protection systems and welfare schemes” that require an urgent and radical reform.
Last month, the ECLAC had already warned that old economic recovery models would not work because of the record-low commodity prices.
ECLAC Executive Secretary Alicia Barcena
Priority: fighting hunger
Without radical measures, the ECLAC said it feared than people living below the poverty line in Colombia could go from 29% in 2019 to between 30.4% and 32.5% this year.
Extreme poverty would affect between 11.3% and 12.7% percent of the population by the end of this year compared to 10.3%.
The ECLAC estimated that the upper-middle class and the country’s richest are at the least risk of being affected by the crisis that would be further expanding the wealth gap in the region.
ECLAC
According to the World Food Program, Venezuela, Colombia and Ecuador are facing imminent famine, with unforeseen consequences for, for example, public security and social stability.
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Groups believed to suffer most from economic downturn
How these groups will suffer
(Source: ECLAC)
A reshuffling of global economic policies
The ECLAC expects more protectionist policies, for example, in the United States, which — apart from the record-low commodity prices — would make exports hardly efficient for the region’s economic activity.
The economic commission had already called for more regional economic cooperation within Latin America and strengthening ties with Europe.
ECLAC
To prevent that the imminent economic collapse disintegrates societies, the ECLAC urged not to only implement radically new economic policies, but to come to new fiscal agreements and lobby a renegotiation of debt payments with developed nations.