Emergency Social Protection against the Impacts of the Pandemic in Latin America and the Caribbean
Explore Latin America's response to COVID-19 through emergency social protection measures and lessons learned for building resilient systems.
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Latin America and the Caribbean is undoubtedly one of the regions hardest hit by the health and economic crisis caused by the COVID-19 pandemic. In 2020, regional gross domestic product (GDP) and investment fell by 6.8% and almost 20%, respectively. The pandemic has also had a major impact on the labor market, with sharp falls in employment and labor force participation, resulting in historic rises in unemployment, all of which affected women, young people and low-income workers significantly.
Meanwhile, global wealth increased by 7.4% in 2020 due to movements in stock markets that negatively affected distribution channels, particularly in countries where social protection measures arrived late and had neither the scope nor coverage to absorb the consequences of the crisis. It should also be noted that the impact of the crisis increased due to almost zero growth in the countries prior to 2020, as well as weaknesses in social protection systems and health systems.
Social protection measures implemented during the pandemic have played a key role in mitigating the devastating economic and social effects of COVID-19 in Latin American and Caribbean countries. The reaction was swift, as between March and May 2020 alone, 33 countries in the region announced 300 noncontributory social protection measures. The announcements continued, but at a decreasing rate, reaching a cumulative total of 468 measures by October 2021, 67 of which were announced in 2021.
As the crisis became prolonged, the characteristics of the measures varied in terms of coverage, duration and scale. Emergency, noncontributory social protection measures were notable for their use of cash transfers (45% of the measures up to October 2021) and speed of design, implementation and delivery, as well as varying widely in terms of amounts, coverage, adequacy and duration of the entitlements implemented. The countries of the region supplemented entitlements with in-kind transfers and other support, such as tax relief, payment facilities or price fixing, and ensuring the continuity of basic services. Other key innovations were the incorporation of information and communication technologies, the improvement of social information systems and registries, the creation of new registries of potential participants and the adoption of new approaches or instruments to identify potential recipients of emergency programs.
The implementation of these measures, both pre-existing and new, has made it possible to achieve quite high overall coverage of the population in the region which, due to a more active search for potential recipients, includes populations previously invisible in information registries (informal workers, migrants and young people, among others). In Latin America and the Caribbean, it is estimated that cash and in-kind transfer measures have covered, on average, 64.4% of the population since the beginning of the pandemic — 111.5 million households comprising 422 million people. Most of these measures have specifically targeted the population living in poverty and vulnerability. Evaluations of emergency social protection measures indicate that they have curbed the adverse effects on the poverty and inequality rates, but not enough to prevent them from increasing, particularly in the case of extreme poverty.
This paper mainly analyzes the responses in terms of emergency, noncontributory social protection measures and other forms of support to households announced in Latin American and Caribbean countries in 2020 and 2021. Where information permits, reference is also made to the experience of European countries in dealing with the pandemic, which reveals the key role played in that region by employment protection and social security measures, in particular. Therefore, this document also mentions measures related to contributory social protection in Latin America and the Caribbean, focusing on formal workers under various instruments, such as unemployment insurance, and highlighting their main characteristics and innovations in terms of design and implementation. The analysis offers lessons to be learned for moving toward income guarantees and emergency social protection in future crises in order to protect people and their households in situations where labor income disappears or diminishes. The aim is to contribute to the discussion on possible ways to advance toward universal, comprehensive, resilient and sustainable social protection systems, which would offer a better and faster response to crises and contexts of high uncertainty.