Low growth, inequality and poverty, the economic walls of Mexico and Central America: Cepal

Mexico Y Central America They not only have to alleviate the ravages of Covid-19, but also the economic inequality that the region is experiencing, said the Economic Commission for Latin America and the Caribbean (Cepal).

“What a tragedy in Central America, the 10% of the population with the highest income earned 70 times more than the 10% with the lowest income. It is not only a problem of poverty, but also of inequality (…) It cannot be that a few families concentrate income and wealth in all these countries ”, commented Alicia Bárcena, head of the Cepal, in the presentation of Comprehensive Development Plan at the Meeting of Ambassadors and Consuls 2022.

The head of the international organization added that the region has been in economic stagnation for 10 years. Only in Mexico, there is a record of growth of 2.1% in the last decade. Meanwhile in Guatemala Y Honduras ranges from 3 to 3.5%, in the same period.

“They are low growth rates that do not allow a greater rebound (…) in 2021 the rebound was a paradox. There is euphoria as if this were the great exit and this is not just a statistical rebound (…) it worries that we are going to return to a lower growth rate ”, added the president of the commission.

Today the world Bank adjusted its growth estimate for Mexico in 2021; the projection was revised downwards. The bank estimated a 5% growth from 5.7% projected three months ago. Likewise, by 2022 the international body expects the country to grow 3%, while for 2023, only 2.2 percent.

In addition to all the above, the poverty of the region “is to cry out loud.” In 2020, in Mexico, 43.9% of the population in Mexico is in a situation of poverty, that is, 55.7 million people, according to the National Council for the Evaluation of Social Development Policy (Coneval). The pandemic added more than 3.8 million newly poor people.

In parallel, the Cepal revealed the case of Honduras, where 58.6% of the population is in poverty and 26% in extreme poverty.

For the international commission, remittances have been a buffer for families in the region during this economic crisis caused by the pandemic. Estimates of the world Bank reveal that remittances to Latin America and the Caribbean will increase 21.6% in 2021 compared to 2020.

“Remittances have been a relief, there is no doubt, but the poor migrants are still financing the poor,” Bárcena commented.

Last week, the Bank of Mexico (Banxico) revealed that remittances sent by nationals living abroad amounted to 42.168 million dollars between January and October. The amount has already exceeded the figure of 40.605 million dollars received in all of 2020.

Bárcena acknowledged that the challenge for the Central American region is to fight at the root the structural problems that cause migration such as lack of employment, the economic crisis, violence, insecurity and climate change.

According to data collected by the CepalCentral American youth between 15 and 24 are the ones who are migrating the most due to lack of employment or the economic crisis.

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