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Economies will only be reactivated if COVID-19 curve is flattened, says report

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*Proposes adoption of health, economic, social, productive policies to mitigate effects of a pandemic

A new joint report by the Economic Commission for Latin America and the Caribbean (ECLAC) and the Pan American Health Organisation (PAHO) reveals that economies of the Region will only be reactivated if the curve of contagion of the Coronavirus disease (COVID-19) pandemic is flattened. The report proposes a three-phase approach that includes the adoption of health, economic, social, and productive policies that aim to control and mitigate the effects of the pandemic, reactivation with protection, and rebuilding in a sustainable and inclusive way.

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Some countries have led the Region to become the current epicenter of the pandemic, topping global case numbers. As of 29 July, there have been more than 4.5 million cases of COVID-19 and almost 190,000 deaths in Latin America and the Caribbean. A significant number of countries remain far from achieving a sustained and significant flattening of the curve of contagion. The pandemic has also unleashed an unprecedented economic and social crisis, which, if urgent measures are not taken, could transform into hunger and humanitarian crisis.

According to the report, “Health and the Economy: A Convergence Needed to Address COVID-19 and Retake the Path of Sustainable Development in Latin America and the Caribbean”, the pandemic has profoundly affected the lives and livelihoods of people in the Region.

A scientist works on the analysis of a tumor on September 2, 2020 in Dijon Georges-FranÁois Leclerc Cancer Center, where a scientist developed a software to predict cancer recurrence odds. (Photo by JEFF PACHOUD / AFP)


From the start, the pandemic has caused the most abrupt recession in history which, according to ECLAC projections, will imply a regional drop in growth of -9.1 per cent in 2020, along with a rise in unemployment to 13.5 per cent, an increase in the poverty rate of 7.0 percentage points, which will reach 37.3 per cent of the population, and a sharpening of inequality with an average rise in the Gini index of 4.9 percentage points.

Health systems of the Region, which were already underfunded and fragmented prior to the arrival of COVID-19, have to face the pandemic with weaknesses in the performance of the health authorities’ steering role. Public health expenditure averages a mere 3.7 per cent of Gross Domestic Product (GDP), far from the six per cent target recommended by PAHO. A third of the population still faces some type of barrier to access the health services they need.

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According to the report released on July 30, 2020, at a joint press conference led by Alicia Bárcena, Executive Secretary of ECLAC, and Carissa F. Etienne, Director of PAHO, the high degree of inequality combined with the high levels of poverty, informality, lack of social protection and limited access to quality, timely health care, explain the high social costs that the pandemic is having in the Region.

The dynamics of contagion are also influenced by the high degree of urbanization – more than a third of the population live in cities with a million or more inhabitants – and the accumulated deficits in terms of overcrowding, lack of water and sanitation services, and crowded public transportation. Aside from the commitment and dedication of health personnel, the historical weaknesses of the public health systems have also contributed to the vulnerability of the Region.

The report argues that inequality in the Region positions certain groups in a particularly vulnerable situation, including older persons (85 million), informal workers (54 per cent of regional employment), women (who make up the majority of the informal workforce, participate in unpaid work and have greater exposure to domestic violence), indigenous peoples (60 million people and some communities whose existence could be threatened), people of African descent (130 million people in 2015), people with disabilities (70 million people) and migrants. All these groups require special attention to mitigate their vulnerable conditions.

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In terms of health, households finance more than a third of health care expenses with direct, out-of-pocket payments. Nearly 95 million people face catastrophic health expenses, and almost 12 million become impoverished due to these expenses. The average availability of doctors and hospital beds is less than half that of more developed countries, such as those of the Organisation for Economic Cooperation and Development (OECD), which presents significant barriers to access. Due to the pandemic, health care for other diseases has also been postponed or interrupted, which begins to be reflected in excess mortality that highlights the profound effects of the impact on supply and demand for services.

To address the short and long-term effects of the pandemic, ECLAC and PAHO propose a set of principles for action and policies, as well as a wide range of health, social and economic measures to be deployed in three nonlinear and interrelated phases: control, reactivation and reconstruction.

Three overarching messages emphasise the measures proposed by the Organisations to confront the pandemic: No economic opening is possible until the curve of contagion has been controlled, and reactivation is not possible without a clear plan to avoid a spike in contagion; health measures aimed at controlling the pandemic (including quarantine and social distancing) must be implemented in conjunction with social and economic measures aimed at mitigating the effects of the crisis, as this facilitates compliance with health measures; and rebuilding better implies promoting sustainable and inclusive development with equality at the center, advancing productive transformation and creation of a state of wellbeing.

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“Advancing equality is essential for the effective control of the pandemic and for sustainable economic recovery in Latin America and the Caribbean. We must respond to the Emergency and implement a strategy to overcome the structural weaknesses of economies and societies. Changing development strategy in the Region is therefore essential,” said Alicia Bárcena, Executive Secretary of ECLAC.

“We face an unprecedented challenge, which requires solid and well-funded health systems to overcome this crisis. Investing at least 6% of GDP in public health, with a particular emphasis on primary health care, not only protects achievements made in health but also ensures sustainable development and addresses rising poverty and inequality in the Region,” said Carissa F Etienne, Director of PAHO. “Health is a fundamental human right and access must be universal, with no one left behind. The health of both our communities and our economies depends on it,” she added.

The report concludes by outlining that the measures proposed by the Organisations rest on the need to coordinate health policies with economic, social, and productive policies. These include testing, contact tracing, and public health measures such as quarantine and social distancing, as well as the strengthening of health systems with a focus on primary health care and ensuring compliance with essential public health functions.

Basic Emergency Income (IBE) policies, the Bonus Against Hunger, and the protection of the productive sector should accompany these measures, which support health measures. Along with these immediate measures, a set of strategic approaches for reconstruction is outlined, recognizing health as a human right and public good guaranteed by the State, the strengthening of public health, the consolidation of universal and comprehensive social protection systems, the implementation of progressive fiscal policy and sufficient, efficient, effective and equitable public spending, acceleration in digital transformation, the reduction of regional dependence on imported medical products and changes in the productive measures, as well as a boost in green investment.

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