Chile surpassed Brazil and was the country that made the highest social spending in the region in 2021

Amid the severe effects of the pandemic on the economy and the labor market, state aid delivered by the government led to Chile being the country that allocated the most resources to social spending last year.

According to the annual report Social Panorama of Latin America and the Caribbean 2022, which includes new data on inequality and poverty in the region and on the silent crisis of education in the context of the Covid pandemic. Prepared by the Economic Commission for Latin America and the Caribbean (ECLAC), social spending in the country reached 24.9% of the Gross Domestic Product (GDP) in 2021.

Below were Barbados and Brazil with 17.8%, 17.3%. In this way, Chile increased its social spending from 20.2% of GDP in 2020, while Brazil reduced it compared to 22.5% that year, thus ceasing to lead the region.

This edition of the Social Panorama analyzes the so-called silent crisis of education and the need to advance in the transformation of education as a basis for sustainable development. A chapter is included on gender inequalities in educational and employment trajectories in the region.

However, the updated poverty figures in Chile were not included, since the results of the Casen survey have not yet been reported.

In this regard, Rolando Campos, direct from the ECLAC Statistics Division, said that “we have the Casen 2020 survey whose data reflected an estimate of poverty of 14.2% and extreme poverty of 4.5%. In 2021 the survey was not carried out, but according to the projections, we would have some downward adjustments for 2021 and 2022.

He added that “There would be no difference in the proportion of poverty between 2021 and 2022. All this, because the level of transfers in 2021 that Chile had is the highest compared to all the countries of the Southern Cone of Latin America.”

The report maintains that despite the slight decrease registered in 2021, projections indicate that poverty and extreme poverty rates will remain above pre-pandemic levels in 2022 in Latin America and the Caribbean.

“After a strong growth in poverty and a slight increase in income inequality in 2020, as a consequence of the Covid-19 pandemic, 2021 reported a reduction in the rates of extreme poverty and poverty and a growth of the middle income strata, which was not enough to fully reverse the negative effects of the pandemic”explains the post.

Thus, in 2021 the poverty rate in Latin America reached 32.3% of the total population of the region (a decrease of 0.5 percentage points compared to 2020), while the extreme poverty rate was 12 .9% (0.2 percentage points less than in 2020).

ECLAC projects that by the end of 2022 poverty will be at 32.1% of the population (a percentage equivalent to 201 million people) and extreme poverty at 13.1% (82 million), that is, a slight decrease of the poverty level and a slight increase in extreme poverty compared to 2021, due to the combined effects of economic growth, the dynamics of the labor market and inflation.

These figures imply that an additional 15 million people will be in poverty compared to the pre-pandemic situation and that the number of people in extreme poverty will be 12 million higher than that registered in 2019.

The projected levels of extreme poverty in 2022 represent a setback of a quarter of a century for the region, ECLAC said.

As in previous years, ECLAC said that the incidence of poverty is higher in some population groups in the region: more than 45% of the child and adolescent population lives in poverty and the poverty rate for women from 20 to 59 years is higher than that of men in all countries. Similarly, poverty is considerably higher in the indigenous or Afro-descendant population.

In 2021, income inequality (measured by the Gini index) decreased slightly compared to 2020 in Latin America, standing at 0.458, at levels similar to those of 2019.

Meanwhile, projected unemployment for 2022 represents a setback of 22 years, especially affecting women, for whom unemployment rose from 9.5% in 2019 to 11.6% in 2022.

“The cascade of external shocks, the slowdown in economic growth, the weak recovery of employment and rising inflation deepen and prolong the social crisis in Latin America and the Caribbean,” stated José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC, during the presentation of the document.

“It has not been possible to reverse the impacts of the pandemic in terms of poverty and extreme poverty and the countries face a silent crisis in education that affects the future of the new generations,” he warned.

Latin America and the Caribbean suffered the longest educational blackout internationally (on average 70 weeks of school closures compared to 41 weeks in the rest of the world), exacerbating pre-existing inequalities in access, inclusion, and quality.

In this period, one of the main limitations for educational continuity were inequalities in access to connectivity, equipment, and digital skills. In 2021, in 8 of 12 countries in the region, more than 60% of the poor population under 18 years of age did not have connectivity at home.

If ECLAC does not act now, it warns of the “risk of permanent scarring in the educational and employment trajectories of the younger generations” in the region.

According to the United Nations regional organization, learning losses have already been measured in the Caribbean and, in Latin America, the percentage of young people between the ages of 18 and 24 who neither study nor work for pay increased from 22.3% in 2019 to 28.7% in 2020, especially affecting young women (36% of them were in this situation, compared to 22% of men).

Chile surpassed Brazil and was the country that made the highest social spending in the region in 2021 – La Tercera