Millions of Mexicans threatened again by poverty due to the pandemic



As happened a decade ago with the Great Recession, millions of Mexicans could fall into poverty again due to the economic crisis that will trigger the COVID-19 pandemic, Coneval head José Nabor Cruz, the body in charge of assess poverty.

In an interview with Efe, the executive secretary of the National Council for the Evaluation of Social Development Policy (Coneval) explained that in the financial crisis from 2008 to 2010 "there was an increase of three million poor", reaching 52.8 million in 2010.

Although it is "complicated" to speak of the exact number of poor Mexicans at the end of the crisis, Cruz did consider that there is an "analogy" with the current reality and that of a decade ago, and this will lead to an increase in "moderate poverty" , but not extreme.

Mexico currently accumulates 7,497 cases and 650 deaths of COVID-19, although the authorities estimate that the peak of cases will be recorded in May.

In the absence of the formalization of an expert council, the Mexican government decreed until May 30 the health emergency and the closure of all non-essential activities, although it has not imposed an absolute quarantine due to the great informality.

The impact in a country with a weak economy - GDP contracted 0.1% in 2019 - will be very substantial.

Employers estimate the loss of millions of formal jobs and institutions such as the International Monetary Fund (IMF) estimate that GDP will fall by 6.6%.

CONSTANT FIGHT AGAINST POVERTY

Mexico has been fighting poverty for decades. Between 2008 and 2019 the percentage of poor people has decreased slightly, from 44.4% in 2008 to 41.9% in 2018.

While in absolute numbers, the number of poor people increased from 49.5 million to 52.8 million, according to Coneval.

In between, there have been several changes of government and different social measures to curb the huge inequality.

All this has proved insufficient and the world crises prove it. And the key is, he explained, the "weakness of the national labor market".

INFORMALITY, THE GREAT OBSTACLE

For Cruz, the main obstacle that Mexicans may now face in this 'sui generis' crisis is food shortages, inflationary risks and the increase in informality, which today represents 56.2% of total employees.

"These are some of the variables in which we can unfortunately see setbacks" in recent years, he said.

Although the Executive has urged all companies to avoid layoffs, the reality is already giving dangerous signs.

Out of a universe of 20.6 million formal jobs, the country lost 346,878 formal jobs from March 13 to April 6, when the crisis was just beginning.

In this context, Cruz positively valued a possible rapid recovery in tourism -which contributes 8.7% of GDP- because it could reduce informality.

"The activities in the services, commercial and specific tourist sectors that can be recovered in the second half of the year may contain this increase in informal activities and the loss of employment," he said.

A POSSIBLE LIFE BOAT

In a catastrophic scenario, official support comes into play. Precisely, one of the workhorses of President Andrés Manuel López Obrador, who arrived at the Presidency of Mexico with a clear message: "First the poor."

On April 5, the leftist leader vouched for this by announcing a controversial revival plan in which he promised two million new jobs and, above all, a shower of aid.

In sum, the social and development programs promoted by the Government this year will reach 22 million beneficiaries, "he said then. Among other points, he advanced the payment of the universal pension to older adults by several months.

This Saturday, in a new message to the nation, he assured that his aid will reach 60% of the population, "the most needy."

Although criticized by certain sectors, these grants can be a lifeline for many.

"The strengthening of the social programs and of the money transfers that they have been carrying out in recent weeks are, I insist, a good option, especially for households that report greater extreme poverty," explained the head of Coneval.

The expert considered this a "containment" mechanism along with employment, and he wished that these aids, in agreement with the state governments, aim especially towards those cities or regions with great informality.

MEDICAL CARE

One of the factors that Coneval evaluates is access to health services. "20.2 million Mexicans have or report a lack of access to health services," he said.

This vector lists who is affiliated with a public or private health entity, and who is not in this country of about 126 million inhabitants.

This figure could have changed in recent months, said the expert. This is due to the official promise of universal health access and the recent creation of the Institute of Health for Well-Being (Insabi), which has this aim.

Meanwhile, Mexico is preparing for the maximum peak of infections amid criticism for lack of supplies and medical protocols.

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