September 09, 20 - 6:04 pm - LABS

About 2.7 million SMEs are going to close due to COVID-19 in Latin America, says ECLAC

At the 24h Conference of the Development Bank of Latin America (CAF), the Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena suggested subsidies, tax exemptions and grace periods for small and medium-sized companies in the region, because according to her, about 2.7 million small and medium-sized businesses are going to close due to the pandemic.

She also called for the construction of a political, social, and economic pact, and of a fair, inclusive, and progressive social contract across Latin America. During her speech, Bárcena stressed that the pandemic caused by the coronavirus has revealed the fragility of globalization and multilateralism. “We need a progressive structural change. More than talking about reconstruction, we have to talk about transformation, to increase productivity, with innovation, but with equality and sustainability at the center,” she said.

Alicia Bárcena recalled that the crisis caused by the COVID-19 pandemic has magnified the structural gaps in Latin America and the Caribbean. She specified that the region will experience a 9.1% contraction in 2020, the worst in 100 years.

According to her, nearly 33 million people will fall from the middle strata to poverty, in such a way that 8 out of 10 people in the region will require a basic income and universal policies. Inequality will reach 5% on average and unemployment will affect 44 million people.