Helicopter Money Won’t Ease Latin America’s Pandemic Pain
There are better ways to help its poorest than instituting a universal basic income.
Cash transfers might help.
Photographer: Francisco Macías/Agencia Press South/Getty Images
With the worst of the pandemic yet to come, Latin Americans authorities are scrambling, and not just for hospital beds and coffins. Along with Covid-19, a fever of wonkery has broken out over how to reverse the collective economic contraction and to carry on once the health emergency has passed.
After seven straight years of underwhelming growth, the health crisis’s knock-on effects will set back regional gross domestic product by at least 5% this year, a collapse rivaling the Great Depression. Joblessness will jump by around 35% to 37.7 million, with another 16 million Latin Americans likely to fall into extreme poverty. In Central America alone, GDP will fall by 6% and clip some $3.9 billion from the 48% of households that rely on the shadow economy, according to Manuel Orozco, of the Inter-American Dialogue. And in societies where nearly six out of 10 workers in Latin America live from gig to gig, welfare is more often than not a prayer.