ore than a year has passed since the pandemic fully reached Latin America and the Caribbean (LAC). Yet, as wealthier countries ramp up vaccination campaigns and gradually reopen, the region has become a COVID-19 hotspot. LAC now registers over 20% of global cases and over 30% of deaths, even though it is home to only 8% of the global population. While the world’s economic output shrunk by 3% in 2020, the region’s fell by 7%. Whatever social and economic progress LAC made during the commodities boom of the early aughts has been wiped out by the economic and social effects of the pandemic.
The underlying drivers behind this trend are multiple and interrelated, with some predating the pandemic: chronic underinvestment in public health systems, limited or unambitious fiscal stimuli, and reduced access to vaccines top the list. However, beyond these factors, which to various degrees also affect other developing regions, LAC cities entered the pandemic with two pre-existing conditions: informality coupled with inequality. Over a quarter of the region’s citizens live in informal neighborhoods and almost half of all households lack adequate housing (i.e., lack access to water, sanitation, legal title, in overcrowded homes and with little to no access to public spaces and quality mobility services). LAC also has some of the most unequal cities in the world (i.e., with high GINI coefficients). While regions such as sub-Saharan Africa also stand out for high levels of inequality, LAC has a uniquely harmful and pervasive combination of extreme inequality and informality in urban areas.
The patterns and drivers of urban informality and inequality in LAC have evidently changed over time, yet the pandemic is showing us an essential point policy makers all too often fail to recognize. The need to work informally, the undue impacts and burdens on women and the young, poor access to healthcare, the inability to learn or work through digital means--all of these impacts have a clear geographic and spatial expression. This is a new kind of informality, manifold and intangible in its social and economic expressions yet always anchored in a specific place.
To illustrate this, consider how the rapid spread of COVID-19 has ‘capitalized’ on pre-existing informality and inequality, while simultaneously exacerbating them. Historically, LAC has had notably high levels of labor informality. Quarantine measures caused tremendous job losses in so-called ‘contact-intensive’ sectors, from domestic services (which involve direct contact between poor and wealthy residents, thus helping the spread across socioeconomic groups) to restaurants and hotels, hitting poor families - many without access to quality infrastructure, could not observe simple health recommendations such as handwashing - in low-income areas the hardest. Women, in particular, have experienced higher than average employment losses, having not only left service jobs but also taken on additional care work at home. Migrants, particularly those without legal status, have had no choice but to continue to work, all without proper access to health services. Few among these groups have the skills or digital tools to find ‘work from home’ alternatives; most still have to use mass transit as low-income families have continued to move around cities at a greater rate compared to wealthier households). Inequality throughout LAC’s cities has been unmasked and deepened.
They overlap in very specific neighborhoods and determine how their residents experience and navigate unequal cities. Recommendations for post-pandemic recovery correctly point to the need for more consistent investment in healthcare, for fiscal relief for people and firms, for improved taxation and welfare systems, and for improved broadband access and digital literacy. Yet they often ignore the interdependency these topics have with the precarious nature of contemporary city life.
To be sure, informality in LAC cities is not a new phenomenon. In fact, it has characterized city growth since the mid-twentieth century, during which the region experienced unprecedented levels of economic growth and a dual phenomenon of rapid industrialization and urbanization. Rural-to-urban migrants often settled in peripheral, self-built neighborhoods, which have since been surrounded by rapidly-growing cities and are now part of consolidated urban centers or ‘innerburbs’. Ironically, today’s urban expansion is explained by both premium-gated communities as well as state-sponsored social housing.. The former depends entirely on private cars to access the city. The latter, distant from mass transit and all manners of services, often lays vacant. Informal development in at-risk areas, at times encouraged through clientelistic networks, can still be a better alternative.
The pandemic has catalyzed overdue conversations about our cities and has turned previously disinterested citizens around the world into urban planners. Weeks and months of confinement have created a clear demand for ‘liveability’ and its environmental and climate benefits: bigger and greener parks, uncongested and walkable streetscapes, access to food and services, fast internet. Some among us have even left cities, perhaps never to return (though most often to smaller and, yes, more liveable urban areas). Forward-looking municipalities have embraced concepts such as the fifteen-minute city. As companies embrace permanent arrangements for teleworking, astute property managers are turning vacant offices into multi-purpose spaces.
All of these ideas, and the underlying demand for more liveable cities, provide a way forward for post-pandemic cities in LAC. However, these alone cannot redress the historic legacy of urban informality, which would require considerable and parallel efforts to ensure quality access to basic infrastructure and services. And even then, accompanying strategies to close the digital gap and prepare vulnerable populations for the new (and already unequal) data economy. This complementarity of interventions is crucial and is a key element in the Inter-American Development Bank’s Vision 2025, a blueprint for the region's recovery and growth, which has sustainability as a cross-cutting principle to guide our work.
Throughout history, cities have held the promise of a better life: people want to live in places that offer opportunities for a better life, while firms locate where demand and talent lie. For this promise to hold in LAC after the pandemic--and for democratic governments to reemerge without losing their legitimacy--cities must ensure that broader fiscal and health agendas recognize the spatial and urban nature of informality and inequality. Specifically, the new informality demands that LAC cities address historic ‘bricks and mortar’ issues such as inadequate housing all while embracing planning innovations and a civic-minded embrace of digitalization and exponential growth.
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Latin America's New Informality Stunts Pandemic Recovery
Image by Leon Overweel via Unsplash.
August 6, 2021
Whatever social and economic progress Latin American and Caribbean countries made during the commodities boom of the early aughts has been wiped out by the economic and social effects of the pandemic, writes Patricio Zambrano-Barragán of the Inter-American Development Bank.
M
ore than a year has passed since the pandemic fully reached Latin America and the Caribbean (LAC). Yet, as wealthier countries ramp up vaccination campaigns and gradually reopen, the region has become a COVID-19 hotspot. LAC now registers over 20% of global cases and over 30% of deaths, even though it is home to only 8% of the global population. While the world’s economic output shrunk by 3% in 2020, the region’s fell by 7%. Whatever social and economic progress LAC made during the commodities boom of the early aughts has been wiped out by the economic and social effects of the pandemic.
The underlying drivers behind this trend are multiple and interrelated, with some predating the pandemic: chronic underinvestment in public health systems, limited or unambitious fiscal stimuli, and reduced access to vaccines top the list. However, beyond these factors, which to various degrees also affect other developing regions, LAC cities entered the pandemic with two pre-existing conditions: informality coupled with inequality. Over a quarter of the region’s citizens live in informal neighborhoods and almost half of all households lack adequate housing (i.e., lack access to water, sanitation, legal title, in overcrowded homes and with little to no access to public spaces and quality mobility services). LAC also has some of the most unequal cities in the world (i.e., with high GINI coefficients). While regions such as sub-Saharan Africa also stand out for high levels of inequality, LAC has a uniquely harmful and pervasive combination of extreme inequality and informality in urban areas.
The patterns and drivers of urban informality and inequality in LAC have evidently changed over time, yet the pandemic is showing us an essential point policy makers all too often fail to recognize. The need to work informally, the undue impacts and burdens on women and the young, poor access to healthcare, the inability to learn or work through digital means--all of these impacts have a clear geographic and spatial expression. This is a new kind of informality, manifold and intangible in its social and economic expressions yet always anchored in a specific place.
To illustrate this, consider how the rapid spread of COVID-19 has ‘capitalized’ on pre-existing informality and inequality, while simultaneously exacerbating them. Historically, LAC has had notably high levels of labor informality. Quarantine measures caused tremendous job losses in so-called ‘contact-intensive’ sectors, from domestic services (which involve direct contact between poor and wealthy residents, thus helping the spread across socioeconomic groups) to restaurants and hotels, hitting poor families - many without access to quality infrastructure, could not observe simple health recommendations such as handwashing - in low-income areas the hardest. Women, in particular, have experienced higher than average employment losses, having not only left service jobs but also taken on additional care work at home. Migrants, particularly those without legal status, have had no choice but to continue to work, all without proper access to health services. Few among these groups have the skills or digital tools to find ‘work from home’ alternatives; most still have to use mass transit as low-income families have continued to move around cities at a greater rate compared to wealthier households). Inequality throughout LAC’s cities has been unmasked and deepened.
They overlap in very specific neighborhoods and determine how their residents experience and navigate unequal cities. Recommendations for post-pandemic recovery correctly point to the need for more consistent investment in healthcare, for fiscal relief for people and firms, for improved taxation and welfare systems, and for improved broadband access and digital literacy. Yet they often ignore the interdependency these topics have with the precarious nature of contemporary city life.
To be sure, informality in LAC cities is not a new phenomenon. In fact, it has characterized city growth since the mid-twentieth century, during which the region experienced unprecedented levels of economic growth and a dual phenomenon of rapid industrialization and urbanization. Rural-to-urban migrants often settled in peripheral, self-built neighborhoods, which have since been surrounded by rapidly-growing cities and are now part of consolidated urban centers or ‘innerburbs’. Ironically, today’s urban expansion is explained by both premium-gated communities as well as state-sponsored social housing.. The former depends entirely on private cars to access the city. The latter, distant from mass transit and all manners of services, often lays vacant. Informal development in at-risk areas, at times encouraged through clientelistic networks, can still be a better alternative.
The pandemic has catalyzed overdue conversations about our cities and has turned previously disinterested citizens around the world into urban planners. Weeks and months of confinement have created a clear demand for ‘liveability’ and its environmental and climate benefits: bigger and greener parks, uncongested and walkable streetscapes, access to food and services, fast internet. Some among us have even left cities, perhaps never to return (though most often to smaller and, yes, more liveable urban areas). Forward-looking municipalities have embraced concepts such as the fifteen-minute city. As companies embrace permanent arrangements for teleworking, astute property managers are turning vacant offices into multi-purpose spaces.
All of these ideas, and the underlying demand for more liveable cities, provide a way forward for post-pandemic cities in LAC. However, these alone cannot redress the historic legacy of urban informality, which would require considerable and parallel efforts to ensure quality access to basic infrastructure and services. And even then, accompanying strategies to close the digital gap and prepare vulnerable populations for the new (and already unequal) data economy. This complementarity of interventions is crucial and is a key element in the Inter-American Development Bank’s Vision 2025, a blueprint for the region's recovery and growth, which has sustainability as a cross-cutting principle to guide our work.
Throughout history, cities have held the promise of a better life: people want to live in places that offer opportunities for a better life, while firms locate where demand and talent lie. For this promise to hold in LAC after the pandemic--and for democratic governments to reemerge without losing their legitimacy--cities must ensure that broader fiscal and health agendas recognize the spatial and urban nature of informality and inequality. Specifically, the new informality demands that LAC cities address historic ‘bricks and mortar’ issues such as inadequate housing all while embracing planning innovations and a civic-minded embrace of digitalization and exponential growth.
