Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.
CLARÍN – In mid-March, for Ignacio Lanús the outlook was already looking very bleak. The quarantine was decreed on the 20th but he already saw it coming. “They said they were going to suspend everything and we had more or less 1,200 covers ordered by the following weekend,” he says nine months later. The owner of the catering firm Teist reflects aloud: “As a businessman, if I think coldly, it would have been better for me to lower the blind, fire everyone,” he said. He didn’t do it.
The new poor are, according to the World Bank, the people who in 2019 were just above the poverty line and who fell due to the effect of the coronavirus pandemic. Seven Argentines tell how they managed to save themselves and avoid falling into that shipwreck.
Before the coronavirus, the World Bank projected a gradual reduction in extreme poverty in all regions. However, the effects of the health emergency created the phenomenon of the ‘new poor’. “If the pandemic had not existed, that population group would have tended to leave the poverty line,” explains sociologist Javier Elvira Mathez.
Some argue that the effect was not caused by the pandemic itself. “What causes the crisis is the long quarantine: it caused a number of people to fall from the level of the middle class to a very poor level,” says economist Agustín Etchebarne of Fundación Libertad y Progreso.
Javier Bargaño’s working life makes sense outside the confinement walls. Astronomical photography and the responsibilities of being a community manager (CM) of a tourism-gastronomic project are tasks that are difficult to solve with teleworking. He, like so many others, had to adjust his lifestyle. He was forced to move and live with three people to share expenses and avoid his shipwreck.
According to INDEC, in the second semester of 2019, 25.9% of households in urban areas were registered below the poverty line (PL) and, in the first half of 2020, this figure rose to 30.4 %. If this year is compared with the data of 2017, the proportion of that increase is 70%.
Argentina is going through its “third year of economic decline,” says Etchebarne. And this context is deepened by the closure of activities in the last eight months. This produced a “number of people who were prohibited from working and / or had their businesses melted”.
Claudio Augusto Pérez lives in Ramos Mejía, La Matanza district. He has been working at Ascensores Ingeser for 30 years, a renowned company dedicated to the sale and installation of elevators. Businesses related to works and constructions were affected since March by the abrupt closure of the activity. Claudio maintains that until this time of the year “there were around 20% fewer budgets made” and estimates that the balance for the year will be “between 30% and 40% lower than last year in terms of sales.”
Last August, the World Bank published a report that presents some caveats when calculating projections on the change in poverty in relation to GDP growth for the period 2019-2020. This document offers a definition to better understand the situation of those people affected by COVID-19 and who are located between the ‘chronic poor’ (structural poverty) and the ‘non-poor’: the ‘new poor’.
For the public policy consultant, the arrival of COVID 19 made three aspects of Argentine history visible: “A labor market with high informality where socioeconomic fluctuations have a very strong effect; the cycles of poverty regardless of the social policies of each stage that are a difficult cord to break; and a set of public policies in the last 10 to 20 years that prevented the effect of the pandemic from being even worse”.
The protagonists of this phenomenon are linked to urban centers. Stories of those who went from a certain stability to the partial or total loss of income in their homes and of those who managed to reinvent themselves to get out of the crisis. Access to education and basic assets are the engine that enables the chances for recovery in the post-pandemic.
According to historian Camila Perochena, this situation is unique in relation to other crises that Argentina went through. Although the context bears some resemblance to the 2001 collapse, it differs in that, in economic and social terms, it happened “abruptly.”
The unexpected turn “has a particular effect on affected citizens.” Not only in the way in which they were directly harmed as in the loss of employment, but “also psychologically.” “The “new poor” have their identity traits in check,” says Perochena. An essential aspect for individuals in a society.