In Latin America, the Island is the State that spends the least on non-contributory pensions for those over 65 years of age.
14ymedio, Madrid, 14 November 2024 — Cuba lost 0.8% of its gross domestic product (GDP) per capita in 2023, according to data from the report “Social Panorama of Latin America and the Caribbean 2024: challenges of non-contributory social protection to advance towards inclusive social development”. Presented this Tuesday by the ECLAC’s [Economic Commission for Latin America and the Caribbean] Executive Secretary, José Manuel Salazar-Xirinachs, the report shows that the Island is still bringing up the rear in the region, in a group of four countries in which the figure was negative, although in a better situation than Peru (1.4%), Argentina (2.1%) and Haiti (3.1%).
The region’s per capita GDP did not show a large variation, barely a 1.4% increase, especially encouraged by the better data from Panama (5.9%), Costa Rica (4.5%) and Paraguay (3.5%). This figure, according to ECLAC, “reflects the economy’s capacity to generate income to meet the needs of the population. The availability of employment and labor force participation are direct determinants of household income. Inflation, especially food inflation, has an impact on the purchasing power of families, particularly those in a situation of economic vulnerability”.
Their amounts did not cover the per capita household income deficit.
The report, however, focuses on how the countries evaluated protect their most vulnerable populations, although it does address poverty and inequalities – with an absence of data for Cuba, which does not provide them – as well as care for ageing populations and how states are addressing this challenge. On this occasion, ECLAC has focused on non-contributory benefit systems, which should ensure that the most vulnerable population is cared for.
The agency has studied the non-contributory pensions of 14 countries, among which Cuba is not included, and concluded that “despite their positive impacts, their amounts did not cover the deficit of household per capita income in relation to the poverty line”. The island, however, as documented in the report, has a system created in the 1970s (1979, in fact), like those of the Bahamas, Chile, Costa Rica, and is thus among the first, the pioneers being Uruguay, in 1919, and Argentina, in 1948. ECLAC admits that the legal existence of the system “does not guarantee the effectiveness or efficiency of these non-contributory social protection programs, but it does seem to provide them with greater legal stability compared to those based on administrative or ministerial decrees”.
Despite the lack of data from Cuba, which prevents us from knowing more about the endowment, coverage and other details, as well as comparing them with other countries, ECLAC does have a record of the contribution made by the State to non-contributory pensions for the over-65s as a percentage of total public spending. The result is that the regime is the one that allocates the least – together with Antigua and Barbuda – of the 24 countries with data, an amount below 0.005, compared to the regional average of 0.42, in which Trinidad (2.8%), Guyana (1.6%) and Bolivia (1.5%), stand out above the rest.
According to ECLAC, in order to make progress in eradicating poverty “it is necessary to establish an investment standard for non-contributory social protection of between 1.5% and 2.5% of GDP or between 5% and 10% of total public spending”. However, after studying the contributions of 20 countries, including Cuba, it is clear that they do not reach 0.8% of GDP or 3% of public spending in 2022.
Another noteworthy data that appears in the report for Cuba is that of inflation, precisely because of its absence. ECLAC considers that this figure is relevant “especially that of food” because “it impacts on the purchasing power of families, particularly those in a situation of economic vulnerability”.
Although official data indicates that in Cuba it stood at 31%, it is believed to be much higher in the informal sector. ECLAC does not include the figure in this report precisely because it considers that the island belongs to the block of “countries with chronic inflation”, together with Argentina, Haiti, Suriname and Venezuela, which could distort the statistical averages.
In general terms, the report contains good news for the region, which is the fall in poverty to 27.3% of the population in 2023, the lowest rate recorded since 1990 (172 million people), as well as in extreme poverty, which decreased by 0.5% (66 million people). The improvement is due especially to Brazil, and to a lesser extent Paraguay, the Dominican Republic, El Salvador and Colombia.
However, inequalities are growing in a continent greatly affected by unequal wealth distribution and where poverty “disproportionately” affects women of working age (22.2%), minors (40.6%), indigenous people (42.3%) and Afro-descendants (20.4%), and those living in rural areas (39.1%).
Translated by GH
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