The European Union, through EUROsociAL+, has co-organised a webinar on the effects of the pandemic on the jobs market together with the Secretariat for Central American Social Integration (SISCA) and the ILO office for Central America, Haiti, Panama and the Dominican Republic.
“This challenge is global in nature and requires our enhanced cooperation. Only together can we stop the spread of the coronavirus”, said the Head of Cooperation of the European Union Delegation in Nicaragua, Laurent Sillano, before the Central American Integration System (SICA), in the webinar that addressed the theme “Employment and economy in Central America and the Dominican Republic in times of COVID-19”, the third in the series organised by the Secretariat for Central American Social Integration (SISCA) and the European Union Programme – EUROsociAL+, which on this occasion had the collaboration of the International Labour Organisation (ILO).
“This webinar is carried out with the aim of analysing the regional situation, exchanging ideas and seeking solutions appropriate to the realities of each country regarding the protection of the workforce, income and productive capacity in the context of the measures of social distancing adopted to prevent the spread of the SARS-CoV-2 coronavirus”, emphasised Alfredo Suárez Mieses, Secretary General of SISCA.
The ILO, using the changes in working hours, which reflect both lay-offs and other temporary reductions in working time, has calculated that in the second quarter of 2020 there will be a reduction in employment of around 6.7 percent, the equivalent to 195 million full-time workers. The final number will depend on how quickly economies recover in the second half of the year, and the effectiveness of policies to boost demand for labour. There is, of course, a strong concern for informal workers (around 2 billion), due to their lack of coverage by social security systems.
“The socio-economic impacts will affect us all. The work dimension and the social dimension are key in the first response and will be even more so in the economic recovery. This battle will be a long one, what we have seen so far are the first movements of the pandemic,” said Vinícius Carvalho Pinheiro, Assistant Director General and ILO Regional Director for Latin America and the Caribbean.
In general terms, a crucial variable with which to more or less successfully face the pandemic is the degree of development (and coverage) of basic services, especially health, sanitation, social protection and education. Another important element is the reach and territorial density of these services. Although there is still no specific information for the Central American region, the weakness of the service systems is notable (with differences between countries).
Carmen Moreno, Director of the ILO Office for Central America, Haiti, Panama and the Dominican Republic, assures us that in order to protect people, employment and companies, it is necessary to put the emphasis on health and safety at work.
“We need productive development policies that allow countries to aim at finding other production niches in which they can absorb the greatest amount of unemployed labour. In our region, we have a bigger challenge which is the extremely high level of labour informality”, said Moreno.
In addition to the structural problem of informal work, many companies (and workers) could suffer devastating harm. Hence the need to think about strategies both for the time the emergency lasts, and for the phase of recovery and return to normal conditions.
The Central American countries are correctly linking the three dimensions of the emergency – health, economic and social – through tax measures that also involve debt; they have also approved measures for the temporary suspension of employment contracts and for workers to receive cash transfers. The immediate challenges, however, are immense. Companies will not be able to bear prolonged periods of economic inactivity.
“It is important for the region to identify shared challenges and deal with essential aspects such as labour migration, for example, because the mechanisms we will make available to overcome the difficulties and transformations we have to generate for employment will depend on this, which we envisioned as the future, but which now require more urgent implementation”, said Giannina Dinarte, Ministry of Labour and Social Security of Costa Rica.
In the world, to alleviate the effects of the freezing of economies, basically direct and indirect financial aid is being moved towards employment, income and companies (debt deferment and rent payment, renegotiation of loans and service payment deferment, etc.).
“Not all productive players will get going again at the same time. Plans for retraining the workforce must be designed. It is time to train, educate and expand professional skills, not only for workers in general, but for workers who are hardest hit in this crisis. We need more Central American integration to enhance the scale of interventions in each country”, stressed Francesco Chiodi, Coordinator of the Social Policies area of the European Union EUROsociAL+ Programme.
In the European Union, in addition to national measures, regional initiatives are also being launched, such as the pan-European guarantee fund to facilitate access to credit, and the Employment Maintenance Instrument (SURE), which offers financial help of up to €100 billion in financial terms, in the form of interest-free loans by the EU to the Member States. With these resources, wages can be paid (and lay-offs avoided) in affected companies that reduce working time. To create the SURE fund, States will first contribute €25 billion in guarantees, which the Commission will use to issue debt and obtain financing on the market.
We are facing unprecedented times. The pandemic is changing rapidly and is causing extreme disruption for citizens and labour markets. The final effects of which, both economic terms and in labour markets, we will not be able to measure until several years from now”, said Gerson E. Martínez, Specialist in Economic Policies and Labour Market Institutions of the ILO Office for Central America, Haiti, Panama and the Dominican Republic.
“Companies must be operational, jobs must be maintained. We believe it is important that governments set clear rules regarding biosafety standards. We have to look to the future at what will happen to companies or jobs, if they are operational. To open responsibly. Not all companies can be opened; but essential services must be left. For this reason, social dialogue between workers, the private sector and the Government is important and urgent to get out of the economic crisis that will follow the health crisis”, said Armando Urtecho, Director of the Honduras Council of Private Enterprise and representative of the Federation of private entities of Central America and the Dominican Republic FEDEPRICAP.
In this sense, sanitary measures that promote employment and income, subsidies to companies, tax policies and public spending, plans to care for migrant populations, etc., must include proposals that help reduce, transform, and above all, not to increase inequalities.
“No one can be fired at this time of quarantine. Each of the reasons given must be analysed individually. We are advising people who are not affiliated by phone; and informing them of where they should take their enquiries”, highlighted Francisco Quijano, President of the Central Autónoma de Trabajadores Salvadoreños – CATS, a trade union centre, and the Consejo Unitario Sindical, the council for non-unionised and unionised workers of El Salvador.
In the SICA region, anticipating that the consequences of the pandemic will build up into quite an obstacle to achieving the 2030 Agenda, the urgency of identifying measures that can be addressed to sustain everyone’s income is clear, including those in informal employment and other vulnerable sectors of the population through, and beyond, cash transfers in the lockdown and social distancing phase. For this, the regional dimension, dialogue and cooperation represent a fundamental framework in the implementation of strategies capable of responding to the health emergency and facing its impact on the economy and employment.
