The ongoing COVID-19 pandemic has increased poverty, expanded the size of the informal economy, and threatened the weak health systems of some countries in Central America, experts have said.

According to the Inter-American Development Bank, 274,000 formal jobs could be lost in Guatemala, 130,000 in Honduras, and 70,000 in El Salvador due to the health crisis, reports Xinhua news agency.

On Saturday, Salvadoran economist Julia Evelyn Martinez said that the loss of jobs in the region has led to an increase in informal employment in Guatemala, Honduras, and El Salvador, where the informal economy already measured around 70 percent before the pandemic.

Central America
Central America Wikimedia Commons

Relying on Informal Economy to Survive

She said the region had already been facing a multidimensional crisis due to economic stagnation, deterioration of public finances and unemployment, while restrictions imposed by the government during the pandemic have only exacerbated the problem. "The approval of containment measures to prevent the spread of COVID-19 has added further deterioration to the welfare conditions of Central American families."

Across the region, Central Americans have begun turning to the informal economy to survive, running businesses out of their homes or even begging in the streets in order to make ends meet. According to the Economic Commission for Latin America and the Caribbean, poverty will increase exponentially in the region this year due to the pandemic.

Lack of Healthcare Networks

Nancy Sandoval, president of the Guatemalan Association of Infectious Diseases, said that the region lacks healthcare networks with the capacity to respond to projected future cases. The gradual relaxation of restrictions aiming to jumpstart their economies means an increase in cases, which is why more medical personnel, beds, and tests are required, said Sandoval, giving Guatemala and Honduras as examples, where less than one doctor is available for every 1,000 inhabitants.

Central America, the region comprising El Salvador, Costa Rica, Belize, Guatemala, Honduras, Nicaragua and Panama, has so far reported over 237,000 COVID-19 cases, according to the Pan American Health Organization.