NGOs warn of divided society if Latin crisis lessons ignored

Spain runs the risk of skipping three generations of welfare, social rights and democracy, should the current austerity policies remain in place. A report by a group of prominent NGOs warns that this country is on the brink of becoming a dual society where the top 20 percent of the population in terms of wealth will earn 15 times more than the 20 percent poorest in a matter of 10 years. This disparity could easily destroy social harmony.

“Spain will have 18 million people at risk of social exclusion in 2022,” says José María Vera, director of Intermon Oxfam, which published “Crisis, inequality and poverty” in partnership with Médicos del Mundo, Unicef, Cáritas and the Jesuits’ social action network.

By then two out of five Spaniards will be living in poverty if the current trend in spending cuts is maintained, and it will take between two and three decades to return to pre-crisis levels of welfare. The study came to this conclusion by comparing the current situation with what happened in Latin America in the 1960s and 1970s, and in Southeast Asia following the “paper tiger” crisis of 1997, and extrapolating that to Spain’s case.

Latin America and Southeast Asia took between 15 and 25 years to recover from the crisis and its prescribed medicine

The report opens with a quote by Brazilian President Dilma Roussef, who recently said in an interview with EL PAÍS that “we’ve already been through this. The International Monetary Fund imposed a process on us which they called adjustment, and which is now being called austerity. We had to cut all spending, both current expenses and investment. They assured us this would bring a high level of efficiency, lower salaries and bring taxes in line. That model led nearly all of Latin America to bankruptcy in the 1980s.”

In fact, Latin America and Southeast Asia took between 15 and 25 years to recover from the crisis and its prescribed medicine, leading experts to think that a similar situation awaits Spain.

“After decades denouncing a lack of protection for the poor populations in those regions of the world as a result of austerity and adjustment policies that had terrible consequences, we are now seeing an identical situation in Spain,” reads the report.

Intermon’s Vera argued that while there are differences between Europe, Latin America and Southeast Asia, there are enough similarities to expect a similar result down the line for Spain. “The prescription being applied in Spain will only increase unemployment, poverty and inequality,” he said.