Wednesday 10 December 2008, San José, Costa
Rica
LATIN AMERICA: Poverty
Rates Likely to Rise
By Daniela Estrada
SANTIAGO (IPS) - Two
million people in Latin
America and the
Caribbean were lifted
out of poverty in 2008,
but three million poor
people fell into extreme
poverty, according to a
new report by the
regional United Nations
agency ECLAC.
According to the 2008
edition of ECLAC’s
annual Social Panorama
of Latin America report,
released Tuesday in the
Chilean capital, 33.2
percent of the regional
population, or 182
million people, are now
living in poverty, 0.9
percent less than in
2007.
At the same time, the
extreme poverty rate
rose slightly, from 12.6
percent of the
population in 2007 to
12.9 percent this year
(68 to 71 million
people). Factors that
played a role in this
increase were the rise
in inflation, and
especially food prices.
Although the region is
better prepared than in
the past, both poverty
and indigence rates
could go up in 2009 as a
result of the global
financial and economic
crisis that originated
in the United States,
said ECLAC (Economic
Commission for Latin
America and the
Caribbean) executive
secretary Alicia Bárcena
at the presentation of
the report.
Bárcena grouped the
countries of the region
according to their
poverty levels: low
(below 22 percent),
medium-low (below 32
percent), medium-high
(between 38 and 48
percent) and high (over
50 percent).
The first category
includes Argentina,
Chile, Uruguay and Costa
Rica, the second Brazil,
Mexico, Panama and
Venezuela, the third
Colombia, the Dominican
Republic, Ecuador, El
Salvador and Peru, and
the fourth Bolivia,
Guatemala, Honduras,
Nicaragua and Paraguay.
Under the present
circumstances, the
countries of Latin
America and the
Caribbean should
"protect the poor,
maintain social
spending, implement
effective employment
programmes, and step up
the fight against child
malnutrition," Bárcena
told IPS.
With regard to
short-term measures,
ECLAC suggests that
countries in the region
launch special public
works spending
programmes, boost public
investment in housing
and basic services,
expand unemployment
insurance, and increase
coverage of conditional
cash transfer programmes.
In the medium-term, it
recommends the
development of "new
fiscal pacts and social
contracts that make it
possible" to combat tax
avoidance and evasion
and thus raise taxes.
According to Bárcena,
the effects of the
crisis will include a
rise in unemployment,
and some of the
activities in which
women make up a large
proportion of the
workforce, like sales,
financial services,
manufacturing, tourism
and domestic employment,
will be hit especially
hard.
In addition, credit for
small and medium-sized
companies will become
scarce, real wages will
not grow, and youth and
domestic violence will
be exacerbated, says the
U.N. agency.
Countries that are
heavily dependent on
expatriate remittances
and official development
aid will likely feel the
brunt of the crisis,
said Bárcena, who added
that the impact on
countries will vary
depending on their
degree of
diversification of
exports of goods and
services.
The ECLAC official said
public social spending
in countries in the
region does not favour
the poor in times of
crisis.
And the report states
that "There are few
examples of effective
countercyclical social
expenditure policies for
financing compensatory
mechanisms that mitigate
social risks when the
economy starts to
contract."
Bárcena also noted that
the tax burden is low in
Latin America (18.2
percent), compared to
the European Union (39.8
percent) and the
countries of the
Organisation for
Economic Cooperation and
Development (OECD) (36.2
percent).
She noted that Latin
America made strides in
terms of social
development from 2003 to
2007 thanks to the
steady economic growth
enjoyed by most
countries in the region
and improvements in
income distribution.
Between 2002 and 2007,
the number of people
living in poverty or
indigence dropped by 9.9
percent (37 million
people) and 6.8 percent
(29 million),
respectively.
In the meantime, public
social expenditure rose
from12.92 to 16.34
percent of GDP between
1990 and 2007 in 21
countries of the region,
with spending increasing
especially in the areas
of security and social
assistance.
In addition, 14
countries in the region
managed to reduce the
gap between rich and
poor, although it
widened in three
countries (Guatemala,
Honduras and the
Dominican Republic) and
remained the same in one
(Uruguay), said Bárcena.
But the region is still
the most unequal in the
world, "and the
disparity in its income
distribution remains
high, with the average
per capita income of
households in the tenth
decile approximately 17
times greater than that
of the poorest 40
percent of households,"
says the report.
"This ratio varies
considerably from one
country to another, from
9-to-1 in…Venezuela and
Uruguay, to 25-to-1 in
Colombia," it adds.
Up to 2007, the region
made important progress
towards the first
Millennium Development
Goal (MDG), which is
aimed at halving the
proportion of people
living in extreme
poverty between 1990 and
2015, said the ECLAC
executive secretary.
According to the report,
"The percentage of
indigent persons in the
region (12.6 percent)
was just a bit more than
one percentage point
short of the target of
11.3 percent. This means
that, in the 68 percent
of the total time
available for meeting
the target that has
elapsed so far, 88
percent of the ground
has already been
covered."
However, the regional
average "is low partly
because of the ‘subsidy’
represented by the fact
that Brazil, Chile and
Mexico, which account
for approximately 60
percent of the region’s
population, have already
exceeded the target," it
adds.
"The international
financial crisis and the
resulting world economic
slowdown are expected to
have repercussions on
poverty levels that cast
doubt on the feasibility
of achieving the target
set for 2015," says the
document.
The Social Panorama of
Latin America also
discusses the new target
added this year to the
first MDG: "to achieve
full and productive
employment and decent
work for all, including
women and young people".
Another chapter of the
report urges the
countries of Latin
America and the
Caribbean to take
advantage of the
so-called "demographic
bonus" or "demographic
dividend," described as
"a favourable stage"
that the countries of
the region are going
through, in which "the
proportion of people in
the potentially
productive age bracket
grows steadily relative
to the number of people
of potentially inactive
ages (children and older
persons)."
Over the next few
decades, says the
report, "not only will
demand for primary
education continue to
decline, but so will
demand for secondary
education, relatively at
first, but subsequently
in absolute terms.
During this period,
governments will have
the opportunity to
pursue ambitious goals
for increasing coverage
and quality in secondary
education."
The last chapter focuses
on youth violence in
Latin America, which
"feeds on various forms
of social and symbolic
exclusion among youth,
including a lack of
equal opportunities, a
lack of access to
employment, alienation,
discrepancies between
symbolic consumption and
material consumption,
territorial segregation,
the absence of public
facilities for social
and political
participation, and an
increasingly informal
labour market," the
report concludes.
ECLAC recommends
"inclusive approaches"
to tackle the
phenomenon. |
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