The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) warns that due to low world economic growth, the end of the basic commodities super cycle, greater inflationary pressure and a reduction in the capacity to create employment, ¨poverty reduction in the region has stalled since 2012 and destitution shows signs of a slight increase.¨

In a study that was made available to La Jornada and that will be presented this Monday at the Regional Conference on Social Development in Lima, ECLAC points out that more than half of the region´s inhabitants live in poverty (12 per cent in destitution, 22 per cent in poverty and 17 per cent in situations of vulnerability).  However, the percentages increase amongst the indigenous population, descendents of Africans, the disabled, the elderly and women and children.

Last year, in the 19 countries studied in the region considered to be the most unequal in terms of income distribution, the number of people in situations of poverty (half in extreme poverty) reached 167 million.

The study highlights that many Latin Americans in situations of vulnerability who have only ¨recently left¨ poverty, earn incomes that only scarcely places them above the poverty line.  They are exposed to a range of shortages and risks such as unemployment, lack of social security, serious health problems, indebtedness at very high interest rates and loss of housing.

In Mexico´s case, the study indicates that the poorest fifth of the population accounts for just 6.5 per cent of the nation´s income whereas 38 per cent of the nation´s wealth is in the hands of the richest fifth.  The organisation points out that at a regional level, the distribution of wealth amogst the poorest rose by one percentage point between 2002 and 2013 but in Mexico it rose by only half a percentage point.  The richest of the region lost 5 percentage points in wealth distribution but in Mexico the wealth of the richest dropped only 3 points from 41 per cent to 38 per cent.

There were more significant changes in other countries:  the poor of Argentina and Uruguay raised their share of income from 4 to 7 per cent and from 8.5 to 10 per cent respectively.  In Brazil, the richest fifth of the population lost 12 points of income, from 60 to 48 and in Bolivia the drop was 20 points, from 53 to 33.

Work and Ineqality

ECLAC emphasises that employment is ¨the most decisive factor in exacerbating or mitigating inequalities amongst the population¨.  Although work accounts for 80 per cent of household incomes, 18.9 per cent of Latin Americans that work ¨earn salaries below the poverty line.¨

The study mentions that in Mexico, ¨the minimum wage has stagnated for almost 20 years and has become one of the lowest in Latin America.¨

The organisation highlights the role that social policies and programs have had in reducing poverty, despite the criticism that they have been subjected to.  Their coverage has practically quadrupled since the nineties when Brazil and Mexico began to implement them, until reaching 132.6 million people in 2013, representing 21.5 per cent of the regional population.

According to ECLAC, social public spending per capita in Mexico has reached $953 US and represents 14.9 per cent of gross domestic product, less than the $1265 US and 18.8 per cent of gross domestic product that is registered in the countries of Argentina, Uruguay, Brazil, Chile, Costa Rica and Panama.

The commision recognises that during the past decade, as a result of social policies and favourable economic conditions which also allowed the region to achieve its millenium goal of reducing extreme poverty by half,  Latin America and the Caribbean achieved a 15.7 per cent reduction in poverty as well as a modest reduction in inequality.  However, the study predicts that in the current context of an economic slowdown, there will be ¨difficulties in recuperating the rates of growth registered in previous years and in maintaining the level of public spending in some countries.¨

My translation of article by Susana González from today´s edition of La Jornadá.  Original in Spanish here.

Peter W Davies


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