Last decade sees 56 million leave poverty behind in Latin America

The market in Chichicastenango, Guatemala. (Credit: Pedro Szekely)

The poverty rate in Latin America and the Caribbean fell from 41.7% to 25.3% from 2000 to 2012, says the United Nations Development Programme (UNDP). That means more than 56 million people moved out of the grips of poverty during that period.

The good news comes with a stern warning. Despite seeing millions leave poverty behind, many still struggle to join the middle class. Passing the $4 per day poverty line is important, but still means people must struggle to meet their basic needs. Most concerning is the fact that roughly 200 million people in the region are at risk of slipping back into poverty.

Action must be undertaken immediately in order to prevent a dramatic reversal after roughly halving poverty in only a decade, warns UNDP.

Clearly, if countries in the region don’t reduce their vulnerability and boost their capacity to recover from financial crises and natural disasters, we will not be able to guarantee—and much less improve—regional progress in social, economic and environmental areas,” said UN Assistant-Secretary General and UNDP Director for Latin America and the Caribbean Jessica Faieta at an event in San Salvador.

Faieta participated in a regional presentation of UNDP’s annual Human Development Report. The UN agency said that universal social protections must be achieved in the region to act as a safety net for vulnerable populations (people living on $4 to $10 per day). Investments should also be made in the areas of health and education, two areas that can propel gains made against poverty.

The concerns are grounded in the slowed progress made by Latin America and the Caribbean over the past five years. While the poverty reduction numbers are encouraging, overall human development is falling off pace, as measured by the UNDP’s Human Development Index (HDI). Annual improvements in HDI over the past five years were half of those recorded between 1990 and 2000.

The lesson is that the policies that did a lot of good for the region are no longer as effective at improving the lives of people in the region. Latin America has stood out as a shining example of reducing income inequality. Innovative cash transfer programs for the poor in countries like Brazil and Mexico are counted as helping to close the income gap between the rich and poor. Despite such successes, change is needed.

“More of the same policies will not yield the same results as before. The report emphasizes the need to expand a truly universal social protection scheme, particularly in the most critical phases of life, as is the case and children, young people entering the labor market and the elderly, and to expand our resilience, that is, our ability to deal with adversities without a major setback in well-being,” wrote Faieta about the issue in a recent article.

Getting people to work is vital. The report is based on an assessment of eighteen countries. It found that nine countries had 20% of its young people (aged 15 to 24 years) neither in school nor working. In Guatemala, one out of four young people are out of school and a job. These people are vulnerable as they will struggle to get by without an income, in the future. Hence the encouragement to think more about improving education.

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Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.