Achievements & Challenges In The Fight Against Poverty In LatAM.

The percentage of households and individuals living in poverty, along with the severity of this phenomenon, fell during the past decade in Latin America and the Caribbean, according to the Social Panorama of Latin America 2000-2001, by ECLAC. The report reveals that “economic recovery during the 1990s, along with efforts made in the field of public policy, were successful in most countries, at least as far as reverting the setbacks experienced in the previous decade.”

In Latin America, there are 211 million poor people. Of these, somewhat more than 89 million are indigents. Toward 1999, 43.8% of individuals (35.3% of households) lacked the resources necessary to meet their basic needs and 18.5% (13.9% of households) were indigents living in extreme poverty, that is, they didn’t have enough income to purchase even a basic food basket.

Achievements in poverty reduction during the 1990s, however, “were not sufficient to completely compensate for demographic growth during this period, given that from 1990 to 1999 poverty in Latin America rose by 11 million people. In contrast, during this period the number of people living in indigence or extreme poverty fell by almost four million people.” Similarly, the percentage of poor people in 1999 was still three percentage points (43.8% versus 40.5%) higher than in 1980.

In the region, rural poverty remained considerably higher than urban poverty (64% versus 37% of the population), despite the fact that in 1999 the number of urban poor had reached 134 million and rural poor had reached 77 million.

Trends in Poverty from 1997 to 1999

During the second half of the 1990s, Mexico, the Dominican Republic and most Central American countries achieved significant progress in their fight against poverty. In South America, meanwhile, the main tendency started with a slowdown, followed by stagnation and later some recovery, which in some cases translated into maintaining or worsening living conditions. Nonetheless, for an important group of countries in this subregion recovery in 2000 was weak.

In this low-growth environment, the percentage of poor and indigent households fell slightly between 1997 and 1999. In poverty’s case, the percentage fell from 35.5% to 35.3% of households, while indigence fell from 14.4% to 13.9%. Nonetheless, the percentage of poor individuals evolved differently, rising from 43.5% to 43.8%. The percentage of indigents fell from 19.0% to 18.5%.

The number of people living in poverty reached slightly over 211 million people in 1999, of which just over 89 million were indigents. This figure represents a 7.6 million-person increase in the number of poor people, while the number of indigents rose slightly over the three-year period, by 600,000 people.

If we project figures for Latin America into the year 2000 (1999 is the most recent year for which we have detailed estimates on the magnitude of poverty) we can assume that poverty may have continued to fall thanks to higher growth in 2000, particularly in Mexico and Brazil, countries that represent more than half the region’s population.

Thus, for 2000, the percentage of poor households may have reached around 34%, while indigent households would remain at around 14% of the total.

The Decade’s Achievements

From 1990 to 1999, most countries saw a significant decline in poverty rates. Toward the decade’s end, at least 11 countries had successfully reduced poverty levels compared to those of 1990, and they contain most of the region’s poor people. In four of the countries studied, the percentage of poor households rose.

Among the countries where poverty fell, it is worth mentioning the important achievements of Brazil, Chile and Panama, all of which successfully reduced it by ten percentage points. For 1991-2000 annual per capita growth in these countries reached 1.2%, 5.0% and 2.6%, respectively.

In Costa Rica, Guatemala and Uruguay the fight against poverty also achieved some significant reductions, with the percentage of poor households falling by from five to ten percentage points.

In contrast, the situation of those countries in which poverty rates stagnated or even worsened during the 1990s is worrying, because this suggests we’re now dealing with two “lost decades” in terms of advancing toward greater social equity. In this regard, Venezuela’s case, where the percentage of poor households rose from 22% in 1981 to 34% in 1990, and now stands at 44% is particularly troubling, while Colombia, Ecuador, and Paraguay also failed to make significant progress.

Most of Latin America’s poor households live in housing that lacks access to drinking water and, to a lesser degree, suffers from overcrowding (more than three persons per room). Moreover, these are households that show a high rate of demographic dependency and low occupational density, while the head of the household generally has less than three years of education and in some cases is unemployed. Children and young people from poor households tend to develop in low-education environments, they enter the workforce early, and many neither study nor work.

Regional Goals for Reducing Poverty

Reducing current extreme poverty rates by half toward 2015 has been defined as the region’s central objective in the United Nation’s Millennium Declaration. Reaching this goal will require a major but realizable effort for many of the countries of Latin America. According to recent estimates prepared by ECLAC, to achieve this will require a sustained increase in per capita output of no less than 3.8% annually. If the goal were more ambitious, for example reducing general poverty and not just indigence by half by 2015, higher growth of 4.4% annually would be required.

For a copy of the study CLICK below (Adobe Acrobat required):

http://www.eclac.cl/publicaciones/DesarrolloSocial/8/LCG2138P/PSE-2001-CapI.pdf.