Latin America seeks to address new social demands beyond poverty reduction
New York – More than 20 social development ministers from Latin America gathered at the United Nations headquarters today to discuss how to move beyond poverty reduction to further reduce inequality and address demands from the region’s rising middle class, such as better public services and more accountability.
Opening the Sixth Ministerial Forum for Development, a two-day meeting organized annually by UN Development Programme (UNDP), Harvard University competitiveness expert Michael Porter, stressed that local businesses and multinational companies play a crucial role in further alleviating poverty and reducing inequality in Latin America if they offer goods and services that create profit while also boosting social and economic growth.
UNDP Administrator Helen Clark praised Latin America’s success in lifting millions out of poverty, also recognizing governments’ efforts to make decision-making more transparent and responsive.
“Protests and events around the world remind us that citizens want a greater say in the decisions which impact on their lives,” she said. “Along with the movement out of poverty, people’s expectations of being heard, engaged, and having accessible and quality public service have grown."
“The challenge is to enhance institutions so they can respond to a new level of high intensity citizenship,” added Heraldo Muñoz, UN Assistant Secretary-General and UNDP Director for Latin America and the Caribbean. “Many of the street protests in Latin America are sparked by a new middle class, increasingly indebted, who aspire for more and demand quality public services and decent treatment.”
To shed light on risks surrounding the new middle class in Latin America and to help map inequality in the region, Chile’s former Minister of Planning Clarisa Hardy presented a new UNDP-commissioned study which shows that 38 percent of Latin Americans are in a vulnerable situation, living on $4-10/day. They risk falling back into poverty particularly because of the quality of education, lack of access to basic health services and poor working conditions.
The new report groups Latin American countries in terms of percentage of people in the middle class (living on US$10-40/day) and living in poverty (less than $4/day)—and extreme poverty (less than $2.5/day). Uruguay, Argentina and Chile rank as the countries with the proportionately lowest levels of poverty and the largest middle class. Costa Rica, Panama, Brazil, Colombia, Bolivia, Mexico, Venezuela and Ecuador are characterized by a proportionately medium-sized poor population and an emerging middle class. Finally, Paraguay, the Dominican Republic, Peru and El Salvador struggle with high levels of poverty and a proportionately weak middle class.
Overall, more than 30 percent of Latin Americans live under $4 a day with 16 percent of the population living under extreme poverty (less than $2.5 a day), according to the UNDP study. Only 2 percent of the population is classified as part of the upper class (living on more than $50 a day), and nearly 30 percent are part of the middle class (living on $10-50 a day).
Even though inequality has declined, 10 of the 15 most unequal countries in the world are in Latin America, according to UNDP figures. Yet, progress is visible: in 16 of 17 countries, income inequality has reduced over the past 10 years.
This is in large part due to the fact that Latin America is a worldwide leader in social programmes that give financial aid to people living in poverty on the condition that their children stay in school and have regular medical checkups, including routine immunization. In addition to economic growth in the past decade, these schemes are among the principal means of poverty reduction for 18 countries in the region.
About the Forum The Ministerial Forum on Development in Latin America is sponsored by the UNDP-Regional Bureau for Latin America and the Caribbean and the Spanish Agency for International Development Cooperation (AECID, in Spanish), through the Spain-UNDP Fund Towards an integrated and inclusive development in Latin America and the Caribbean.
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