America

In Latin America poverty decreases but inequality does not

In Latin America poverty decreases but inequality does not

Poverty in Latin America and the Caribbean was reduced to the level it was in 2014 after having increased considerably in 2020 due to the COVID-19 pandemic. In 2023, the 27.3% of the regional population lived in povertya drop of 1.5 percentage points compared to the previous year, and 5 points compared to 2020, according to the most recent report of the Commission Economic for Latin America and the Caribbean (ECLAC) released this Tuesday.

The publication states that The extreme poverty rate reached 10.6% of the region’s population, A figure lower than that of 2022 by 0.5 percentage points, but above the levels of 2014. In total, 172 million people live in poverty and of them, 66 million suffer from extreme poverty, he points out.

The 172 million in poverty cannot cover their basic needs and the 66 million in extreme poverty cannot acquire a basic basket.

The study attributes more than 80% of the decrease in regional poverty to Brazil, where more than a third of the regional population lives and there are non-contributory transfers. ECLAC estimates that without Brazil, the poverty figure would have been 28.4%.

Poverty would continue to decline this year

For this year, the UN entity projects it will decrease slightly, to 26.8%, which would represent 170 million people. Extreme poverty is estimated at 10.4%.

The disaggregated data indicate that Colombia, El Salvador, Paraguay and the Dominican Republic reduced poverty by at least one point. In Honduras and Peru, poverty increased.

A total of twelve countries reduced poverty, mainly thanks to the income of formal workers and public transfers, emergency aid and non-contributory pensions.

More women than poor men

ECLAC highlighted that poverty continues affecting women more than men of working age and that the percentage of children and adolescents in poverty is considerably higher than that of other age groups.

“The sexual division of labor and the current social organization of care create gender gaps that are expressed throughout the life cycle and in the obstacles that women face for labor inclusion and social protection”says the study.

In 2022, only a little more than half of the women in the region were linked to the labor market (53.5%) and, among women who were outside the labor force, 56.3% were dedicated exclusively to unpaid domestic and care work, compared to 7.3% of men.

Besides, From the age of 65, women have higher levels of poverty than men although they receive pensions and 70.3% of those who do not receive any type of pension receive their own income below the poverty line.

Poverty is also higher in rural areas than in urban areaswith rates of 39.1% and 24.6%, respectively.

High inequality and low social mobility

Meanwhile, the distribution of wealth is even more concentrated and unequal than that of income, highlights the text, which specifies that in 2021, the 10% of the highest-income people concentrated 66% of the total wealth and the richest 1% concentrated 33%.

Latin America is a region of high inequality, low social mobility and weak social cohesion with weak social policies and protection systemssays the report, and emphasizes the need to strengthen social protection to combat inequality.

When presenting the report, the executive secretary of ECLAC argued that the strengthening social protection systems in Latin America and the Caribbean, particularly non-contributory social protection, represents a strategic space for the adoption of an integrated approach” that could help reduce poverty, the various causes of inequality and the low levels of social cohesion of the region and inclusive social development”.

José Manuel Salazar-Xirinachs added that in order to face the development crisis in the region, we must move towards “universal, comprehensive, sustainable and resilient” social protection.

The report indicates that in 2023 social spending represented 11.5% of GDP in Latin America and which continued to be the main component of total public spending, reaching 53.3% in 2023.

In the Caribbean countries, this allocation was 41.3%, further widening the existing gap with Latin American nations.

For make progress in eradicating poverty It is necessary to establish an investment standard for non-contributory social protection of between 1.5% and 2.5% of GDP or between 5% and 10% of total public spending, ECLAC said.

Source link