LIMA, Peru — In November, government officials and representatives from the United Nation’s regional Economic Commission (ECLAC) convened in Lima, Peru for a three-day conference on poverty reduction in Latin America and the Caribbean. Inclusion was the key theme of the meeting.
The gathering was set against the backdrop of the 2030 Sustainable Development Goals agenda, as policymakers work toward the central principle of eradicating poverty in all its forms.
According to the UN, after a decade of growth, 92 million people in the region rose out of poverty and into the middle class in the period between 2003-2013.
But as economic expansion has slowed, the region is seeing some segments of the population falling back into poverty. Currently 167 million people (mostly rural) are living in poverty even though 74 percent of those households receive wages.
“[Achieving the goals of the 2030 Agenda] demands that we work together to identify and address the deep-rooted determinants of exclusion in the region,” said UN Development Program Administrator, Helen Clark. “Growth needs to be inclusive and sustainable.”
In Lima, the Economic Commission highlighted this inequity in a report entitled, ““Inclusive Social Development: A New Generation of Policies to Overcome Poverty and Inequality in Latin America and the Caribbean.”
The report identified three critical elements to sustainable growth: income transfers for the relief of basic needs, public access to quality services and labor and productive inclusion.
Conditional income transfer programs to impoverished families have shown promising results. In 2000, close to six percent of those living in poverty in the region received assistance. That number has since climbed to 21.5 percent.
Impact studies have shown that where implemented effectively transfers reduce extreme poverty and, because of requirements for receiving funds, increase school enrollment and health care visits. Using conditional income transfers, Brazil has reduced its poverty headcount by eight percent.
However, the commission urged policymakers to address the weaknesses in these programs. Specifically they said more resources should be spent actively searching for eligible participants, since many are not receiving help. They also said the amount of money transferred should be enough to get people to the poverty threshold, which it currently does not. Most importantly, conditional income transfers should be more closely partnered with labor inclusion organizations. Under the current system, the lack of job training and sustainable employment has not changed the intergenerational cycle of poverty.
“Social policies must be as strong as economic policies,” Paola Bustamante, Minister of Development and Social Inclusion of Peru said.
The commission also proposed shifting the focus from short-term poverty reduction in Latin America to the development of sustainable solutions. This means restructuring labor systems steeped in inequality and exclusion. As nearly half of non-agricultural jobs in the region are informal, employer and job site inspections need to be strengthened to ensure proper regulation.
In addition, small business owners need incentives to formalize their firms. The commission suggested simplified tax schemes, exemptions and assistance for employer contributions to benefits packages, citing successes in Argentina and Uruguay. It also advocates for additional resources for vocational training to foster the education to employment pipeline. More skilled workers, they reason, will reduce exclusion from decent jobs.
Exclusion from social services has also plagued many areas of Latin America and the Caribbean. Costa Rica, Argentina, Brazil and Cuba each spend over 20 percent of GDP on social services, but rural communities, indigenous communities and Afro-descendant communities in these and other countries often do not have access to social services. The commission said leaders can be doing more to encourage minority communities’ access to public housing, healthcare, education and employment opportunities. Simple legal protections including worker’s rights and renter’s rights are critical, they urge.
While leaders have made enormous progress in poverty reduction in Latin America and the Caribbean, there is a lot of work to be done on solving the underlying inequality that fuels it. “Economic prosperity also hinges on inclusive social development,” ECLAC’s Executive Secretary, Alicia Bárcena said. “Reducing inequality is essential to achieve a world without poverty.”