TEMECULA, California — Over the past several years, Latin America and the Caribbean have been a leading force among developing nations in achieving poverty reduction goals.
Success in these developing nations includes economic growth within the labor market as well as expansion of middle class citizens and an overall improved socioeconomic infrastructure.
Progress in this region has been studied in order to gain a better understanding of what is driving change in the region. A recent report by the World Bank Group examines eight countries over the region and aims to uncover the root of influence, in addition to learning how to sustain it. The report also sheds light on ways to translate the region’s progress in order to help other developing nations around the world.
“The Latin America and the Caribbean Region has seen marked and critical progress for its people over the last decade,” says Jorge Familiar, Vice President for Latin America and the Caribbean and Ana Revenga, Senior Director for Poverty at the World Bank Group in the report’s foreword. “Extreme poverty has been halved, inequality has declined, and the growth rate among the bottom 40 percent of the population in the region eclipses the performance of that group in every other region in the world. These are all great strides that have helped transform the socioeconomic makeup of the region and grow the middle class to unprecedented levels.”
Latin America and the Caribbean’s success has driven change on a large scale by establishing a more secure economy with higher incomes. The report highlights the methods implemented to help empower the poor through sustainable solutions. Brazil, Mexico, Colombia, Paraguay, Argentina, Peru, El Salvador and Uruguay were among the eight Latin American countries studied in the report. Each country within the region has been influenced by progress, but in order to ensure continued development, analyzing and understanding how that progress came to be is crucial, and through it, countries will be able to deal with their own unique challenges.
Although Latin America and the Caribbean regions as a whole are progressing, individual countries within them have their own set of necessities. The report’s findings introduce its analysis to tailor an individual country’s needs, beginning with its socioeconomic infrastructure and development needs. With that in mind, applying poverty reduction measures can be tailored to fit the country.
For example, in Brazil, although extreme poverty is approaching zero, an estimated 18 million people remain in poverty. After analyzing its progress, policies and reforms that have previously worked to eliminate poverty in Brazil can be used to help boost the labor market and sustain growth. Focused efforts learned from past success can maximize aid and minimize poverty more quickly.
In Colombia, strong growth paired with increases in labor income and labor market participation helped drive poverty and inequality reduction. Yet, nearly one in three households is still considered vulnerable. Although Colombia is still vulnerable to poverty, it has increased its labor market and income substantially over the last few years.
Similarly, Peru, which had one of the highest progression rates in Latin America, has seen considerable results, according to the report. But even then, poverty is still a persistent factor in the country, with 50 percent of the poor and 80 percent of those living in extreme poverty residing in rural areas.
Paraguay saw an increase in income growth as well and has progressed at a fast pace when compared to other developing nations. Higher employment rates along with low food prices and higher labor income accounts for the country’s economic growth over the last ten years.
Additionally, the report includes breakdowns of which policies have been imperative to the region and which have not contributed toward its progress. Prosperity in Latin America and the Caribbean over the past decade can pave the way for progress in developing nations all over the world. This progress can help direct aid efforts and policies and tailor them to the specific needs for not only the remaining countries in Latin America and the Caribbean, but for other nations in need as well.
“As the World Bank Group continues to work with its partners to end poverty by 2030 and boost shared prosperity around the world, knowing who remains poor and vulnerable and how to increase the welfare of the bottom 40 percent in each country will be crucial,” Familiar and Revenga said.
Latin America and the Caribbean reveal that poverty reduction goals can be achieved. Even in the midst of poverty goal criticisms, the regions serve as proof that reducing and eventually eradicating poverty is possible.
– Nada Sewidan
Sources: The World Bank 1, The World Bank 2 , IADB