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Jorge Familiar | Can we win the fight against poverty?

Published:Monday | October 17, 2016 | 10:00 AMJorge Familiar

During the International Day for the Eradication of Poverty on October 17, it is worth asking ourselves: Can Latin America and the Caribbean win the fight against poverty?

According to the latest World Bank numbers, poverty in the world continues to fall despite the global economic slowdown. In Latin America and the Caribbean meanwhile, poverty measured according to the under US$2.50 per day threshold dropped from 25.5 per cent to 10.8 per cent between 2000 and 2014.

At the same time, inequality came down, largely due to the fact that the poorest 40 per cent of the population managed to increase their income levels faster than the overall rate. And all of this thanks to the economic growth resulting from the commodity boom of the past decade which meant more and better jobs and, to a lesser extent, the contribution of social programmes such as Prospera in Mexico and Bolsa Familia in Brazil, focused on breaking the intergenerational cycle of poverty among lower income families.

In short, the region has experienced a profound social transformation. For the first time, there are more people living as middle class than in situation of poverty. We are a more connected society now, with greater expectations. If in the past any opportunity was perceived as a good thing, now any progress is seen as insufficient. Our population is now more demanding, both with the economy as well as the authorities. The challenge is to turn these expectations into reality as circumstances have become more complex. The commodity boom is now history, available financial resources are fewer and the global economy is growing slowly.

In this scenario, the region needs to revive its drivers of economic growth. Even though our latest estimates indicate that the region will start growing again (around 1.8 per cent in 2017), it is hard to think that this growth will be enough to speed up the progress made against poverty and inequality, or to continue expanding the middle class.

 

THE IMPORTANCE OF INT'L TRADE

 

International trade is undoubtedly one of the engines needed to boost such growth. Although a significant number of regional economies have for years focused on producing and exporting commodities, they must now diversify their production and the destinations of these products. The Pacific Alliance, including Colombia, Chile, Mexico and Peru, is a great step in this direction. There are other countries, such as Argentina, that are undertaking considerable efforts to open up to the world, reactivate their economies and look to the future.

As well as working on reviving growth, we should not be forgetting inclusion, as Latin America and the Caribbean remains the most unequal region in the world, despite historic progress achieved in the past decade, which has unfortunately stagnated since the economic slowdown.

One way of fighting inequality while being prepared for the economy of the future, is to invest in people and, more concretely, provide better and greater opportunities to kids. The idea is to improve their access to basic services, such as water, sanitation and health, as well as quality education and the Internet, in order to develop the skills needed for a better future.

According to our Human Opportunity Index, access to education among children aged 16 and less in Latin America and the Caribbean is currently almost universal. And these advances were especially dramatic in the countries that lagged further behind at the start of this century.

During the same period, the region expanded access to information technology and communications. Access to mobile phones, in particular, increased from 13 per cent in 2000 to over 90 per cent in 2014.

This index reminds us how much we have achieved, but also how much we still have to go in terms of guaranteeing greater and better opportunities for all. Increasing the quality of education and increasing access to basic services and technological advances will be crucial not just to revive growth, but advance the great social transformation that began more than a decade ago.

This is the only way we will be able to win the fight against poverty and inequality.

• Jorge Familiar is the World Bank's vice-president for Latin America & the Caribbean. Email feedback to columns@gleanerjm.com