CEPAL SHOWS SOUTH AMERICA LAGGING IN EFFORTS TO COMBAT POVERTY

   
The UN Economic Commission for Latin America and the Caribbean, best known by its Spanish acronym CEPAL, released its report "Social Panorama of Latin America, 1999 - 2000" on August 17, 2000. The report, which can be found in its entirety at www.cepal.cl, reaches some startling conclusions about social conditions in the region.

A press release announcing the report's publication notes that "a growing sense of being threatened, vulnerable and at risk affects most of the region's people today, including part of the middle classes….Social vulnerability is reflected in public opinion surveys carried out in the late 1990s and has become a typical characteristic of Latin American society in the early 21st century."

According to CEPAL, 45% of Latin Americans live in poverty, the equivalent of 220 million people-of which 117 million are below the age of 20. "The lack of employment or its poor quality is the clearest link between vulnerability and poverty, due to the fact that salaried income is the main source of subsistence for middle- and low-income households," the report explains. "According to the study, the precariousness of employment rose during the past decade, as did the number of people working in informal or low productivity sectors. In 1999, this reached nearly 50% of the work force in urban zones, more in rural areas."

Perhaps the most surprising finding of the study was the progress that some countries have made in combating poverty compared to others. "Between 1998 and 1999 one group of countries successfully reduced poverty levels. Others, however, saw the interruption of positive trends apparent during the first eight years of the 1990s," the report states. "Mexico, Central America and the larger countries of the Caribbean maintained and even increased their rhythm of economic growth. They reduced unemployment, increased real wages and reduced poverty levels. In contrast, in most South American countries, Gross Domestic Product stagnated or fell, open unemployment rates rose, and real wages fell, which very probably helped maintain or increase poverty levels."

The fact that Central America and the Caribbean seem to have outperformed South America will produce some exciting debates. What are the factors behind this surprising situation? Could it be due to the phenomenon of remesas, the flow of funds from immigrants living in the United States to their families in Central America and the Caribbean? Might the explanation be the proximity of US markets and the growth of the maquila industry in these countries? The CEPAL study should provide plenty of material for further discussion.