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Millennium Development Goals
Equity and Social Indicators (EQxIS)
December 6, 2005
A closer look at poverty in Latin America
According to Jeffrey Sachs, in his recent presentation, “Next Steps in the Fight Against Poverty” at the IDB Forum of the Americas, Latin America is not that poor. It already possesses many of the foundations of economic success: Natural wealth, a highly urban population, high literacy rates, high levels of gender equality and geographically speaking, it is overwhelmingly coastal, miles of shoreline that can open many doors to trade and globalization.
Additionally, when looking at the UN Human Development Index (HDI) for the region, measurements that are based on the weighted average of income per capita, life expectancy and education (in terms of enrollment levels and literacy rates), Latin America fares much better than much of Africa and Asia. There are no famines, AIDS is not as devastating as in Africa, the region is mostly malaria, terrorist, and war-free, extreme poverty rates have remained relatively steady at 9 percent for the past 20 years and infant and maternal mortality rates have decreased across the board.
However, when GDP per capita rates for the region are compared with these quality of life indicators, they are consistently lower and a pattern of economic stagnation emerges. Why then has the region not met expectations for economic growth if it performs comparatively well on many of the human development indicators?
According to Sachs, the two principle factors contributing to the bleak economic panorama facing much of Latin America are persistent inequality and the lack of emphasis placed on the role of science and technology in the economic development dynamic.
For the past 20 years, Latin America has focused on a market-based approach to trade and industrial development, something that Sachs sees as insufficient without prioritizing science and technology. Compared to the fastest-growing economies in East Asia, where the investment in research and development is about 2-3 percent of GDP, in Latin America, it only accounts for one half of 1 percent of GDP.
Investment in developing agricultural technologies is among the lowest in the world, despite the economic importance of the agricultural industry region wide.
Sachs stresses, however, that while the linkage between science, technology and development is underplayed in Latin America, the region is “ripe for a breakthrough”, citing greater investment in higher education as a way to work towards this goal, as well as to decrease inequality.
While quality of life measurements for the region as a whole may have improved over the past couple of decades, there are still pockets of extreme poverty throughout the region that deserve to be approached differently, specifically, Haiti and the highlands of South and Central America.
The conditions in Haiti are more similar to those in sub-Saharan Africa than to countries in Latin America and it has suffered the greatest disdain and neglect in the Hemisphere for over two centuries. Similarly, the Andean and Central American highlands are much farther away from reaching the Millennium Development Goals (MDGs) than the rest of Latin America.
Sachs concluded his discussion by talking about an area where Latin America could possibly be a leader: the environment. Understanding the current environmental dynamics underway, such as climate change and global warming, how they are going to affect the region and proper responses to these challenges, is paramount. While Africa is concentrating on sheer survival and Asia is too big, diverse and environmentally incoherent to take a leading role on the issue, Latin America should step in, said Sachs.
© 2005 Inter-American Development Bank. All rights reserved.
Millennium Development Goals
Equity and Social Indicators (EQxIS)
December 6, 2005
A closer look at poverty in Latin America
According to Jeffrey Sachs, in his recent presentation, “Next Steps in the Fight Against Poverty” at the IDB Forum of the Americas, Latin America is not that poor. It already possesses many of the foundations of economic success: Natural wealth, a highly urban population, high literacy rates, high levels of gender equality and geographically speaking, it is overwhelmingly coastal, miles of shoreline that can open many doors to trade and globalization.
Additionally, when looking at the UN Human Development Index (HDI) for the region, measurements that are based on the weighted average of income per capita, life expectancy and education (in terms of enrollment levels and literacy rates), Latin America fares much better than much of Africa and Asia. There are no famines, AIDS is not as devastating as in Africa, the region is mostly malaria, terrorist, and war-free, extreme poverty rates have remained relatively steady at 9 percent for the past 20 years and infant and maternal mortality rates have decreased across the board.
However, when GDP per capita rates for the region are compared with these quality of life indicators, they are consistently lower and a pattern of economic stagnation emerges. Why then has the region not met expectations for economic growth if it performs comparatively well on many of the human development indicators?
According to Sachs, the two principle factors contributing to the bleak economic panorama facing much of Latin America are persistent inequality and the lack of emphasis placed on the role of science and technology in the economic development dynamic.
For the past 20 years, Latin America has focused on a market-based approach to trade and industrial development, something that Sachs sees as insufficient without prioritizing science and technology. Compared to the fastest-growing economies in East Asia, where the investment in research and development is about 2-3 percent of GDP, in Latin America, it only accounts for one half of 1 percent of GDP.
Investment in developing agricultural technologies is among the lowest in the world, despite the economic importance of the agricultural industry region wide.
Sachs stresses, however, that while the linkage between science, technology and development is underplayed in Latin America, the region is “ripe for a breakthrough”, citing greater investment in higher education as a way to work towards this goal, as well as to decrease inequality.
While quality of life measurements for the region as a whole may have improved over the past couple of decades, there are still pockets of extreme poverty throughout the region that deserve to be approached differently, specifically, Haiti and the highlands of South and Central America.
The conditions in Haiti are more similar to those in sub-Saharan Africa than to countries in Latin America and it has suffered the greatest disdain and neglect in the Hemisphere for over two centuries. Similarly, the Andean and Central American highlands are much farther away from reaching the Millennium Development Goals (MDGs) than the rest of Latin America.
Sachs concluded his discussion by talking about an area where Latin America could possibly be a leader: the environment. Understanding the current environmental dynamics underway, such as climate change and global warming, how they are going to affect the region and proper responses to these challenges, is paramount. While Africa is concentrating on sheer survival and Asia is too big, diverse and environmentally incoherent to take a leading role on the issue, Latin America should step in, said Sachs.
© 2005 Inter-American Development Bank. All rights reserved.
