UN Warns 30 Million Latin Americans May End Up Back in Poverty
A new report says governments must continue to make social investments and place focus on marginalized populations.
As many as 30 million people in Latin America, who were recently lifted out of poverty, could go back to being poor, a report from the United Nations Development Programme warned Tuesday.
Thanks to investments in social programs and wealth redistribution policies over the past 15 years, approximately 72 million Latin Americans were lifted out of poverty and a further 94 million moved into the middle class.
However, according to the UNDP, 2015 and 2016 saw a rise in the number of people living in poverty in the region for the first time in decades.
The report, entitled “Multidimensional Progress: Well-Being Beyond Income,” says more than a third of those who left poverty since 2003 are now at risk of becoming poor again.
The UNDP report stressed that the economic slowdown being experienced throughout the region is only one factor.
“Every Latin American generation decides which structural changes to pursue: there are pending citizenship and resilience challenges that will not be solved with economic growth alone,” said George Gray Molina, lead author and UNDP chief economist for Latin America and the Caribbean.
Molina specified that recent achievements were not attributable to free market policies, but rather direct government intervention.
The UNDP is calling on governments to support vulnerable or marginalized groups through social investment and subsidies.
“Right now, on the one hand, we must protect the region’s past achievements, including preventing millions from of people from falling back into poverty; on the other hand, we must also promote inclusive policies and comprehensive strategies for populations suffering from historical discrimination and exclusion,” said United Nations Assistant Secretary-General and UNDP Regional Director for Latin America and the Caribbean Jessica Faieta.
Left-wing governments, such as Ecuador and Bolivia, have pledged to maintain social investment, despite the downturn in the economy.
However, right-wing governments, such Mauricio Macri’s in Argentina, have pursued policies that have made living more expensive for the poor. According to an April report by the Social Debt Observatory of the Argentine Catholic Church, in only a few months over 2 million Argentines have been pushed into poverty.
The report also suggested that reforms to tax codes to make them more progressive could lessen the burden on low-income people. Governments throughout Latin America largely depend on revenue from resource extraction and value-added taxes, which tend to be regressive.
A 2015 report by the U.N. Economic Commission for Latin America and the Caribbean called for a reform of tax codes to reduce inequality and improve tax collection on high-income earners.
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