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News > Latin America

What Does the Rise of Latin America's Right Mean For Poverty?

  • Latin America continues to reduce poverty and inequality at a faster pace than other regions.

    Latin America continues to reduce poverty and inequality at a faster pace than other regions. | Photo: Reuters

Published 17 October 2016

As a region, Latin America, particularly from the turn of the century, waged war on poverty. Is that about to change?

When the United Nations presented an update of its Millenium Development Goals (MDGs) in 2015, acknowledging regional and national progress in fulfilling its aims, one region stood out as achieving particularly outstanding results, especially in the area of poverty reduction: Latin America.

Inequality in Latin America: Chasm Grows Between Rich and Poor

According to the U.N.’s Economic Commission for Latin America and the Caribbean, of 19 countries in the region in 2014 approximately 28 percent, or 167 million people, were living in poverty. Twelve percent were living in extreme poverty.

But key to the U.N.'s MDGs was a commitment to reducing the 1990 poverty rate by half by 2015.

As a region, Latin America, particularly from the turn of the century, managed to do this. From 1999 to 2010 alone, with left-wing government's in power, poverty fell from 43.8 percent to 31.8 percent.

This won plaudits from across the board, with actors as diverse as the hard-left, Oxfam and the World Bank praising the efforts of left-wing government's in the region.

The Winners

Bolivia, without a doubt, is one of the undisputed champions of poverty reduction. According to the U.N., in recent years the Andean country, the poorest in South America, has actively combated extreme poverty and has the highest levels of poverty reduction in the region due to the redistributive policies of Indigenous President Evo Morales' administration.

Bolivia Announces End to Extreme Poverty by 2025

By 2005, extreme poverty in Bolivia had reached 38.2 percent but since 2006 when popular support and widespread protest saw President Morales come to power, Bolivia has experienced radical social change. By 2014, the levels plummeted to 17.3 percent.

On top of that, sustainable economic development and greater levels of public investment saw unemployment fall from 8.1 percent in 2005 to 3.5 percent in 2014.

Venezuela's Extreme Poverty Continues to Drop

Venezuela has also led the charge in poverty reduction, particularly under the Bolivarian Revolution of Hugo Chavez, who created "Missions" aimed specifically at combating poverty along with other social ills.

Each mission targets a specific aspect of poverty, such as housing and education. Government funding for social spending including the missions has skyrocketed over the last decade. The results have been astounding.

In 1999, when Chavez was elected president, Venezuelans living under the poverty line stood at a staggering 49.4 percent of the population. In 2014, this number fell to 27.8 percent.

To add to this, in 1999, 21 percent of homes were registered as experiencing extreme poverty. By 2014, extreme poverty had dropped to 5.4 percent.

As of July 2015, the number of Venezuelans living in extreme poverty had dropped to a historic low of 4.5 percent, nearly half that of neighboring Colombia, where over 8 percent of the population lives in extreme poverty according to 2014 statistics. 

Ecuador Recognized by UN for Poverty Reduction

Next, comes Ecuador. According to the left-wing President Rafael Correa, 3.1 million people in a country of 16 million have left the terrors of extreme poverty during his administration. 

Indeed, poverty levels in Ecuador were reduced by 10.3 percent from 2007 until 2012, and extreme poverty was down 6.9 percent in the same period, according to the World Bank.

Public investment has been the key priority of the Correa government. Meanwhile, it has achieved US$8 billion savings due to a renegotiation of its external debt, and a fairer, better system of tax collection.

The Future

The Economic Commission for Latin America and the Caribbean predicts that levels of poverty are about to increase in the region. This comes on the back of right-wing government's coming to power in key countries, who favor harsh austerity measures, massive layoffs, a reduction in the minimum wage and restrictions on social rights.

Afro-Colombians Maintain General Strike for Economic Justice

One of the most unequal countries in the region, Colombia, has managed to reduce poverty in recent years though this happened by a fraction in 2015: from 28.5 percent to 27.8 percent. According to the U.N's human development index, Colombia also loses points in access to health, education and jobs.

After the peace agreement between President Manuel Santos' administration and the Revolutionary Armed Forces of Colombia (FARC) was rejected in the plebiscite, hundreds of thousands of people affected by the conflict continue to live in difficult conditions.

Many campesinos and former rebels are likely to remain excluded and are unable to access proper schooling, training and healthcare.

Argentina's Poverty Rate Increasing Dramatically Under Macri

But the best example of how not to deal with the issue of poverty comes from the new, neoliberal Argentine government of Mauricio Macri.

Since coming to office, Macri has faced constant protests as more than 150,000 jobs, cuts to education and revisions to the country's tax and tariff rates have privileged large, commercial exporters at the expense of small farmers and public sector workers.

The National Statistics Institute announced that 32.2 percent of the people living in Argentina are now living below the poverty threshold. Unemployment in the country stood at nearly 10 percent as of August 2016.

In addition to the 14 million Argentines who live in poverty, 6.3 percent of all citizens don’t even have enough to buy food to meet the minimum monthly nutritional requirements, and a surprising 1.4 million people have fallen into poverty in 2016.

Meanwhile, in Brazil, deposed President Dilma Rousseff recently warned of the new, right-wing administration's "plan against the poor."

The comments were made in relation to the PEC 241, a constitutional amendment by the administration of Michel Temer that would freeze the budget for public spending until 2037 and force future governments to severely limit spending on health, education, social welfare and public services.

The proposed bill states that the annual budget for public spending would be defined by the growth of inflation in the country during the previous year, and no longer dictated by GDP revenue growth. This is meant to reduce the nation's public debt and “stabilize” the country, according to the coup administration.

According to Rousseff, however, if passed PEC 241 will devastate Brazil's social fabric with areas as diverse as culture, security, sports, human rights, family farming and agriculture all affected.

In order to  emphasize just how destructive PEC 241 would be, Rousseff noted that if the policy was implemented over the past decade, the state's 2016 budget for healthcare would have been half of what it currently is.

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