Despite Predictions Latin America Plunges into Poverty and Inequality

By Raúl Antonio Capote on March 28, 2024

photo weforum

Despite Predictions Latin America Plunges into Poverty and InequalityCalculations and predictions about the economy in the world, is beginning to show its first results for 2024. The International Monetary Fund (IMF) forecasts a slight decline in world growth to 2.9%, compared to 3% in 2023, forecasts that, so far, have been met fairly closely.

The U.S. Federal Reserve estimates that the U.S. economy will expand by a modest 1.4% in 2024 and 1.8% in 2025. China, Latin America’s second largest trading partner, is projecting growth of 4.2% in 2024, slightly below what it anticipated at mid-year, but up from 3% in 2022.

In the case of Latin America, according to the World Bank, once again this year the region will be the one that will grow the least in the world. According to updated estimates growth will be 2.3% in 2024, compared to 5.6% for South Asia, 4.5% for Asia Pacific, 3.5% for the Middle East and North Africa and 3.8% for Sub-Saharan Africa.

The United Nations Economic Commission for Latin America and the Caribbean (ECLAC), in turn, says the regional economy will grow by only 1.9% this year, down from its 2.2% growth last year.

The Caribbean economies stand out, which will reach 8.3% as a whole, mainly due to the oil boom in Guyana, according to ECLAC.

Venezuela will reach 4%, Paraguay will almost equal that figure and Uruguay 3.2%, on the other hand, some of the largest countries in the region are expected to grow little or not at all, according to ECLAC. Brazil will grow by only 1.6%, Colombia by 1.7% and Mexico by 2.5%.

After Guyana, the best performing economies in 2024 would be Panama and the Dominican Republic, with projections of 4.2%.

What is really significant, beyond the figures, is that per capita income in Latin America today is the same as in 2013. Rising inequalities and stagnating productivity are causes for concern, according to an ILO report.

More than 180 million people in the region do not have sufficient income to cover their most pressing needs; a third of the population lives in poverty.

Of the 292 million workers in the region, one out of every two is employed in informal jobs and 4 out of every 10 have incomes below the minimum wage, and half of them do not contribute to pension systems.

Meanwhile, the majority of children under 15 years of age and people 65 years of age or older live in completely informal or mixed households, representing 61.2%.

In Latin America and the Caribbean, in countries such as Brazil, Colombia, Guatemala, Honduras and Panama, income inequality is extremely high.

It is the region with the highest income inequality in the world. The richest 10% in Latin America concentrate a 37% share of income, and the poorest 40% receive the smallest share (13%).

The incidence of poverty is even higher in rural areas and among Afro-descendants and indigenous people, who are more likely to be poor and less likely to finish school or get a formal job.

Inequality fosters criminal, political and social violence because it affects the most vulnerable, perpetuates and amplifies differences in various aspects of human development, including rights, income, health, education and political representation, and also affects economic growth through its impact on individuals, businesses, communities and institutions.

Raúl Antonio Capote  is a Cuban writer, professor, researcher and journalist. Author of “Juego de Iluminaciones”, “El caballero ilustrado”, “El adversario”, “Enemigo” “La guerra que se nos hace” and is a frequent contributor to Cuba en Resumen

Source: Cuba en Resumen