MercoPress. South Atlantic News Agency

Chile among the countries with greatest income inequity

In spite of the sustained growth and excellent performance of its economy Chile figures among the fifteen world countries with the greatest inequity between rich and poor, according to the latest World Development report published by the World Bank and released this week.

Of a survey totalling 130 countries, Chile is among the 15 with the worst wealth distribution which includes eight African countries and the rest from Latinamerica. This even when Chile outstands in several development and social indexes such as poverty reduction, drop in infant mortality and access to education.

However according to the report, the situation becomes discouraging if Chile is compared to its real competitors in a globalized world such as the emerging economies of Eastern Europe and Southeast Asia, with Poland, Bulgaria, Ireland and Hungary clearly distanced from South America's most dynamic economy.

The "Equity and Development" report from the World Bank points out that those policies geared to reduce inequity among rich and poor have a most positive effect on the overall performance of a country's economy. To reduce the gap the report recommends redistribution appealing to subsidies and advantages for the poor and groups with lesser income.

Although belonging to the "black list" of fifteen, on the bright side Chile is praised for the low level of poverty pointing out to the fact that the percentage of population described as poor had dropped to less than 17% in 1998.

Furthermore only 2% of the Chilean population is considered indigent, (which means they live with less that one US dollar per day).

Another interesting point in the report is that even when Chile has the highest economic growth rate in Latinamerica, and is above world average, it still lags behind compared to its real competitors in a global world.

Between 2000/04 Chile expanded at an annual average of 3,4% having reached a GDP equivalent to 94.1 billion US dollars. This compares favourably with Latinamerica's average 1,5% in the same period (with the exception of Peru, Ecuador and Costa Rica) and the world's annual 2,5% between 2000/04.

But the same can't be said when compared with other emerging economies particularly in Eastern Europe and Asia.

For example Bulgaria, Lithuania and Ireland which are normally compared to Chile, averaged 5%. Furthermore Bulgaria, which is considered a similar economy to Chile's and Sweden's managed an average growth of 4,7%.

At world level the most dynamic regions in the five year period according to the report are in Africa and Middle East where several countries registered the highest expansion rates. At the other end are Europe and Central America which actually had an average negative showing.