MercoPress. South Atlantic News Agency

UN warns poverty “may soar” by 15% in Latinamerica

The global financial crisis could cause poverty to rise in Latin America by as much as 15% this year, a senior UN official has warned. Rebeca Grynspan, regional head of the UN Development Programme (UNDP), said Latin American governments needed to take action urgently.

She expressed particular concern about smaller countries, saying they might not cope with such a big shock. Analysts fear 2.4 million Latin Americans may lose their jobs. Ms Grynspan said the region's governments needed to inject public money into their economies or they could lose the significant social gains made in recent years. She told reporters in Washington that failure to take action would result in a potential rise in poverty of between 10% and 15% this year. She said she was especially concerned for the smaller economies in Central America and the Caribbean - which she said lacked the financial means to deal with the crisis. "My worry is that apart from the biggest governments, the small and medium sized economies may not be able to face up to a shock of this magnitude," she said. Even Brazil, the region's largest economy been feeling the effects of the credit crunch and global slowdown. Brazil has the world's sixth largest car industry, but major car making firms like Mercedes and Volkswagen have placed their workers on mandatory leave. If car sales fail to rise, they have warned that the next step could be mass redundancies. The dramatic drop in the price of oil has also raised concerns about the future of social programmes in major oil exporting countries in the region like Ecuador and Venezuela.