MercoPress. South Atlantic News Agency

Latin America and the Caribbean the most unequal region in the world

Nevertheless Uruguay stands out as the country with the best indexes of the region

Latin America and the Caribbean is the most unequal region in the world with ten of the fifteen countries with the highest levels of inequality in the region. This inequality is persistent, self-perpetuating in areas where social mobility is low and it poses an obstacle to progress in human development.

According to the first ever Human Development Report for Latin America and the Caribbean “Acting On The Future: Breaking The Intergenerational Cycle Of Inequality”, published Wednesday by the United Nations Development Programme (UNDP), inequality in the region is 65% higher than in high income countries, 36% above the Far East and 18% higher than Sub-Sahara Africa.

“The country with the lowest incomes’ inequality is Uruguay and Bolivia the highest”, points out the report. Regarding access to services and infrastructure Peru presents the largest gap, 57% when referred to drinking water, comparing the richest fifth with the poorest fifth. Countries with the least gaps are Chile, 5%; Argentina, 4%, Costa Rica, 4%, Uruguay, 2%. More specifically regarding access to the power grid, in Peru the gap is 55% compared to Chile’s 1%.

According to UNDP inequality in Latin America is not only deep but sustained since gaps have remained virtually unmoved since the seventies. In Central America the rate has had a slight sustained tendency to diminish since the nineties, but in the Southern Cone and the Andean Region, inequality soared in the nineties and it was not until the following decade that it underwent a significant contraction.

The report finds that it is possible to reduce inequality in Latin America and the Caribbean. It proposes the design and implementation of public policies on three fronts to lift the region out of the inequality trap. These policies must have an impact on people (“reach”), address the set of constraints that perpetuate poverty and inequality (“breadth”) and empower people to feel they are in charge of their development destinies (“ownership”).

According to the report, factors at household level and within the political system serve to perpetuate inequality. Achieving a clearer understanding of these factors will make it possible to design policies that successfully combat poverty and achieve meaningful reductions in inequality in the region.

“This report reaffirms the critical importance of the fight against poverty, while indicating that it is necessary to go further” said UNDP Regional Director Heraldo Muñoz. “Inequality is inherently an impediment to progress in the area of human development, and efforts to reduce inequality must be explicitly mainstreamed in the public agenda.” For UNDP “equality is instrumental in ensuring meaningful liberties; that is to say, in terms of helping all people to share in meaningful life options so that they can make autonomous choices,” he added.

Women, indigenous populations and those of African descent are the groups hardest hit by inequality. Women in the region are paid less than men for the same work, they have a greater presence in the informal economy and they face a double workload. Furthermore, when compared to those of European descent, twice as many members of indigenous and African descended populations, on average, live on US$1 per day.

The report also introduces a new type of indicator which shows how inequality impacts human development. According to this estimate, the Human Development Index of countries in the region would diminish, on average, by between 6 and 19% if the index were corrected to reflect inequality.

Rebeca Grynspan, UNDP Associate Administrator, pointed out that: “Inequality is a source of social vulnerability. For that reason, as the report shows, it’s critical to advance knowledge of the factors explaining inequality in human development in Latin America and the Caribbean and its persistence from one generation to the next. That would allow the proposal of a strong framework for development of targeted policies that drive a more equality-based development”.

The study indicates that the most common public policies in the region have focused on specific aspects of combating poverty without considering the deep-seated nature of deprivation and its systemic relationship to inequality. The report also shows that income and education levels are some of the factors responsible for continuing inequality in human development. Nevertheless, there are other structural causes of political and social origin that reflect historical factors, lack of equality of opportunity and lack of empowerment, resulting in states of marginalization, oppression, and domination.

“In order to break the ongoing cycle of inequality it’s necessary to implement comprehensive social policies financed with more progressive fiscal arrangements,” said Luis Felipe López Calva, UNDP Chief Economist for Latin America and the Caribbean.

Lowering inequality helps to create connected societies in which economic growth and social cohesion are strengthened. Conversely, inequality perpetuates itself, as much for economic reasons as for reasons of political economy, the report concludes.