WIDENING GAP

In Latin America, the top 20% richest earn on average 20 times more than the bottom 20 percent.

            The gap is widening between the rich and poor in much of Latin America which is the world’s most economically unequal and its most urbanized region, according to a UN report. The richest 20% of the population now earn on average nearly 20 times more than the 20% poorest, a study by the UN Human Settlements Program (UN-HABITAT) found.

            “The main challenge is how to combat such huge disparities in the cities” where eight out of ten of Latin America's 589 million people live, said Erik Vittrup, a UN-HABITAT expert.

            Inequality has grown in Colombia, Paraguay, Costa Rica, Ecuador, Bolivia, the Dominican Republic, Argentina and Guatemala, according to the study titled “State of the Cities of Latin America”, with Guatemala claiming the title as the country with the greatest disparity between the rich and poor.

            The countries with the most equitable spread of riches are Venezuela, Uruguay, Peru and El Salvador. “Income inequality is extremely high. There is a considerable job deficit and a large labour informality affecting mainly the young and women,” the UN said.

            Despite some progress recorded over the past decade, 124 million people live in poverty in Latin America and the Caribbean cities. More than half of them live in either in Brazil or Mexico.

            Nevertheless Brazil advanced compared to 1990 when it had the highest degree of inequality and stood well ahead from the rest of the continent. But the region continues to have the highest inequality rate in spite of advances in helping income distribution. Among some of the causes for distribution improvement are productivity, upward trend of salaries and workers categories, strong economy and implementation of income transfer problems in several countries, particularly in the two leading economies, Brazil and Mexico. In the case of Brazil, the country’s economy now figures sixth at global level.

            Former president Lula da Silva and one of the most popular leaders in history of that country based his success precisely on the Plan Boursa, which distributed a monthly basic food basket to millions, helping anywhere from 14 to 22 million climb out of poverty, plus ensuring his Workers Party an encouraging future.

            Urban areas are projected to keep growing, with nearly nine of ten people expected to live in cities by 2050, the study said, though the pace of the rural exodus has been slowing. However in the Southern Cone, Brazil, Argentina and Uruguay will become the most urbanized area in the world with 90% of population living in cities but in only eight years time.

            “Migrations are now more complex and occur mainly between cities, at times across international borders,” the UN said. However, the agency warned that cities are becoming increasingly less compact, expanding physically in an “unsustainable” pattern.

The study found the urbanization rate is the highest in the farthest south, followed by Andean countries and Mexico, then the Caribbean and Central America.

            It also noted a six-fold increase in the number of cities in the region over the past half century, with half of the urban population (222 million) living in cities with fewer than 500,000 people and 14% (65 million) in mega-cities with more than 5 million people.

            The 50 main cities of Latin America have an annual GDP of more than 842 billion dollars and are the engines of the regional economy. The rapid expansion has also caused a severe housing shortage which jumped from 38 million in 1990 to anywhere from 42 to 51 million in 2011. – Third World Network Features.

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The above article is based on reports published in MercoPress, 22 August 2012.

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