The MDGs in Latin America and the Caribbean: Employment Remains a Challenge for Poverty Reduction

Article excerpt

There is no doubt that Latin America is on track to meeting its commitment to halve the 1990 extreme poverty rate by the 2015 target deadline. The most recent estimates by the UN Economic Commission for Latin America and the Caribbean (ECLAC) show that some 14 million Latin Americans escaped from poverty in 2006 and another 10 million are no longer destitute. The number of poor people stands at 36 per cent of the population (194 million) and those living in indigent conditions at 13.4 per cent (71 million); during 2007, these figures are likely to drop to 190 million and 69 million, respectively. For the first time since 1990, the total number of people living in poverty in the region has dropped below 200 million.

However, these figures merit further careful analysis. On average, Latin America is 87 per cent on track to reach the first Millennium Development Goal (MDG 1) of reducing by half the 1990 extreme poverty rate by 2015. But poverty levels are high when viewed in terms of the potential of Latin America, which has only recently returned to the levels it registered prior to the debt crisis that shook the region during the 1980s. Furthermore, the rate of progress differs greatly from country to country. Of the 17 countries for which ECLAC has data, only four--Brazil, Chile, Ecuador (urban areas only) and Mexico--have met the MDG target; five-- Colombia, El Salvador, Panama, Peru and Venezuela--are on track; and eight--Argentina, Bolivia, Costa Rica, Guatemala, Honduras, Nicaragua, Paraguay and Uruguay--lag behind.

Fulfilment of the MDG targets for hunger and undernutrition across Latin America and the Caribbean demonstrate a similar pattern. Progress in combatting undernourishment--48 per cent of the target goal--since 2001 has been seen, but region-wide figures mask the considerable disparities among countries and do not provide a basis for accurate assessment of individual progress. Five countries currently surpass the target for 2015 and eight have progressed beyond the mid-term target. However, the remaining countries show less progress than anticipated, and to achieve the targets they must increase food supply and improve accessibility at significantly faster rates than in the past. The region as a whole appears likely to meet the target regarding the number of underweight children under the age of five. Its rate of weighted average progress stands at 54 per cent, but the situation among and within countries varies greatly. Five States show insufficient progress and three countries report significant backsliding; the remainder, however, equal or surpass the set targets. Barring major economic downturns, natural disasters or the discontinuation of current policies and programmes, we can expect these countries to meet this target.

The review of progress on the MDG targets for poverty reduction across the region invites us to examine the forces behind these results. On the positive side, we can highlight the ways in which some countries are benefiting from job creation following a return to economic stability as of 2003. We can also point to the importance of the decline in the demographic dependency ratio (the number of dependents in relation to the number of employed per household) that is characteristic of the region's current stage of demographic transition. Monetary transfers, including cash subsidies, pension benefits and remittances, help explain the diverse outcomes among countries. Another significant point is the variations in average incomes, which have dropped in several countries--a trend suggesting that, to a large extent, more employment is not synonymous with better employment. …