According to ECLAC's Social Panorama of Latin America:
The Number of Poor People in Latin America Has Fallen by 13 Million Since 2003
For the second year running, the number of poor people in the region continues to decline, but 213 million still live in poverty.
(25 November 2005) Estimates from ECLAC's flagship report, Social Panorama of Latin America, 2005, indicate poverty declined by 13 million people between 2003 and 2005. It nonetheless remains high, affecting 213 million people (40.6 %), of which 88 million (16.8 %) are indigents.
Improving economic conditions, remittances from emigrants, and increased social expenditures have all helped to turn around the rising trend that prevailed in the region from 1990 on, notes ECLAC.
New measures indicate that poverty declined in most countries. In 2004, it fell 16 percentage points in urban Argentina, while indigence was down 9.8 points since 2002. In Mexico, poverty has been declining since 1996, and in 2004 it dropped a further 2.4 percentages points from overall levels in 2002, with a decline in indigence of 0.9 percentage points, mainly in rural areas. Likewise, indigence was down 2.8 percentage points in Peru.
Forecasts for this year show that the region has met 51% of the first Millennium Goal, which requires halving the extreme poverty levels posted in 1990 by 2015. ECLAC considers this encouraging news, but notes that since 15 of the 25 years have already passed (60% of the time period), the region is still not on target.
This edition of Social Panorama examines social conditions in each country, looking at the basic shortages experienced by the population in terms of housing, access to drinking water, sewage treatment and primary education.
The most common deficiencies involve housing deficits, the report concludes. More than 30% of the population in nine (of a total of 14) countries live in overcrowded conditions, with three or more people per room. A similar percentage lack any connection to public water mains (or a septic system in rural areas), in 13 of 17 countries.
The Importance of Remittances
Remittances of funds from abroad made it possible for 2.5 million Latin Americans to escape poverty in 2002. These remittances have a major influence on the level and distribution of the incomes of receiving families, by allowing many to escape poverty and improve their situation compared to others, ECLAC notes.
In 2004 remittances flowing into Latin America and the Caribbean reached an estimated US$45 billion, about the same amount as foreign direct investment and more than official development aid.
In several countries, remittances amount to about 10% of Gross Domestic Product (GDP), suggesting enormous dependency on these flows as motors for economic growth, according to ECLAC. The highest percentages occur in Haiti (29%), Nicaragua (18%), Guyana and Jamaica (17%), and El Salvador (16%).
Remittances from abroad generally constitute a major source of income for low-income households. In nine of the 11 countries analyzed, half of those in receiving households would be under the poverty line without this support.
According to the Gini index (a measure of inequality, usually in terms of income), these remittances improve income distribution in the receiving households in every country examined, except Honduras. El Salvador has posted the largest decline in inequality, followed by Ecuador (urban areas), Guatemala, México, Nicaragua and the Dominican Republic.