poverty, inequality and ethnicity: a note to policy makers on latin america

© The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2005

point de vuebyNigel Poole

Poverty, Inequality And Ethnicity: A Note to Policy Makers on Latin America

Pauvreté, inégalité et appartenance ethnique: note pour les décideurs sur l’Amérique latine

Armut, Ungleichheit und ethnische Merkmale: eine Anmerkung zu Lateinamerika für Politikakteure

44 EuroChoices 4(3)★

4-3_07PoolePDV.indd 444-3_07PoolePDV.indd 44 30/11/2005 13:25:4530/11/2005 13:25:45


This article refl ects on the impact of

the Millennium Development Goals

(MDGs) in tackling global poverty,

and then discusses inequality, thereby

drawing attention to poverty in

regions of the world that on average

are ‘less poor’ according to the ‘one-

dollar-a-day’ poverty threshold. The

focus moves to Latin America, where

poverty and inequality are closely

related to ethnicity and, in the face of

declining assistance, argues for more,

not less, commitment from policy

makers to tackling poverty and the

‘ethnic gap’.

‘One dollar a day’: the MDGs

The problem of poverty moved

towards the centre of the

international policy arena during

2005: the UK Presidency of the

EU established as a priority the

development of a long-term strategy

for Africa, and this coincided with

the UK Presidency of the G8 and

the Gleneagles Summit in July,

with African development as a key

objective. The United Nations

Millennium Summit in September

2005 reiterated the international

commitment to the Millennium

Declaration which was adopted by

the UN General Assembly fi ve years

previously, and focused, with limited

success, on global poverty reduction.

In the popular arena, ‘Making

Poverty History’ has become a global

movement.

In particular, the UN Millennium

Development Goals (MDGs)1 have

catalysed the interest in poverty

reduction of the general public and

the media, as well as researchers

and policy makers, in the global

commitment to, inter alia, ‘eradicate

Que ce soit par

les donateurs interna-tionaux, les autorités européennes ou non, ou encore des agences plus modestes, l’impératif de réduction de la pauvreté doit être repensé et élargi aux considé-rations d’équité….. l’ inégalité n’est pas indifférente.

45EuroChoices 4(3) ★



extreme poverty and hunger’ (Goal

1) by the Millennium Declaration

target year 2015. This interest is

partly attributable to the simplicity

of the ‘one-dollar-a-day’ poverty

threshold, which has the considerable

attractions of ease of communication

and comprehension. Few people can

be unaware of the simple truths that,

by these agreed standards, much of

world is poor, and that global poverty

is concentrated in Sub-Saharan Africa

and South Asia.

Other dimensions of poverty

Simplicity is sometimes problematic,

however. Firstly, poverty eradication

is only one of the eight MDG targets,

which also cover health, education,

gender, environmental and other

objectives. Secondly, to halve ‘the

proportion of the population living

on less than $1 per day’ by 2015 is

only one of the indicators of the

MDG poverty target. The others

are Indicator 2 – ‘the poverty gap

ratio’, which takes into account the

incidence and depth of poverty - and

Indicator 3 – ‘the share of national

consumption of the poorest 20 per

cent (quintile)’. These indicators

are more nuanced approaches to

assessing poverty because they

embrace elements of inequality.

Inequality matters, as well as the

absolute numbers that fall below a

particular poverty threshold, and

justifi es attention to Indicators 2

and 3 as well as the current popular

MDG indicator2. Both politically

and morally it is a short step from

inequality – unevenness in the

distribution of wealth - through

inequity – unfairness among different

sections of the population - to iniquity

– the political and moral dimension.

Inequality and poverty in Latin American

Therefore, the use of these more

nuanced approaches to poverty

assessment draws attention also

to regions of the world, which, by

the ‘one-dollar-a-day’ average, are

less poor, but where there are deep

pockets of poverty. As Besley and

Burgess note (2003), of the major

regions of the world, inequality in

income distribution is greatest in

Latin America (LA). World Bank data

accessed from the United Nations

MDG website can be used to calculate

the share of the poorest 20 per cent

in national consumption (Indicator

3). Table 1 shows for a range of 96

countries grouped into geographical

regions the percentage of national

income (or consumption) that

corresponds to the poorest quintile

(20 per cent) of the population.

The small share of the poorest 20

per cent in the 17 LA countries is

striking compared with other regional

groups. Two regions comprising 15

Sub-Saharan African countries and

two Caribbean countries are the

others to fall below the mean of the

total sample. In contrast, inequality

in the groups of European countries

is much less extreme: the poorest 20

per cent of the European groups of

countries enjoy more than twice the

share of national income of the Latin

Americans.

Poverty and inequality in Latin

America are closely linked to

another phenomenon, ethnicity: it is

among the indigenous populations

of LA countries where poverty is

concentrated. This is having political

and social consequences (Inter-

Politikakteure

aus der EU und aus anderen Ländern, die internationalen Geldgeber und kleinere Agenturen müssen aus Gründen der Fairness einen umfassenden Blick auf die Agenda zur Armutsbekämpfung wiedererlangen und beibehalten ... Ungleichheit muss ernst genommen werden.

Table 1. Mean share of poorest 20 per cent of the population in national

income/consumption (real $)

Country groupings %

17 Latin American countries (LA) 3.25

15 Sub-Saharan African countries (SSA) 5.29

2 Caribbean (CB) 5.90

Mean of the total sample of 96 countries 6.27

10 South-East/East Asian countries (SEA) 6.39

10 Middle East/North African countries (MENA) 6.74

5 Other advanced economy countries (Other advanced) 6.86

7 Central Asian countries (CA) 7.39

10 European Union countries (EU) 7.67

13 Central European countries (CE) 7.75

3 Balkan countries (BA) 8.73

4 South Asian countries (SA) 8.75

Source: Own calculations based on the most complete (1997) data from World Bank World Development Indicators: Poorest quintile's share in national income or consumption, per cent (WB) [code 29950].http://millenniumindicators.un.org/unsd/mi/mi_series_results.asp?rowId=585




American Development Bank, 2004)

and therefore understanding inequity

and the ‘ethnic gap’ is timely. The

Zapatista uprising in southern Mexico

during the latter part of the 1990s

highlighted dramatically the need

for empowerment, inclusion and

equitable socio-economic policies,

and the effects continue. Indigenous

political activism is becoming

widespread, particularly in Andean

countries (Economist, 2005), and

the current (mid-2005) unrest in

Bolivia and Ecuador has an important

indigenous facet.

Declining assistance?

Despite these facts, international

interest in Latin America has declined

in recent years. For example,

according to its Latin America

Regional Assistance Plan 2004-2007,

the UK Department for International

Development is focusing its ‘main

fi nancial contribution’ of about £300

million for 2004/5-2006/7 through

multilateral agencies. Bilateral

funding for Latin America in 2005/6,

including on-going country specifi c

activities, is estimated at £11 million3.

These sums approximate to £1.30

(multilateral aid) and £0.09 (bilateral

aid) per head per annum for the

population of 132 million living on

less than $2 per day. Taking the

latest UN data of 222 million poor

would reduce these per capita aid

expenditures even further (ECLAC,

2005). Moreover, the UK Foreign

and Commonwealth Offi ce has

undertaken a global reorganisation

refl ecting ‘changing demands

and challenges, and the need to

better align our resources with our

For reasons of

equity, policy makers in the EU and elsewhere, international donors and the smaller agencies need to regain and retain a broad view of the poverty reduction agenda…inequality matters.

47EuroChoices 4(3) ★



Further Reading ■ Besley, T. and Burgess R. (2003). Halving Global Poverty. Journal of

Economic Perspectives 17(3): 3-22.

■ ECLAC (2005). Objetivos de desarrollo del Milenio: una mirada desde

América Latina y el Caribe. Santiago, Chile. United Nations Economic Commission for Latin America and the Caribbean (ECLAC/CEPAL): 335.

■ Economist (2005). New Thinking About An Old Problem: Poverty In Latin

America. September 17. pp. 57-60.

■ Economist (2005). A Thin Red Line. May 21. p 59.

■ Inter-American Development Bank (2004). Strategic Framework for

Indigenous Development. Available from http://www.iadb.org/sds/IND/site_401_e.htm. Washington, DC.

■ Poole, N. D. (2004). Perennialism And Poverty Reduction: Knowledge Strategies For Tree And Forest Products. Development Policy Review 22(1): 49-74.

■ Poole, N. D. (2005). Making Markets Work For The Rural Poor (Hacer

funcionar los mercados a benefi cio de los pobres rurales). Invited paper, international conference, Reducción de la Pobreza en Centroamérica: Fortalecimiento de Servicios Técnicos, Empresariales y Financieros, 11-13 April. Turrialba, Costa Rica, CATIE (Centro Agronómico Tropical de Investigación y Enseñanza).

Nigel Poole

Centre for Environmental Policy, Imperial College London - Wye Campus,

UK

Email: [email protected]

priorities…’, and so the Embassy in

Paraguay closed to the public on 30

April 2005 and UK staff left by the end

of June. Other European countries

appear to be considering similar

withdrawals.

At a time when the focus of attention

is elsewhere, it is important that Latin

America should not fall off the poverty

map: levels of poverty in LA countries,

for example, Nicaragua, are not far

removed from the levels observed in

some of the poorest SSA countries.

Such poverty is of extra signifi cance

because of the inequality with which it

is associated, and particularly because

of the disproportionately high ethnic

representation among the poorest.

Innovative forms of targeting

cash transfers to the poorest are

apparently proving to be an effective

means of poverty alleviation in

the richer LA countries with more

robust governance, such as Brazil

and Mexico (Economist, 2005). In

weaker countries such solutions

are less feasible. For many reasons

– geographic, cultural, social,

demographic - such poverty is highly

intractable, and extreme caution is

needed about espousing economic

growth and market solutions for

poverty reduction among the remote

and marginalized peoples. Social

disintegration is a consequence as

likely as economic integration into the

global markets (Poole, 2004; 2005).

Retaining a broad and radical view of the poverty agenda

For the reduction of long-term

poverty, radical solutions for the

building of social capital – health,

education, gender equality – will

probably have to be accompanied

by more radical redistribution of

productive assets, such as land, and

targeted investments in physical

infrastructure. What is most likely is

that the current international efforts

to halve between 1990 and 2015 the

proportion of people whose income

falls below the one-dollar-a-day

threshold are unlikely to touch many

of the very poor of Latin America,

especially in the poorest countries

of the region: Bolivia, Guatemala,

Guyana, Haiti, Honduras, Nicaragua,

Paraguay and Suriname (ECLAC,

2005). As the more favoured areas

develop and the easier targets are

met, then the poor marginalized

peoples in Latin America – and other

regions where development is found

to increase inequality – will become

more obvious. For reasons of equity,

therefore, policy makers in the EU

and elsewhere, international donors

and the smaller agencies that follow

the trends need to regain and retain

a broad view of the poverty reduction

agenda, and stretch higher to reach

the more diffi cult targets. However

poverty reduction proceeds in other

regions of the world, more targets will

be needed in LA after 2015.

Notes

1 http://www.un.org/millenniumgoals/

2 This will be refl ected in the subject

matter of the World Development

Report 2006. See http://www.worldbank.

org/wdr2006.

3 http://www.dfi d.gov.uk/pubs/fi les/

raplatinamerica.pdf



summary

point de vue

point de vue

★© The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2005

During 2005 the international policy agenda, including that of the EU,

has come to include the fi ght against global poverty. The Millennium Development Goals (MDGs) have catalysed the interest of policy makers, public and media in poverty reduction, partly because of the simplicity and ease of communication of the ‘one-dollar-a-day’ income target for poverty reduction. However, there is more to poverty reduction than reaching the one-dollar-a-day threshold: other MDG indicators which matter are the poverty gap ratio and the share of the poorest 20 per cent in national consumption - because they are indicators not just of poverty but of inequality. Of the major regions of the world, inequality is greatest in Latin America. At a time when the focus of attention is on poverty reduction in Africa and Asia, it is important that Latin America should not fall off the poverty map. The high levels of inequality associated with Latin American poverty are politically and socially divisive, particularly because of the disproportionately high ethnic representation among the poorest. Because of the geographic, cultural, social, demographic context, such poverty is highly intractable. For reasons of equity, therefore, EU researchers and policymakers need to retain a broad view of the poverty-reduction agenda.

Armut, Ungleichheit und ethnische Merkmale: eine Anmerkung zu Lateinamerika für Politikakteure

Poverty, Inequality And Ethnicity: A Note to Policy Makers on Latin America

Au cours de l’année 2005, en Union européenne comme ailleurs,

la lutte contre la pauvreté s’est trouvée inscrite à l’ordre du jour de la politique internationale. Les objectifs du « millénaire pour le développement » (OMD) ont catalysé l’intérêt des décideurs, des média et du public pour la réduction de la pauvreté, en partie grâce à la simplicité du slogan qui fi xe à « un dollar par jour » l’objectif de revenu minimum à atteindre. Pourtant, la réduction de la pauvreté ne peut se limiter à passer ce seuil de un dollar par jour . D’autres indicateurs de l’OMD tout aussi importants à considérer sont l’écart moyen au seuil de pauvreté, et la part des 20 per cent les plus pauvres dans la dépense nationale, parce qu’il ne s’agit pas là seulement d’indicateurs de pauvreté, mais aussi d’inégalité. L’Amérique latine, de toutes les régions du globe, est celle où l’inégalité est la plus grande. A l’heure où la réduction de la pauvreté se focalise sur l’Afrique et l’Asie, il ne faudrait donc pas que l’Amérique latine sorte de l’épure. Les divisions politiques et sociales qui résultent des énormes inégalités associées à la pauvreté en Amérique latine tiennent en particulier aux déséquilibres ethniques que l’on observe dans les catégories les plus pauvres. Dans un tel contexte géographique, culturel, social et démographique, la pauvreté est complètement insoluble. C’est donc sur la base de l’équité que les chercheurs et les décideurs européens doivent défi nir une vision élargie de l’impératif de réduction de la pauvreté.

Im Jahre 2005 ist der Kampf gegen die weltweite Armut in die

internationale Politikagenda ⎯ auch in die der EU ⎯ aufgenommen worden. Die Millenniumsentwicklungsziele (Millennium Development Goals, MDG) haben das Interesse der Politikakteure, der Öffentlichkeit und der Medien auf die Armutsbekämpfung gerichtet; dies liegt zum Teil an der unkomplizierten Kommunikation des Einkommensziels von einem US-Dollar am Tag zur Armutsbekämpfung. Zur Bekämpfung der Armut ist jedoch weit mehr erforderlich als das Überschreiten des Schwellenwertes von einem US-Dollar am Tag: Weitere bedeutende MDG-Indikatoren sind die Armutslücke (Häufi gkeit und Tiefe der Armut) und der Anteil der ärmsten 20 Prozent der Bevölkerung am nationalen Verbrauch, da es sich bei diesen nicht nur um Indikatoren für Armut, sondern ebenfalls um Indikatoren für Ungleichheit handelt. Ungleichheit ist vor allen anderen Regionen der Welt in Lateinamerika am weitesten verbreitet. In einer Zeit, wo die Armutsbekämpfung in Afrika und Asien im Mittelpunkt steht, darf Lateinamerika nicht in Vergessenheit geraten. Das hohe Maß an Ungleichheit, welches mit der Armut in Lateinamerika einher geht, schafft politische und soziale Uneinigkeit, insbesondere weil die Ureinwohner unverhältnismäßig stark unter den Ärmsten vertreten sind. Eine solche Armut ist auf Grund des geografi schen, kulturellen, sozialen und demografi schen Zusammenhangs sehr hartnäckig. Daher müssen Forscher und Politikakteure aus der EU aus Gründen der Fairness einen umfassenden Blick auf die Agenda zur Armutsbekämpfung beibehalten.

Pauvreté, inégalité et appartenance ethnique: note pour les décideurs sur l’Amérique latine

49EuroChoices 4(3)


poverty, inequality and ethnicity: a note to policy makers on latin america

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