TACKLING DEVELOPMENT ISSUES IN LATIN AMERICA

LIMITLESS POTENTIAL | LIMITLESS AMBITION | LIMITLESS IMPACT

According to the United Nations Population Division, Latin America is the most urbanised

continent in the world. The population living in cities in the region is expected to reach 86%

by 2030. However, recent studies highlight that the region is also the most unequal in the

world. The wage gap by decile is on average 34 time lower for those at the bottom level,

compared to those in the highest (as a comparison, that of the G7 countries is 17). Statistics

are alarming, showing the wage gap in Colombia at 49 times, followed by Brazil at 48.8 and

Argentina at 40.8.

To add to this problem, uncontrolled urban growth and investment in Latin America is exac-

erbating not closing social inequality. The key issues are the informal economy and security

of employment. According to the International Labour Organisation, the region currently has

47.7 % of the population in informal jobs. This represents 127 million people with no job secu-

rity and no access to health and social benefits. In economic terms, this means that growth

is not driven by productivity (as expected in a country where most of the informal workers

have been absorbed) but by external global trends.

In Latin America this means exporting commodities and China and Asia in general are

the main consumers. Meanwhile, China and Asia are growing in productivity, meaning not

just commodities but technology and skills. In the long term, this is more beneficial for an

economy. Therefore, in the global scheme, Latin America is falling behind. Furthermore, the

region is undermining its environmental wealth and rural communities with predatory mining

practices and weak legislation.

Since the minimum income level is not guaranteed to nearly 50% of the population, their par-

ticipation in the benefits of the market are limited. They have little access to skills and education

to gain access to more qualified jobs. Included in this list of barriers to improvement is access to

property. Due to the gap in income distribution, spatial inequality emerges as those with no job

security cannot afford to buy/rent property and settle in informal developments.

The University of Reading has been working in South America to establish a research group that gathers academics from the University of Sao Paulo, University of Buenos Aires, Javeriana University (Colombia) and the University of Panama. We then work directly with local governments and professional organisations to tackle economic, environmental and social issues.

Aggravating these conditions is a heavily bureaucratic and politicised urban planning system that

pays little attention to air quality and environmental concerns. As a consequence most of the

population is vulnerable to air pollution. According to the Pan American Health organisation 100

million people in Latin American cities are exposed to levels of pollution that exceed the recom-

mended standards. In addition, the World Health Organisation reports that air pollution in Latin

America is responsible for 35,000 annual premature deaths. The World Bank maintains that the

most important factors causing poor air quality in the region are inadequate land usage and lack

of transport planning. Examples of cities that are successfully tackling this problem in terms of

transport are Curitiba (Brazil) and Medellin (Colombia). Still much more needs to be done.

The lack of public transport and shortage of housing is mainly due to inadequate systems of land

value capture distribution. Developers are requested to contribute little to the infrastructure and

the system relies mainly on inefficient public spending models. In countries like Argentina, for

example, development of housing is focused on the middle income sector and the State has to

provide urban infrastructure and social housing. When the State does not have sufficient funds,

the infrastructure in a mega city such as Buenos Aires starts to collapse. A rail accident in 2012

left 51 deaths and 700 injured. The same railway line had another fatal accident in 2013. Both acci-

dents were due to poor system maintenance.

In order to tackle these issues, the University of Reading has been working in the region to estab-

lish a research group which today gathers academics from the University of Sao Paulo, University

of Buenos Aires, Javeriana University (Colombia) and the University of Panama. These academics

engage directly with local governments, professional organisations and practitioners in a series

of seminars. Together they will share experiences and propose new policy to tackle economic,

environmental and social issues in the areas of real estate, urban planning, construction and

community engagement.

THE ISSUES:• 127 million people in South America

have no job security, no access to health

and social benefits, meaning growth is

not driven by productivity.

• The minimum income level is not

guaranteed to nearly 50% of the

population in South America, therefore

their participation in the benefits of the

market are limited.

• Air pollution in Latin America is

responsible for 35,000 annual

premature deaths in the area. Better

land use and transport planning can help

to reduce deaths.

• A rail accident in Buenos Aires in 2012

left 51 deaths and 700 injured. This

accident could have been avoided with

better system maintenance.

B10140 03/14

For more information, please contact:

Dr Claudia Murray

School of Real Estate and Planning, University of Reading

c.b.murray@reading.ac.uk