Poverty and inequality in latin america By Victoria Matviiv

population is a portion of the population not making enough monthly income to meet basic needs such as food, health care, education, and shelter.  Poverty is culturally & socially constructed.  Poverty may be experienced as relative deprivation.  Gender, ethnicity, & race are important contributing factors of poverty.

Latin American  One-third of Latin Americans live in poverty, with 15% in extreme poverty.  5% chronic poverty is multidimensional deprivation  The poor experience an extremely low standard of living, involving inadequate housing, poor health care facilities, unsanitary H2O treatment, limited education opportunities, high unemployment, & limited access to utilities.  Due to rapid urbanization. Urbanization is proportion of total population or area in cities or towns, or the term can describe the increase of this proportion over time.

Inequality  Driven by the allocation of endowments & by the distribution of natural resources & human capital society.  Is primarily caused by policies.  Promotes bad institutions, weak redistributive policies, & low capital investment.  Increases because the poor have not benefited from growth as much as the rich.  Brazil, Honduras, and Guatemala take the unfortunate lead.

Woman and Poverty  Woman in Latin America have a greater chance of being poor than men, primarily due to the fact that they are segregated in low-income jobs, earning on average 14-53% less than men do.  Low-income girls are particularly limited in full labor force participation due to high rates of adolescent pregnancy & domestic responsibilities.

Income Measures of Poverty`  POVERTY LINE  HEADCOUNT RATIO  MODERATE POVERTY  INCOME GAP  NEW MEASURES

Integrating growth & equity  Its strategies must be at once hard-heated, making tough distinctions in a tough budgetary environment between what is essential & what is desirable.  ECLAC (economic commission for Latin American and the Caribbean) – is focusing on the positive synergies between human capital investment, economic growth, & improvements in income distribution & standards of living.

To understand the life quality  Measure the degree of income inequality using Gini coefficient - measures the difference between a hypothetical population with all income divided equally & actual distribution in an economy. Gini = a / (a+b)  Because the society is not equal, Lorenz curve measures the actual distribution Lorenz Curves & Gini Coefficient % of income % of households

FOR POVERTY REDUCTION  MDGs (millennium development goals) – for public investment in social sectors to address market failure.  Microenterprise lending – provide soft loans to the region’s poor.  Corporate social responsibility – only truly sustainable businesses in the long run are those that invest in their people and communities.  CHANGE IN INSTITUTIONS – short & long term measures like scholarships & compensations to make them clients rather than recipients.

Pro-Poor Policy Changes  Rule-based, transparent fiscal discipline.  Smooth booms & busts  Build automatic social safety nets  Education for the poor, too  Tax the rich & spend more on the rest  Give small business a chance  Protect worker’s right  Deal openly with discrimination  Repair land markets  Infrastructure delivery for the poor  Reduce rich-country protectionism

CONCLUSION  Why Pursue Poverty-Reducing Policies ?  Is a challenge driven by both ethics & efficiency.  Because poor are systematically excluded from working toward a better life.  Poverty in Latin America can materially affect everyone through unsustainable environmental practices, illegal migration, & the export of violence & political dissatisfaction.  Latin America is linked by globalized trade, travel,& culture that effect the whole world.

THE END

My answers to questions  Microfinance – organizations allow the poor to convert small savings over time into the needed lump sums for investment as well as insurance against shocks.  Gini Coefficient – a measure or income inequality that gauges the difference between a hypothetical society where income is perfectly equal and the actual income distribution. When it increases it goes from perfect to inequality