Poor progress

Last year should have been a good one for Latin America’s poor; the region’s economies grew by 5.8 per cent. Yet outside Chile, Latin America’s high growth rate is not cause for rejoicing. In places with relatively egalitarian income distribution, growth helps everyone. But in unequal countries, where the poor get only a few cents out of every new dollar, growth bypasses the poorest. Latin America is the world’s most unequal region.

Most countries in Latin America are growing not because they have improved productivity, but because of the rise in the price of oil and other commodities, quick booms that lend themselves to quick busts.

Many countries also are carrying debt loads far above what is considered sustainable. For three very poor countries, Honduras, Nicaragua and Bolivia, the international banks and their members are reducing debt, although not enough. But there is no help in sight for other heavily indebted ones. Latin American nations also typically take in far too little in taxes. To reduce poverty with what they do have, Latin American countries would do well to follow the model set by Chile, which has cut poverty by 65 per cent since 1990 by carefully targeting its spending. Such targeted help can make a difference. Such programmes could help lift millions of people out of poverty. — The New York Times