Advances in poverty (Cielo Vasquez)

ADVANCES ABOUT POVERTY IN LATIN AMERICA

Advances in poverty reduction in Latin America over the last decade and a half have been remarkable. With a $4 a day poverty line, the region’s population living in poverty fell from 45 to 25 percent between 2000 and 2014; and with a stricter poverty line—$2.5 per day—from 28 to 14 percent. Three more facts show the depth of this improvement. First, with some variation, poverty fell in every country in the region; second, poverty did not increase between 2008 and 2010, the critical years of the global financial crisis; and third, despite a substantial deceleration in the region’s growth rate since 2011, poverty has not increased either.

But growth is not all. As mentioned, as of 2011 growth has decelerated; in fact, since then each year’s growth rate has been lower than the previous year, and in 2015 was negative (with a similar result expected in 2016). The second part of the story is associated with improved public policies. In particular, starting in the late 1990s, governments have transformed all sorts of targeted and generalized consumption subsidies into monetary transfers to the poor conditional upon investments in their human capital; an approach that Latin America pioneered. Multiple evaluations have shown that these new programs, generally known as conditional cash transfers (CCTs), have made a considerable difference in the lives of the poor. J