COVID-19 widens gap between extreme wealth and extreme poverty

— Regional Human Development report finds

LATIN AMERICA and the Caribbean (LAC) is a region where wealth and prosperity co-exist with pockets of extreme poverty, backwardness, and vulnerability. This is according to the 2021 Regional Human Development Report which argues that the region is “caught in a trap of high inequality and low growth,” where concentration of power, violence, and inefficient social protection policies fuel a vicious circle and limit human development.
The report, which analyses “the trap” that hinders achievement of the 2030 Agenda and its Sustainable Development Goals (SDGs), was prepared by the United Nations Development Programme (UNDP) and was launched virtually on Monday.

It indicated that “despite the progress of recent decades, countries in Latin America and the Caribbean, including Guyana, are more unequal than countries in other regions with similar levels of development, and their social indicators are still below those expected for their average income level.”
“While the 105 billionaires in LAC have a combined net worth of US$446.9 billion, two people in 10 in LAC still do not have enough food to eat. While some inherit property and networks and attend prestigious universities, others struggle in the labour markets with a precarious education. While some own thousands of hectares of land, millions remain landless and homeless. The list of contrasts is long and well known in the region,” the report posited.

According to its outline, the report explores critical factors that underlie the mutual reproduction of high inequality and low growth: concentration of power, violence in all its forms -political, criminal and social, and poorly functioning social protection policies.
The document points specifically to the fact that concentration of power in the hands of a few who defend their private interests is one of the factors that connect high inequality with low growth. Through its political influence, the misuse of power tends to distort public policies and weaken institutions.

“One example explored in the report is the role of economic elites in blocking fiscal reforms that would support a more progressive form of redistribution. To balance the distribution of power, UNDP suggests exploring lines of action such as lobbying regulation and financing of political campaigns,” a press release from UNDP Guyana noted.
It is a common belief that the financing of political parties without transparency and accountability can lead to corruption.


As Guyana remains on the cusp of transformation, the People’s Progressive Party/Civic (PPP/C) government had recommitted to ratifying comprehensive campaign finance laws.
Meanwhile, the UNDP report also pointed to the prevalence of various forms of violence, and the need for greater equality among the people of the region. Some of the lines of action proposed in the document include the strengthening of local justice systems and the expansion of mental health care for victims of violence.
The report also looks at the fragility of the region’s social protection systems, evidenced by their limited response capacity during the pandemic. “The linking of risk insurance systems with formal employment has motivated governments to create parallel systems, of lower quality, to cover the people who are excluded, who are the majority in the region.”

Further, the report indicated that countries in Latin America and the Caribbean have segmented labour markets and social protection systems that reproduce inequalities and encourage the organisation of production in very small and unproductive businesses. To tackle this issue, the document suggested the “rethinking of social protection to ensure universality”.

Finally, the report recommends that the solutions undertaken must lead to greater growth with environmental sustainability, and to greater inclusion and social mobility. “These solutions require balancing power by defining rules and policies, eradicating violence in all its forms and redefining the institutional environment that constitutes the essence of the social contract: opportunities in the labour market, taxation and social protection,” the UNDP press statement noted.

Assistant Administrator and UNDP’s Regional Director for Latin America and the Caribbean, Luis Felipe López Calva, said that the report calls on Latin Americans to understand the connection between the aforementioned factors, and “highlights an entry point that can serve to break free from low growth and high inequality: the implementation of universal social protection systems that are redistributive, fiscally sustainable, and more favourable to growth”.

This fourth Human Development Report for Latin America and the Caribbean is an independent editorial publication commissioned by UNDP. The report was prepared with the financial support of the Spanish Agency for International Development Cooperation (AECID) and the Andalusian Agency for International Development Cooperation.


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