Poverty, Inequality & the Millennium Development Goals

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Prepared at the request of the Colombian Government for the Sixth Summit of the Americas.

Poverty and inequality have dropped sharply in most of Latin America and the Caribbean in the past decade. Citizens of the region today have far better access to education, health care and basic infrastructure, and nutrition and health indicators have improved markedly. The region is on track to fulfill most targets of the Millennium Development Goals.

Progress, however, is not uniform across the region. Some countries are clearly lagging, and the targets will probably not be met. Extreme poverty is still very high in many places and Latin America remains the most unequal region in the world. Latin American children, by and large, are poorly educated and many never reach secondary school. Little progress has been made in curbing maternal mortality, which is far too high for the region’s level of development. While public spending is increasingly directed to the poor, income remains concentrated. Taxes and transfers do little to distribute income.

This study is not an exhaustive analysis of the social development agenda. Instead, it focuses on a few key items that require special attention.  Five main recommendations emerge:

1. Implement policies to serve those excluded from existing social protection systems, including especially poor people who are currently excluded from benefits, young people at risk, and those impoverished by adverse shocks.
2. Increase opportunity for all groups, regardless of socioeconomic status, ethnic background, age or gender, particularly by ensuring access to quality education through secondary school.
3. Reduce maternal mortality and other preventable deaths.
4. Make taxes and transfers more redistributive. Above all, use public spending to reduce extreme poverty as much as possible, tax the income and wealth of rich individuals, and eliminate expenditures that worsen income distribution.
5. Improve bases of information to assess effectiveness of public policies in reducing poverty and inequality.

Two types of initiatives which would benefit from regional cooperation:

1. Improve information and monitoring of social development progress and public policies: Redirect the MECOVI program (Improvement of Living Conditions Surveys in Latin America and the Caribbean) towards its original role to ensure that all countries in the region have high quality nation-wide income-expenditure surveys and share this information with poverty and inequality analyst and researchers in international organizations and academic centers.
2. Strengthen networks to share information: The previous summit established the Inter-American Social Protection Network (IASPN). The network still must identify: i. best practices in technical operation; ii. ways to achieve political consensus on redistributive initiatives, and iii. new tools to address special challenges (such as rising food prices or the exclusion of youth from school and jobs). The scope of the IASPN’s action, then, must link the technical areas of relevant decision makers to academic entities that evaluate public policies and the political economy dynamics that shape them.

Download the complete report below.