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Despite Growth, Latin America Struggles With Chronic Poverty

Despite Growth, Latin America Struggles With Chronic Poverty

Posted by Juan Gavasa on March 11, 2015

Roughly 70 million people in Latin America and the Caribbean managed to earn enough to rise above the poverty line between 2003 and 2012, a period of sustained economic growth that brought prosperity to many corners of the hemisphere and narrowed the region’s inequality gap.

And yet, roughly 130 million people in Latin America and the Caribbean continue to subsist on less than $4 a day, according to a World Bank report released on Monday that calls attention to the staggering level of entrenched poverty in region stymied by an economic slowdown. Put differently, the bank’s research indicates that after the most remarkable period of economic growth in decades, one in every five people in Latin America remains chronically poor. The term refers to people who consistently remain below the poverty line.

Their prospects are dimmer than they have been in years as the region’s economies slow down, according to the report, titled “Left Behind.” Gross domestic product growth in Latin America, which peaked at a healthy six percent in 2010, dove to an estimated 0.8 percent last year, according to the World Bank. Three Central American nations — Nicaragua, Honduras and Guatemala — continue to have chronic poverty rates that are considerably higher than the regional average. Half of Guatemalans and more than 40 percent of Hondurans remain chronically poor.

That fact should inform the debate in Congress over the Obama administration’s request to significantly expand aid to Latin America starting this year. The White House is asking lawmakers to allocate $1 billion for development projects in the region, seeking to address the root causes of unlawful migration to the United States, particularly by unaccompanied minors.

 

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