CAF: Economic progress is not enough to eradicate the roots of inequality in Latin America

Development Bank of Latin America-CAF said in a report released on Monday that the reproduction inequality in latin america and the Caribbean is growing and remaining above other regions, affecting social mobility and jeopardizing the growth and political and institutional stability of countries.

These are, among others, topics covered in the Economics and Development Report (RED2022). “Inherited Inequality: The Role of Skills, Employment, and Wealth in the Opportunities of New Generations”.

The study shows in numbers how these inequalities persist and are passed down from generation to generation, noting that in the region, “the richest 10% own 55% of income and 77% of wealth, (while) the poorest 50% collect 10% of income and only 1% of wealth.”

Thus, lack of opportunities for human capital formation, good jobs in labor markets and asset accumulation, as well as unequal financial inclusion “are key factors in the intergenerational linkage of inequality,” the analysis notes.

“For decades, centuries, one of the most unequal regions of the world Latin Americaand this continues despite the economic and social progress of the last 20 years, but this is not enough to address the deep roots of inequality in our region,” said the president of RED2022 at the opening CAFColombian Sergio Diaz-Granados.

The CAF chief pointed out that the figures for this disparity indicate that “a small part of our population manages to retain much of the wealth generated by the region, and this disparity, of course, also extends to the educational and employment opportunities of Hispanics. and the Caribbean.”

INEQUALITY IN NUMBERS

He added that these figures are encountered every day in the most “gross” forms imaginable: “millions of children and young people living in the most backward areas of big cities, in favelas, slums or in areas that seem remote due to lack of infrastructure and the most necessary services for life”.

Diaz-Granados explained that this meant that in Latin America there are “161 million people, i.e. 2.5 out of 10, without access to drinking water, or even more, 431 million people, 7 out of 10, without access to sanitation”.

“Low social mobility is a serious problem for Latin America and the Caribbean. And this is not only because of its implications for equity, but also because of its impact on other major components of economic development, such as growth and political-institutional stability,” said Dolores de la Mata, report co-author and lead economist. , Department of Socio-Economic Research CAF.

SUGGESTIONS TO DEVELOP SOCIAL MOBILITY

Economics and Development Report CAF It says focusing on population groups such as people of African descent, indigenous peoples, women in the most vulnerable and those living in segregated areas can help improve opportunities for occupational mobility and income.

It also recommends that attention be paid to measures that are not generally seen as promoting social mobility, such as improved public transport, which could potentially bring quality work opportunities closer to populations living in disadvantaged areas and far from productive centers.

The proposals point out that achieving greater social mobility in the region is in the hands of multiple actors from both the public and private sectors, and they face the challenge of building the necessary consensus to “expand redistributive policies that break intergenerational ties of inequality.”

(EFE)