LATIN AMERICA-OUTLOOK: Growth, and Poverty

By Marcela Valente Reprint | | Print |

Marcela Valente and Consuelo Albornoz Tinajero

BUENOS AIRES, Dec 21 1994 (IPS) - Growth, growth, and more growth: in 1994 Latin America experienced rising output and low inflation that created a picture of an emerging economic powerhouse fuelled by investment flows and free trade.

But a dark shadow was cast by another area of growth – in the numbers of people unemployed, and the figures for those on the poverty line.

As the year ended, it became clear that in the new year Latin America will have to make a concerted assault against poverty – or well-laid plans for an economic nirvana could be ruptured by a nightmare of social unrest.

In 1995, the region is likely to see advocates of the economic adjustment blamed for rising poverty suddenly transformed into friends of the poor.

By yearend the United States had joined with the International Monetary Fund (IMF) and governments seasoned in telling populations that adjustment causes hardships, in preaching the benefits of caring for victims.

The case for a change of tack is compelling: poverty plagues 46 percent of Latin America’s people. Women, children, informal sector workers, the elderly, rural inhabitants — these are the vulnerable groups.

In the social dichotomy being created by adjustment – of the few rich set against the many poor – these groups are the human equivalent of a cardboard shanty alongside a mansion with a swimming pool.

“Poverty makes the continent vulnerable and democracies are lame if all sectors of society do not participate on an equal basis in politics and the economy,” said Alexander Watson, the U.S. Assistant Secretary of State for Inter-American Affairs.

“Economic reforms are not enough, social reforms are also necessary,” he told the Argentine press recently.

The U.N. Economic Commission for Latin America and the Caribbean (ECLAC) reports that in 1994 economic growth on the continent reached 3.7 percent, the highest since 1986. And there was widespread success in curbing inflation.

Peru’s Gross Domestic Product (GDP) increased by 11 percent. Guyana grew by eight percent, Argentina six, Colombia, Panama and El Salvador five. Only Haiti, Venezuela and Honduras showed declines.