POVERTY IN LATIN-AMERICA - BACK TO THE ABYSS

This article will 1) review recent trends in poverty in Latin America and 2) assess the prospects for further alleviation of poverty should the region's economic growth continue to ebb. It will be argued that the region must place more emphasis on its redistributive policies if the progress in reducing poverty that had already been made is to be sustained throughout the rest of the decade. Such policies (including, but not confined to, spending on education) can be most productive because they offer the prospect of engaging the Latin American economies in a virtuous cycle: one in which greater social equality (or less inequality) serves as a stimulus to that growth needed to make further reductions in poverty possible. The article summarizes data on changes in the extent and structure of Latin American poverty since the debt crisis began in the early 1980s, discusses gains made in the early 1990s, and reviews the impact of recession on the poor. It also distinguishes between those who are likely to become poor in a recession and those who face long term extreme poverty. It outlines the limited role that redistributive policies played in contributing to the decline in poverty observed in the 1990s, and reviews the changes in intellectual thinking that have been taking place in this area - away from supporting the claim that developing countries must inevitably face a tradeoff between inequality and growth, and toward arguments in support of a more equitable distribution of income. The final section discusses the dilemmas that now confront regimes who are trying to devise policies that advance growth on the one hand, while simultaneously trying to ensure that the benefits derived from economic development are distributed more widely across the population. -from Author