Left behind: chronic poverty in Latin America and the Caribbean - overview

Left behind: chronic poverty in Latin America and the Caribbean - overview By most measures, the 2000s were one of the most impressive decades for economic development in Latin America and the Caribbean (LAC). With the exception of 2009, the region s gross domestic product per capita grew consistently at an average rate of 2.5 percent between 2000 and 2012. During the same period, and despite being one of the most unequal regions in the world, inequalities reduced substantially. The regional Gini coefficient for per capita income, for instance, decreased by an unprecedented five percentage points, from 0.57 in 2000 to 0.52 in 2012. Sustained economic growth, joint with substantial reductions in income inequality, led to remarkable increases in the incomes of those at the bottom of the income distribution. Accordingly, poverty in LAC decreased by more than 16 percentage points within a single decade, from 41.6 percent in 2003 to 25.3 percent in 2012. Furthermore, extreme poverty was cut in half, from 24.5 percent to 12.3 percent. Overall, a remarkable 70 million people moved out of poverty: the strongest poverty reduction performance of the region in decades. In spite of these dramatic advances, one in four Latin Americans today remains poor. Those who experience shocks that cause them to fall temporarily into poverty are considered to be the transitory poor . However, many people are born into poverty and never escape their poverty status: these are the chronic poor . The chronic poor have not benefitted much from the impressive growth rates of the 2000 s and may have fallen into the cracks of the social assistance system; they have been left behind. Furthermore, the prospects of them escaping poverty in the near future are weak. GDP growth has slowed significantly, from about six percent in 2010 to an estimated 0.8 percent in 2014. As a result, improved labor market prospects may not prove to be sufficient for the chronic poor to escape poverty.