The underlying story has two parts. First, there is growth. The initial decade of this century was beneficial for Latin America as a result of unusually favorable conditions in international capital markets and high commodity prices. But growth is not all. The second part of the story is associated with improved public policies.
In particular, starting in the late s, governments have transformed all sorts of targeted and generalized consumption subsidies into monetary transfers to the poor conditional upon investments in their human capital; an approach that Latin America pioneered. Multiple evaluations have shown that these new programs, generally known as conditional cash transfers CCTs , have made a considerable difference in the lives of the poor.
Food is more plentiful at the table and families are enjoying more diversified diets, more children and youngsters are attending school particularly girls , and families are periodically receiving basic health services. Today, governments in the region directly transfer between 0. And even though there is considerable heterogeneity across countries in terms of coverage, conditions and generosity of transfers, they are occurring in almost all countries in the region.
Despite these advancements, three shortcomings still need to be addressed. First, in some countries there are significant portions of the poor not being reached by these programs while non-poor groups benefit from them. In principle exclusion errors could be resolved via expanded coverage, but in the tighter fiscal context faced by the region, this is more difficult.
Looking forward, exclusion errors will need to be corrected through the politically more costly route of reducing the number of non-poor households that are currently being covered. Second, these programs have changed the allocation of poor household time, inducing more time to consume health and educational services. However, deeper indicators of human capital accumulation, like learning, show fewer improvements.
In hindsight, it is clear that CCTs stimulated the demand for these services, but that governments failed in parallel to expand supply with appropriate quality, particularly in rural areas. Put differently, distributing money was relatively easy for governments, but it has proven to be significantly more complicated to set strong incentives for quality to mostly public providers of health and educational services in poor localities, and monitor their performance.
As a result, although poor households are consuming more health and educational services than before, they are accumulating less human capital than they could.
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Team or Enterprise Premium FT. This in turn caused a loss of jobs for thousands of employees and a huge economic set-back. The unemployment rate in Brazil remains at a high of Argentina, too, has suffered the economic consequences of a sovereign debt default since It has encountered a decline in GDP and inflation, resulting in recession.
Venezuela is on the verge of defaulting its foreign debt and has encountered a massive decline in its GDP accompanied by inflation. Ever since the economic recession, Venezuelans have been suffering from poverty, high mortality rates, unemployment, lack of medical facilities and hunger.
Large-scale unemployment followed by economic recession , strict government regulations, corruption and other factors have led to the creation of a parallel or informal economy in many of these SA countries. While a certain portion of the money earned is spent directly on the official economy, these underground businesses lead to tax evasion, reduced tax revenue, increased tax rates, lower wages and work hours, corruption and inflation.
The report includes a special chapter on the care economy as a strategic sector for a recovery with equality. To this end, ECLAC urges for moving towards a care society that would allow for guaranteeing an egalitarian and sustainable recovery in Latin America and the Caribbean. Social development Statistics Gender affairs. You might be interested in. Links Complete video of the press conference English translation. Photo album of the launch in Flickr.
Social and labour inclusion.
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