July 19, 2024

The war in Ukraine and the consequent inflation plunged millions of families in Latin America into poverty, sometimes extreme, as announced by the World Bank and different international organizations.

In the first decade of the 21st century, poverty in Latin America was declining, but this changed with the start of the pandemic. An analysis on the World Day for the Eradication of Poverty.

These are worrying numbers. “Right now we are seeing the highest poverty figures in the last 27 years,” says Christof Wünsch, director of the Latin American department of the German aid organization “Brot für die Welt” (Bread for the world).

“What we observe, and also what our partners on the continent share with us, is that the situation is really dramatic and that, unfortunately, the levels of poverty will continue to increase,” says Wünsch in an interview with DW.

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The official figures coincide with the expert’s assessment.

According to a special report by the Economic Commission for Latin America and the Caribbean (ECLAC) presented last June, the countries of the region are facing a slowdown in economic growth.

Added to this is higher inflationary pressure and a slow and incomplete recovery of labor markets from the repercussions of the covid-19 pandemic.

Consequently, the levels of poverty and food insecurity will increase, according to the agency.

The report predicts that the average annual GDP growth in 2022 will be 1.8%, while in 2021 it was still 6.3%.

Regional inflation will increase from 6.6% in 2021 to 8.1% in 2022. Poverty would increase from 29.8% in 2018 to 33.7% in 2022, and extreme poverty from 10.4% in 2018 to 14 .9% this year.

This means an increase in extreme poverty for the sixth consecutive year.

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Triggers of poverty in Latin America

The reasons for the worsening of this crisis are several.

On the one hand, there is the persistence of the COVID-19 pandemic, with its disruptions to the labor market and supply chains.

On the other hand, the war in Ukraine, with the consequent inflation and alterations in the primary production sectors such as oil, gas, aluminum and cereals and other industrial branches that produce inputs needed in agriculture, such as fertilizers.

But this does not explain everything, says Jann Lay of the GIGA Institute in Hamburg.

“The times of high growth rates combined with moderate to strong poverty reduction were already over in Latin America before the crisis,” he noted.

The expert’s forecast is also dark: “The short and medium-term prospects are rather bad, since, on the one hand, growth prospects are not good and, on the other, fundamental inequalities – in access to education , healthcare, social security – they are still big.”

Inequality, extractive activities, authoritarian regimes

For Cristof Wünsch, from the organization “Brot für die Welt”the reduction of inequality is also one of the key points to face poverty.

He sees a “lack of political will to redistribute the wealth that exists on the continent.”

In addition, Wünsch proposes an industrial diversification.

For him, monoculture agriculture and mining activities do not serve as engines of employment. In the end, the benefits end up with the multinational companies, says the expert: “What Latin America really needs is a change from the purely extractive economic model.”

Wünsch also emphasizes the role of NGOs and the difficult situation in many Latin American countries.

“Civil organizations will always have a great role in the fight against poverty. But this work is being restricted in many countries,” she said.

Nicaragua, for example, has already closed some 1,500 NGOs since the political crisis broke out in 2018.


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