Enabling poor rural people
to overcome poverty
On the whole, the 33 countries in Latin America and the Caribbean showed higher resilience during and after the 2008-2009 global financial crisis than other regions of the developing or developed world. This resilience stems from a combination of factors. Sustained efforts to maintain macroeconomic stability and achieve some fiscal discipline, even in times of crisis, have made a positive difference. So have efforts to take advantage of the rising prices of many of the region’s export commodities in order to underpin economic growth.
Such efforts have enabled countries in the region to implement countercyclical economic policies to differing degrees. In addition, the region has seen a positive trend in poverty reduction and modest improvements in inequality.
However, the financial crisis did adversely affect economic growth and employment levels across the region. After a mild economic downturn in 2009 equivalent to 1.6 per cent of the region´s GDP, the Latin American economy grew, on average, 5.3 per cent in the 2010-2011 period. It is expected to grow around 3.9 per cent annually over the next five years – subject to the effects of the crisis in Europe and of China’s economic slowdown.
Rural poverty in the region
The total population of Latin America and the Caribbean is about 595 million, of whom 20.5 per cent live in rural areas. With the exception of Haiti, the nations of the region have attained middle-income status, averaging per capita income of more than US$ 5,000.
In countries for which data are available, poverty rates fell from 48.4 per cent in 1990 to 31.4 per cent in 2010. Extreme poverty rates fell from 22.6 per cent to 12.3 per cent over the same period. But even though urban and rural areas both witnessed poverty reduction, the gap between rural and urban populations is still wide. In 2010, the rural poverty rate was twice as high as that of urban areas, and four times as high in terms of extreme poverty.
In fact, as a region, Latin America and the Caribbean leads the world in income inequality, with an overall Gini coefficient (a statistical measure of inequality) of around 0.52. Yet recent evidence shows that some countries have been successful in addressing the issue and reducing income inequality. Two factors account for this success: a fall in the earnings gap between skilled and low-skilled workers; and an increase in pro-poor policies and social protection programmes, such as conditional cash transfers.
Nevertheless, the region needs to continue its efforts toward achieving more equity and higher levels of fiscal sustainability. It must also keep working to address that impact of recurrent natural disasters, which hit hardest among the most vulnerable social groups, such as landless farmers, indigenous peoples, women and children.
Eradicating rural poverty in the region
As countries urbanize and offer more jobs off the farm, improving poor rural people’s access to markets and strengthening the value chains that link producers to buyers are becoming important tools for rural poverty reduction. Hence, one quarter of IFAD’s portfolio of projects and programmes in Latin America and the Caribbean is dedicated to developing markets and rural enterprises.
Other areas of intervention focus on meeting basic human needs, supporting social inclusion, strengthening south-south cooperation and strengthening environmental sustainability in the region.
Countries in Latin America and the Caribbean