So why does Latin America remain the most unequal region in the world?
I think much of this is rooted in a powerful historical structure inherited from the colonial era. But today, the World Bank talks about the 2000s as being a decade of inequality reduction, due to social and redistributive policies. We had the economic boom, and economies grew, but nevertheless, this broad structure of inequality – class and racial inequalities inherited form the colonial period – remains. Through processes of industrialization, and the regions' entry into global markets, new opportunities have emerged in the private and public sector, but it has also created large, exclusionary informal markets formed around these inequalities. And while they change over time, they remain powerful, persistent inequalities.
It also bears emphasis that when we talk about Latin America, we’re talking about a very different reality in terms of inequality. It’s not homogenous across the region. Every single country has a different historical structure, and different political histories that have produced different patterns and levels of inequality.
We can see these historical legacies in at least two ways. Firstly, Latin American societies emerged with strong elites, or oligarchies, whose power has historically been challenged, but never truly eliminated. As a consequence patterns of class inequality and structures of labour and production have changed, but are still present in forms of social exclusion. For example, the plantation economies may have disappeared, but they have transformed into informal economies of exclusion, or migration. Secondly, there are racial inequalities that are pervasive in the region, which again have changed but were never eliminated. The only real example of real change with racial inequality is Bolivia.
How could the region's apparent shift away from Left leaning populism affect inequality reduction?
I think you could challenge that there really is a shift away from Left-leaning populism. Brazil has experienced a soft coup, but it was never considered as Left-leaning populism. In Argentina, perhaps it’s true, but elsewhere, in Ecuador and Bolivia, I’m not sure, and Venezuela is a case of its own. You could say that populism in Latin America has always been associated with inclusive and redistributive policies, and so by moving away from Left-leaning populism, it doesn’t bode well for inequality reduction.
I think when you look at the commodity boom, you see the economic growth in the region which always leads to some kind of inequality reduction through an increase of opportunity. And it’s true that the Left leaning governments in the area - the populist version in Argentina, or the non-populist version in Brazil, and in Uruguay, Bolivia – they did develop policies specifically aimed at reducing inequality. And so when these governments leave the stage, it does mean that those policy objectives won’t be there any more.
What should every policy-maker have at the front of their mind when working to reduce inequality in Latin America as a region?
Well, there are of course are some policies that have proven to reduce inequality, such as conditional cash transfers, or increasing access to education. But to target economic growth, as a policy, is tricky because what we saw in the years of significant economic growth and industrialization was the creation of both opportunities and informal economies. The latter translated into forms of exclusion, and so if you’re targeting economic growth, this has to be inclusive growth. This is complicated, but it is linked to labour rights, social rights, expanding access to education, access to health – with social policies that are designed to address inequality.
Take for example the Kirchner years in Argentina who saw creating jobs, not developing social policies, as the solution. But halfway through, they realized that there weren’t enough jobs to address questions of social exclusion. And so, only then, they developed the Asignación Universal por Hijo, a very effective cash transfer policy which, despite not transferring much, contributed to inequality reduction.
But you need both. Again, in Argentina, the policies were about strengthening labour unions, and collective bargaining, but that was not enough, so the Kirchners also developed specific policies for the informal labour force. Now, that was possible in Argentina because of a large formal sector and strong unions, but elsewhere it’s different. In Brazil, for example, it was about the minimum wage, job creation, the Bolsa Familia, conditional cash transfers, a real combination of policies. So every country has its variations. But the problem is that you need to address both the formal and informal labour forces. In the latter, it is about creating specific transfer policies, public services, policies like the Solidarity Economy – which I’m currently working on – that promote associationism, cooperativism, the economic activities of the poor, creating opportunities for gainful forms of making a living.
The region is one of the most violent and it's also one of the most unequal. Is there a link?
Yes, but it’s a complex one, because maybe inequality and violence are both consequences of the same pattern in society – rather than one causing the other.
There are many types of violence that have existed for many years, which are still present in the form of police violence, but you also have bigger types of violence relating to the drug trade. These are all related to inequality, or rather a perverse structure of opportunities in society. The lack of formal opportunities to make a living sits alongside the presence of very powerful incentives to enter into very lucrative, dangerous and very violent forms of economic activity – which are also related to the international war on drugs.
But then you also have other forms of violence, like in El Salvador, Guatemala, these places that have experienced war, that now offer no opportunities to those who were trained in violence. So yes, it’s related to inequality, but it’s an inequality of opportunity, which again links to the entrance of the region into the global market and also the involvement of the US in the region.
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