Who are society’s most vulnerable in Latin America ?
There are, of course, different groups of people, but an important one is the one that includes those who, over the last 10-15 years of rapid growth, have not been able to overcome poverty. Market forces and economic development have boosted millions of people out of poverty in most Latin American countries, but those who have not been so fortunate are very vulnerable.
People lack education, access to markets, and state services – they are also under the control of state competitors, such as gangs, cartels and paramilitaries, and are forced to work in informal sectors, far from the main urban centres. In Colombia, for example, a 2010 ELCA survey found that 80% of those in the lowest quartile were still in the lowest quartile in 2016. Only 17% moved up into the third quartile. So it’s this population who are the most vulnerable today.
Why does Latin America remain the most unequal region in the world?
There are many different inequalities that overlap, and reinforce each other. There are class inequalities, where rural dwellers and informal, uneducated urban dwellers are abandoned. There are race inequalities, overlapping with class inequalities, where indigenous- and African-descendent populations overrepresented among the poor, are systematically excluded and segregated from the mainstream. And then there’s also regional inequality, with some regions receiving the benefits of development and others that don’t. Again, these regions have strong class and racial components. There are also gender inequalities, of course, and these are only aggravated by the previous three.
Why do these inequalities remain? One reason is obviously the pro-wealth nature of the taxation system, where the rich are not paying their share of tax to the government. And government’s aren’t willing to change that! High quality education is often identified as a means of tackling inequality, but then we have a problem in Latin America: the segmentation of the education system. The poor attend public schools, and the middle and wealthy classes go to private schools. There is the absence of a class alliance that puts pressure of policy-makers to demand high quality education in the public sector. And for this reason, inequality remains high in the region.
How could the region’s apparent shift away from Left-leaning populism affect inequality reduction?
First, one has to ask whether Left-leaning or populist regimes are more capable of reducing inequality. We’ve definitely seen a reduction in income inequality in Bolivia, Ecuador, Argentina and Brazil. But we’ve also seen countries with no populist or Left-leaning governments with important inequality reductions, such as Peru, Mexico or Guatemala. For example, in 1986, Guatemala had a Gini coefficient as high as Brazil, but in 2014 it’s lower than Brazil, and Bolivia. And you have countries like Chile, with strong centre Left rule for long periods, since democracy returned, that had less success with inequality reduction. And obviously countries with no Left-leaning, or populist rule, that showed also no improvements in income inequality reduction!
But looking at other types of inequality reduction, especially when looking at subnational inequality in access to education and health, I’ve found that both Left-leaning and non-Leftist, populist and non-populist have been successful in reducing inequality. We have strong sub-national inequality reduction in health, for example, in Brazil, but also in Peru and Mexico.
So I think the relationship between Left-leaning or populist governments and inequality reduction is not that clear. There are some policies that are considered crucial for income inequality reduction, such as cash transfers. But these are not exclusive to the Left. But we do know that some Left-leaning policies, such as an increase in the minimum wage, better labour union negotiations, a universal rights approach to social services—these have positive effects on different types of inequality. Also, if these policies focused on the formal sector, then they might be missing inequality in the majority of the population that works in the informal sector.
What should every policy-maker have at the front of their mind when working to reduce inequality in Latin America?
Policy-makers need to recognise that inequality is multi-faceted and convoluted. Gender, race, regional, income inequality, they all interact with and contribute to one another. But perhaps more concretely, they have to stop looking at national averages and start seeing that there are lots of variations between groups at the sub-national level. A national average can be deceptive if development is focused on your capital, but at the same time you might be reproducing and increasing other types of inequalities.
The role of bureaucrats and technocrats in inequality reduction is huge. In my work, I observe how particular technocrats are quite capable of reducing sub-national inequalities without having necessarily significant political support. So they have a lot of power in this. They can be creative, and get a lot done on the fringes.