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Inequality 1 — The Institutional View

Dear LAB supporter and friend,

This Newsletter is the first of two we will devote to the topic of inequality, a key issue for Latin America and the Caribbean.  In this first issue we are presenting some institutional analyses from multilateral agencies, British development agencies and their partners. 

Our starting point is the UNDP’s first regional Human Development Report on Latin America and the Caribbean, Acting on the Future, published in 2010. This important study addresses what it describes as ‘a significant and persistent inequality, accompanied by low social mobility, [which] has led the region to fall into an ’inequality trap’ a vicious circle that is difficult to break.’   Latin America and the Caribbean is the most unequal region in the world, it notes.  This is an observation that has often been made, but this report explores the factors that produce inequality and tries to identify policies that can break this vicious circle.  Tackling inequality is different from reducing poverty, it stresses, and requires an explicit commitment by government.  Particularly interesting is the analysis of ‘conditional cash transfers’ such as the Brazilian bolsa família family allowance programme, which, it finds, do not eliminate cross-generational equalities.  This confirms the analysis of the article LAB carried a few months ago. Read more.  As to what policies might achieve greater equality, the report is unclear, and leaves us with an uneasy feeling that it fails to address the question of class, power and the ownership of land, wealth, commodities and the means of production. Read more.

The Scandal of Inequality in Latin America and the Caribbean, published in April this year, leaves no doubt about the position of the British development agency, Christian Aid.  The report focuses on the role of gender, ethnicity and climate change as factors exacerbating inequality.  Read more.

The Oxfam Briefing Paper, Left behind by the G20? also focuses on environmental degradation and climate change as factors that reduce the access of the poor to vital resources. Read more.

The need for secure and well-paid employment as part of a strategy for reducing inequality is one of the themes of Acting on the Future and is the central theme of a new report by the UN Economic Commission for Latin America, ECLAC (or CEPAL in Spanish).  ‘Employment with full rights holds the master key to equality,’ is its message. Read more.

The Christian Aid/CEBRAP report, The Real Brazil, takes the argument further.  Like UNDP, it finds that cash transfer programmes do not have much impact on inequality. Both reports argue that well-paid employment is a crucial element in reducing poverty, but it needs to be combined with a progressive tax system and support for small business initiatives.  The Real Brazil ties to apply to Brazil the pioneering study of Richard Wilkinson and Kate Pickett in The Spirit Level (available from The Equality Trust).  It also includes an important assertion by Christian Aid’s director that inequality should have the same focus in the future as the Millennium Development Goals, and a commitment that Christian Aid will continue to work in countries like Brazil Read more. This has important implications at a time when DfID and some aid agencies are arguing that their work is no longer necessary in the BRICS and other less poor countries.

There is a focus on Peru in one chapter of the Christian Aid report that describes how geography is an important factor in inequality here – the mountains and the jungle have higher levels of poverty than the coast, where there has been a boom in recent years.  Another important factor is the inability of some local authorities effectively to spend the royalties they receive from mining.  Read more.

In a future Newsletter we will look at the impact of inequality as seen by partner organisations and communities across the region, and review their proposals for tackling it.

Best wishes

The LAB team