Poverty in Latin America: Back to the Abyss?

Abstract

During the early 1990s, many Latin American countries enjoyed exceptionally strong economic growth, which has been credited with making possible substantial reductions in their rates of poverty. However, the collapse of capital flows to Latin America that began in 1995 portends a decline in the region's economic growth. If these countries now register growth rates that are only modestly positive (on the order of 1-3%), the question then arises as to whether this progress in overcoming poverty is bound to stall. Despite new rhetoric to the contrary, Latin Americans have relied on growth almost exclusively as the way to overcome poverty. The distribution of income has changed very little over the past decade and, where change did occur, in many cases it has been for the worse.