Worldwide, there is a profound need for pragmatic solutions based on an informed understanding of poverty and inequality as root causes (rather than consequences) of political and economic instability and social unrest.
Close to 2.8 billion of the world’s population—two out of five people—live on less than US $2.00 per day. This is true for much of Asia, Africa and Latin America, but it is also true in parts of Eastern Europe and even in some developed countries.
Studies by academic institutions and international organizations have concluded that poverty is not simply a lack of unsatisfied basic needs or a low income; it is also characterized by not having equal access to the assets and opportunities provided by society, and by belonging to a social group discriminated against based on sex, age, socio-economic conditions, religious creed, or ethnic background.
The persistence of poverty in more than 50% of the Latin American population can be explained by the uneven distribution of economic growth and wealth. International studies point to Latin America as the region with the greatest gap between the rich and the poor. Inequality is more than differences in income and profits, though; inequalities in opportunities must also be taken into account. Latin Americans, for example, have unequal access to ownership rights, security and justice, education and health services, and business and market opportunities.
Therefore, social inequality in Latin America is not simply the result or consequence of, but rather the cause of many weaknesses in democracies, economic markets, and the state of law and its effectiveness (or ineffectiveness) in dealing with social and political polarization. This social inequality has been institutionalized through time, as the result of historical imbalances within the region, and between the region and the more developed and dominant regions of the world.
This explains why the relative economic growth among Latin American countries in the last 20 years has not been able to substantially reduce the level of poverty. A recent study conducted by the Inter-American .Development Bank concerning social cohesion in Latin America and the Caribbean indicates that, while there has been some progress in areas such as primary education and gender equality in school registration, reduction of the infant mortality rate, expansion of the drinking-water supply, and control of contagious diseases, the region lags behind with respect to the United Nations Millennium Development Goal to reduce poverty in half by 2015.
It is also evident that the fight against poverty is not the exclusive responsibility of the government entities dedicated to social affairs.
International experience shows that if economic policies and production sectors are oriented to sustain growth of sectors with a high impact on employment, such as agriculture and small-scale industry, poverty will be further reduced.
A 2005 World Bank study on seven Asian countries also reveals that countries with policies geared toward a controlled opening of the global market, together with significant government investments aimed at reducing barriers to national production, have reported positive results in overcoming poverty, in contrast with countries with different types of economic policies.
Many of the social programs in Latin American countries created during the 1980s emphasized infrastructure to the exclusion of most other issues, stemming from a perception that poverty was simply a lack of physical capital. The limitations in poverty reduction in Latin American countries, though, cannot be attributed exclusively to a limitation or failure of social policies and programs. Rather, there must be an examination of the effects of economic policies, such as policies that encourage investments in high-yield, low-employment sectors, and other policies that result in an unfair distribution of wealth and inequalities in access to capital.
Although significant efforts have been made to better understand and counteract the systemic causes of poverty and inequality, there are still significant challenges that must be addressed. These are challenges that face not just national governments, but also regional and local governments, nongovernmental organizations, academic centers, the private sector, and private citizens. Overcoming poverty is a task that must involve every facet of civil society, each from its own area.
The purpose of the Global Center is to bring together expertise from the public, private, nonprofit, and academic sectors, and from various countries and regions around the world, to analyze these challenges and to craft and implement practical solutions and alternatives to inform decision making and guide systemic change in developing regions.