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Rich-poor gap grows in Latin America

August 24, 2012

From the print edition

RIO DE JANEIRO – The gap is widening between the rich and poor in much of Latin America, the world’s most economically unequal and most urbanized region, the United Nations said Tuesday.

The richest 20 percent of the population now earns on average nearly 20 times more than the poorest 20 percent, a study by the U.N. Human Settlements Program (U.N.-HABITAT) found.

“The main challenge is how to combat such huge disparities in the cities,” where eight out of 10 of Latin America’s 589 million people live, said Erik Vittrup, the U.N.-Habitat expert who presented the report.

Inequality has grown in Costa Rica,  Colombia, Paraguay, Ecuador, Bolivia, the Dominican Republic, Argentina and Guatemala, according to the study, with Guatemala claiming the title as the country with the greatest disparity between the rich and poor.

The countries with the most equitable spread of riches are Venezuela, Uruguay, Peru and El Salvador.

“Income inequality is extremely high. There is a considerable job deficit and a large labor informality affecting mainly the young and women,” the U.N. report said.

Despite some progress recorded over the past decade, 124 million people live in poverty in Latin America and the Caribbean. More than half live either Brazil or Mexico.

Urban areas are projected to keep growing, with nearly nine of 10 people expected to live in cities by 2050, the study said, though the pace of the rural exodus has been slowing.

“Migrations are now more complex and occur mainly between cities, at times across international borders,” the U.N. said.

However, the agency warned that cities are becoming increasingly less compact, expanding physically in an “unsustainable” pattern.

The study, titled “State of the Cities of Latin America,” found the urbanization rate is the highest in the farthest south, followed by Andean countries and Mexico, then the Caribbean and Central America.

It also noted a six-fold increase in the number of cities in the region over the past half century, with half of the urban population living in cities with fewer than 500,000 people.

The 50 main cities of Latin America have an annual gross domestic product of more than $842 billion and are the engines of the regional economy.

But as the cities grow, so does income inequality, the report concluded.

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