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Last Updated: Tuesday, 7 October, 2003, 21:01 GMT 22:01 UK
Latin America rich poor gap 'widens'
Guatemala
The poor are getting poorer, the World Bank says
Deep reforms are needed to close the income gap between the rich and poor in Latin America and the Caribbean, a World Bank report has said.

Income inequality in the region had worsened with the richest one tenth of the population earning 48% of its total income, while the poorest tenth earns only 1.6%, it added.

David de Ferranti, World Bank vice president for Latin America, said: "Latin America and the Caribbean is one of the regions of the world with the greatest inequality.

"This inequality slows the pace of poverty reduction and undermines the development process itself."

The income gap in Argentina has worsened dramatically amid its current financial crisis, which has seen poverty levels soar.

Racial 'disadvantage'

Inequalities had also increased in Uruguay, which is in the throes of an economic crisis, and Venezuela where the economy is suffering amid an ongoing political crisis, the bank said.

To overcome the inequality that undermines their efforts to get out of poverty, poor people must gain influence within political and social institutions, including educational, health and public services institutions
Guillermo Perry, World Bank
Race and ethnicity were singled out as key factors in determining the opportunities and welfare available to people in the region.

"Indigenous and Afro-descended people are at considerable disadvantage with respect to whites, with the latter earning the highest wages in the region," the Bank said.

For example, the report found men and women of African descent earn about 45% of their white counterparts.

However, it did have some good news.

The bank said improvements have been noted in Mexico and in Brazil, where the economy has become healthier.

Gender gap closing

It added Latin America had also advanced in closing the gender gap in income, while girls and young women had overtaken their male counterparts in education.

Favela in Rio
A favela - impoverished neighbourhood - in Brazil
To tackle inequality, the Bank recommended opening up more of its political and social institutions in order to allow underprivileged people to have a greater say in society.

Guillermo Perry, the Bank's Chief Economist for Latin America and the Caribbean, said: "To overcome the inequality that undermines their efforts to get out of poverty, poor people must gain influence within political and social institutions, including educational, health and public services institutions.

"To enable them to achieve such influence, the institutions must be truly open, transparent, democratic, participatory - and strong."

It added economic institutions should change their emphasis and aim to solve crises and encourage more people to save in good times and provide social safety nets in hard times.

The Bank also urged authorities to change their priorities and ensure the poor have better access to education, health care, water and electricity as well as rural services that could help make farmland more productive.




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