World Bank Reports On Inequality In Latin America

Level playing field key to tackling inequality in Latin America, says World Bank

2 October 2008 – Levelling opportunities will be key to development in Latin America, where 15 to 50 per cent of total income inequality is due to factors such as gender, race, place of birth and parents’ education and occupation, according to a new report released by the World Bank.

The report marks the first time the World Bank has used the Human Opportunity Index (HOI), which shows the role personal circumstances play in gaining or preventing access to those services needed for a productive life, such as running water, sanitation, electricity and basic education.

“Latin America and the Caribbean is one of the most unequal regions in the world, where the richest 10 per cent of the population captures 40 per cent of total income, while the poorest 10 per cent receives a mere 1 per cent,” noted Pamela Cox, World Bank Vice-president for Latin America and the Caribbean.

“To a large extent, this can be attributed to the fact that not everybody has the same opportunities. This has to change. The HOI is a new tool that will help governments assign budget allocations more efficiently, and generate opportunities for all,” she said.

The study, which covered 19 countries in the region, found that several nations, such as Brazil – which has a high level of income inequality between adults – have made important advances towards equalizing opportunities for children.

“Latin Americans have always felt an uneven playing field beneath our feet, that our destiny is predetermined from childhood by circumstances over which we have no control,” said Marcelo Giugale, World Bank Director of Economic Policy and Poverty Reduction for Latin America.

“Now that we can measure the inequality in opportunities, we are seeing that their feelings were real. But, even more importantly, now we can do something about it. We can establish public policies focused on equity,” he added.

The results of the HOI show that crucial to determining access to running water, sanitation and electricity services are a person’s birthplace, followed by parents’ income. In addition, parents’ education and socio-economic status are closely related to their children’s educational achievements.

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