Sustaining Recent Social Progress May Require a Squeeze on the Rich
Tuesday, April 1, 2014
Growth in Latin American has certainly slowed, to below 3% in the past two years compared with an annual average of 5% in 2003-08. But poverty continues to fall. In a report* released this week, the World Bank reckons that in 2012 only a quarter of Latin Americans were “poor”, a category defined as those living on less than $4 a day at purchasing-power parity (see chart).
The largest social group in the region is made up of those whom the bank defines as “vulnerable” to sinking back into poverty. But they are set to be surpassed in size by the middle class sometime in the next three years. That is significant, not least because the bank uses a more realistic definition of the middle class (a daily income of $10-50) than those often bandied about in the region.