MEXICO CITY.- Mexico has reduced monetary poverty and inequality in recent years, but the progress has stagnated and could be reversed due to an adverse global environment, warned the ‘Poverty and equity report in Mexico’ of the World Bank (BM).
The document, presented on Tuesday at the Faculty of Economics of the UNAM by Samuel Freije Rodríguez, a leading economist in the world’s poverty practice, points out that the country faces a slowdown in the reduction of poverty, with signs of deterioration in some areas.
“The redesign of existing social programs and their financing can reverse this problem in a relatively rapid way,” said Freije Rodríguez during the event, where academics and students participated.
Economic growth as a key to reducing poverty
Mark R. Thomas, director for Mexico, Colombia and Venezuela of the BM, said that Mexico’s economic growth must be more dynamic and inclusive, so it recommended incorporating smaller and medium enterprises into global value chains and increasing female labor participation.
Also, Marcela Amaro Rosales, director of the Institute of Social Research of the UNAM, said that insufficient economic growth is the main obstacle to reducing poverty.
According to the projections of the report, if GDP grows 2 % per year, poverty would decrease to 15.4 % in 2030; With a growth of 3%, the rate would fall to 13.4%.
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However, he warned that these measures should be complemented with child care policies and access to credit to improve economic inclusion.
The academic Gerardo Esquivel Hernández, a researcher at El College of Mexico, stressed that the report is a serious and balanced analysis that recognizes advances, but also identifies improvement areas.
Factors that aggravate poverty
The report highlights that Mexico’s vulnerability to extreme climatic events could affect advances in the fight against poverty.
In this regard, he explained that the country has successful resilience experiences that must be expanded and improved.
To achieve the eradication of extreme poverty, the BM recommends three key strategies, such as promoting inclusive growth with greater female employment and labor formalization.
In addition to redesigning social programs to make them fiscally sustainable and promote investments that combine social welfare with climate resilience.
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The diagnosis also emphasizes that health spending must be increased, but for this it is necessary greater economic growth that allows generating the fiscal resources necessary to strengthen basic services.
Extreme inequality in Mexico
During the presentation, Lorena Rodríguez León, director of the Faculty of Economics, said that the concentration of wealth in a few hands is a global problem and emphasized extreme inequality in Mexico.
According to data from the Economic Commission for Latin America and the Caribbean (ECLAC), the richest 1% in the country has 41.2% of the total wealth, while 0.1% accumulate 22.3%.
In contrast, 64.2% of households have less than 50% of net wealth.
“This document identifies critical areas of intervention to respond what it would need to eradicate poverty in our country in the short and medium term; It is a fundamental tool to understand the phenomenon of poverty and inequality, ”said Rodríguez León.
With EFE information
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