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Opinion and Analysis: Economy | Social Programs

Venezuela Led Region in Poverty Reduction in 2012, ECLAC Says

The Associated Press reported yesterday that the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) has highlighted a slowing of progress in poverty reduction in Latin America, citing “rising food costs and weaker economic growth” as contributing factors:

Poverty in Latin America and the Caribbean is now easing at a slower pace, the UN's regional economic body said on Thursday, calling on governments to make policy changes that encourage growth while reducing the huge gap between the rich and poor.

UN economists based in Santiago said about 164 million people, or 28 percent of the region's population, are still considered poor. That is nearly unchanged from last year. Out of those, 68 million of them are in extreme poverty.

But there are bright spots. ECLAC’s new “Social Panorama of Latin America” report [PDF] notes that Venezuela and Ecuador led the region in decreasing poverty in 2012:

Six of the 11 countries with information available in 2012 recorded falling poverty levels (see table 1). The largest drop was in the Bolivarian Republic of Venezuela, where poverty fell by 5.6 percentage points (from 29.5% to 23.9%) and extreme poverty by 2.0 percentage points (from 11.7% to 9.7%). In Ecuador, poverty was down by 3.1 percentage points (from 35.3% to 32.2%) and indigence by 0.9 percentage points (from 13.8% to 12.9%).

This 5.6 percentage point decrease in Venezuela translates into a 19 percent decline in poverty overall last year, which CEPR Co-Director Mark Weisbrot noted last month “is almost certainly the largest decline in poverty in the Americas for 2012, and one of the largest – if not the largest – in the world.” 

This dramatic decrease in poverty is likely due to the impact of two new misiones (social programmes), the Gran Misión En Amor Mayor Venezuela and the Gran Misión Hijos de Venezuela, which were, by January 2013, benefitting more than 1,400,000 people.

Both misiones are aimed at assisting people living in extreme poverty: GM En Amor Mayor provides pensions to elderly people, and the GM Hijos de Venezuela provides cash transfers to households with children and pregnant women. The two missions are reaching a significant number of people: as of January 2013, 516,000 elderly people were receiving a monthly pension through GM Amor Mayor. Meanwhile, the program GM Hijos de Venezuela was making monthly payments to 324,000 families, which represents 794,000 individuals.

As well as simply reducing poverty, the GM Hijos de Venezuela reduces gender inequality. 98 percent of the recipients of the program were women, who are in many countries in Latin America overrepresented among the poor. It can be reasonably hypothesized that this high level of targeting is likely to increase the economic independence of women, reducing the frequent economic imperative for women to stay in disadvantageous relationships.