The World Bank said Tuesday the economies of Latin America would grow faster if they devoted more effort to poverty alleviation. World Bank economists say if Latin America waged a more successful campaign against poverty its economies would grow faster. Faster growth, says the Bank, is needed if Latin America is to compete against East Asia, the world's fastest growing developing region.
"Economic growth in Latin America has been disappointing across the 1990s, especially in comparison to the dynamic East Asian economies. And part of this is due to the high degree of poverty in the region that is a drag on economic growth," said William Maloney is a World Bank economist.
The World Bank says that while China reduced poverty by 42 percent in the 1980s and 1990s, per capita incomes in Latin America declined in the 1980s and rose only slightly in the 1990s.
Latin American economies have been growing briskly over the past two years. The region's economies grew by five and a half percent in 2004 and by over four percent in 2005. Boosted by the rise in oil and other commodity prices, growth has been strongest in Venezuela and Argentina at more than seven and a half percent last year. However, Joachim Bamrud, the editor of Latin Business Chronicle, says Chile has experienced the most balanced growth in recent years and has registered the biggest gains in poverty reduction. Speaking from Santo Domingo, Bamrud says rapid growth in Argentina and Venezuela has been accompanied by worrisome price rises.
"The end result from most economists point of view is bad for those two economies. The inflation in those two countries-Venezuela and Argentina-- is spiraling out of control because neither country has solid macro-economic managers. Instead they are looking at the economies as tools for social goals," he said.
Bamrud says that it is ironic that while the leftist governments in both Venezuela and Argentina champion the poor, the poor are hardest hit by rising prices. Inflation is expected to reach 10 percent this year in Argentina and 18 percent in Venezuela. For Latin America as a whole inflation this year is expected to decline to five and a half percent, which would be the lowest rate in over 25 years.
Another optimist on the region's economies is Inter-American Development Bank President Luis Alberto Moreno. He says that since mid-2003, economic growth in Latin America has averaged four-point-nine percent annually, a figure he calls the region's best growth cycle in nearly three decades.