By THE PULSE NEWS MEXICO STAFF
Mexico, along with Chile and Brazil, had the highest economic inequality among Latin American countries, according to a regional report by the United Nations Development Program (UNDP) released earlier this week.
“Despite decades of progress, the region continues to be the second-most-unequal in the world (after the African sub-Sahara), and income inequality in Latin American and the Caribbean (LAC) countries is greater than in other regions with similar levels of development,” the report said.
“Inequality, like poverty, is multidimensional and goes beyond simple income numbers.”
According to the report, which was based on figures from 2019, the most recent available regionwide, among Latin American countries, Mexico, Chile and Brazil had the highest concentration of income in 2019, with 10 percent of their population earning more than 57 percent of their respective national incomes.
The report also indicated that and the highest 1 percent of the three countries’ respective populations accounted for 28 percent of their national incomes.
In Mexico, it said, the top 10 percent of income earners received 59 percent of the national income, while the highest 1 percent earned 29 percent of income revenues between 2000 and 2019.
In contrast, it said, Uruguay, Argentina and Ecuador had the lowest levels of income concentration in the region between 2000 and 2019, although income disparity remained high in absolute terms, and the concentration of wealth in Argentina and Ecuador appears to have decreased since 2010.
The report said that LAC countries have registered little economic progress over the last decade, and that Latin America is “submerged in a trap of high inequality and low growth.”
This cycle of stagnation, it said, creates a vicious circle that limits progress on all fronts of human development.
“Along with high inequality, the region is also characterized by volatile and generally low growth, the result of low productivity,” the report stated.
Another key characteristic among the LAC countries, it said, is a lack of economic mobility, which it said is not limited to educational opportunities.
“Low income and limited occupational mobility can discourage educational and training mobility by reinforcing the idea of low returns on investments in human capital,” it said.
Consequently, it said, education is not prioritized within low-income sectors.
On reading the UN report, Ernesto O’Farrill, president of the Grupo Bursamétrica financial group, explained that high economic inequality in Mexico is the direct result of low growth and a lack of investment.
O’Farrill said that this was clear evidence that federal social programs, implemented and much-touted by President Andrés Manuel López Obrador (AMLO), “have not made a difference” in rectifying the country’s severe economic disparity.
“If there is no growth, there is no investment and there are not enough jobs,” he said.
“As a result, poverty increases.”
According to the Mexican government’s own National Social Development Secretariat (Coneval), in 2020, poverty levels increased 3.4 percent to more than 40.7 percent of the population in 2020.
O’Farrill warned that Mexico’s high economic inequality will only continue to increase “so long as the circumstances remain the same, where confidence does not return because the government does not respect the rule of law.”