World Bank: Africa and Latin America, with the greatest inequality

Latin America and sub-Saharan Africa are the regions where the countries with the highest levels of inequality, with the lowest income and consumption capacity, are concentrated. This condition hinders the reduction of poverty and the creation of prosperity, the World Bank highlighted in the report. Paths out of the polycrisisreleased yesterday. The organization warns that, on a global scale, poverty reduction is at a slow pace; so much so that It could take more than a century to eliminate it, under the parameters used in almost half of the planetthat is, an income per person of 6.85 dollars (around 135 pesos) per day.

The report provides the first post-pandemic assessment of global progress toward eradicating poverty and boosting shared prosperity on a liveable planet. The organism’s diagnosis is conclusive: Global poverty reduction has slowed to a near halt, and 2020-30 will be a lost decade.

Currently, the economies with the greatest inequality are concentrated in sub-Saharan Africa and Latin America and the Caribbean, the report states. More than 80 percent of Latin American and Caribbean economies had a Gini index above 40 in their most recent household survey.

The Gini index, which ranges from zero to 100, is used as a reference to measure the inequality of income distribution. The closer to zero, the greater the equality, and the closer to 100 it reflects a more unequal distribution.

Mexico, along with Latin American countries, and even the United States, has a Gini index greater than 40, as do the countries of sub-Saharan Africa. In Canada it is 30 to 40, that is, it is the least unequal country on the American continent.

The World Bank stated that high inequality reflects a lack of opportunities for socioeconomic mobility, which further hinders the prospects for poverty reduction and prosperity over time.

On the other hand, the organization stated, the reduction of inequality has a significant effect on the reduction of poverty.

Of the 68 countries with inequality in the world, less than 15 percent were at a low level of inequality and 37 percent were at a high level.

That is, around 1.7 billion people lived in economies with high inequality in 2022, the year in which there were 49 economies in this situation, which is a smaller number compared to the 66 that there were in 2022.

Of the total world population, 22 percent live in economies with high inequality, a level that has remained approximately the same in the last decade and about 8.5 percent of the world population will live in extreme poverty in 2024. That is, 692 Millions around the world live on less than $2.15 per person per day.

The highest poverty line is represented by each person living on $6.85 a day, which is the most typical sample in upper-middle-income countries, and who in turn represent 43.6 percent of the world population.

Although the poverty rate was reduced from 38 percent in 1990 to 8.5 percent in 2024, it has not fallen further due to lower economic growth and multiple shocks such as the covid-19 pandemic, high inflation and the increase in war conflicts.

The World Bank noted that there is a broad consensus that it is harmful for high levels of inequality in a country because they can be symptomatic of the difficulty of some groups of the population to climb the economic and social ladder and participate in economic activity. using all its potential. However, around a third of low-income economies and two-fifths of middle-income economies have high levels of inequality.

Extreme poverty today is only slightly lower than the rate observed before the pandemic in 2019, and in many poor settings poverty rates remain higher than five years agodetailed the World Bank.

A century to combat the problem: Oxfam

Eradicating poverty will be a task that will take more than a century because the world’s wealth is in the hands of only one percent of the world’s population, Oxfam stated, regarding the World Bank report.

Max Lawson, Director of Inequality Policy at Oxfam International, said in a statement that rapidly and radically reducing inequality in all countries should be the World Bank’s top priority.

“Given that the richest one percent capture more wealth than 95 percent (of the population), it is not surprising that it may take more than a century to end poverty.

We agree with the Bank that people around the world are facing a lost decade, which will mark an entire generation, but at the same time the richest are facing the best decade in their history, and these two things are closely related. linkedhe added.