Economic growth alone is not enough: UNDP calls for a "multidimensional progress"

Feb 20, 2015

Caption: A boy in El Salvador rides his bike home. Photo: Mauricio Martínez UNDP El Salvador

UNDP estimates 3.2 million new poor in the region in 2014-2015, focusing on policies that prevent more setbacks

Montevideo/New York, February 20, 2015- Economic growth alone will not reduce poverty and inequality in Latin America and the Caribbean. This was a key message from the United Nations Development Programme (UNDP) during the first Advisory Board Meeting of its Regional Human Development Report 2016 on Multidimensional Progress with over 20 officials including ministers, senators, academics and leaders of major multilateral organizations in the region.

UNDP simulated what would happen if the region grew during 2017-2020 at the same rate as it did during the last decade —that is 3.9% annually—, yet, estimates show that less people in Latin America and the Caribbean would be lifted from poverty than in the previous decade. While an average of 6.5 million women and men in the region left poverty every year during 2003 and 2012, only about 2.6 million a year would leave poverty behind (earning more than US$4/day) between 2017 and 2020.

"Clearly, ‘more of the same’ in terms of growth—and public policies—will no longer yield ‘more of the same’ in poverty and inequality reduction," said UN Assistant Secretary General and UNDP Director for Latin America and the Caribbean Jessica Faieta. "Higher economic growth does not necessarily generate greater social progress: different policies must be in place, particularly at a time when fiscal resources, crucial to expand social safety nets, have shrunk."

Challenges – Based on the IMF’s regional growth forecast of 1.3 percent for 2015, UNDP estimates that about 1.5 million more men and women will fall into poverty by the end of this year. They will join the 1.7 million people in the region who already fell into poverty in 2014 —the first time in a decade— according to UNDP estimates.

According to UNDP’s analysis, what determines people to be "lifted from poverty" (quality education and employment) is different from what "avoids their fallback into poverty" (existence of social safety nets and household assets).

This suggests that economic growth alone will not build "resilience", or the ability to absorb external shocks—financial crisis or natural disasters—without major social and economic losses.

Therefore, UNDP stressed today that people’s wellbeing must reflect “more than income” alone, calling on the region’s leaders to focus on "multidimensional progress". This includes investing in skills for better employment opportunities, in financial systems that prevent over-indebtedness and reducing gender gaps.

"Many countries in the region have achieved quantitative and qualitative progress. However, we must not fall into complacency, "added Diego Canepa, Secretary to the Presidency of the Republic of Uruguay. The challenge is to consolidate this progress and deepen the discussions, many of them promoted by the United Nations. Change is what ensures sustainability."

"The Millennium Development Goals have taught us that, beyond growth, development interventions should address multidimensional aspects of well-being," said Gonzalo Robles, Secretary General of the Spanish Agency for International Development Cooperation. "Despite the social achievements in the last decade, social protection systems are not yet universal, covering access to decent work, health, education and protection throughout people’s life cycle."

In this context UNDP is preparing its 2016 Human Development Report for Latin America and the Caribbean on Multidimensional Progress, which will also include policy recommendations that reflect the new global development agenda, with the Sustainable Development Goals which will be launched in September during the UN General Assembly in New York.

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About the Regional HDR: This third Human Development Report for Latin America and the Caribbean is an editorially independent publication commissioned by UNDP. This report is being prepared with financial support from the Spanish Agency for International Cooperation for Development (AECID, in Spanish). Over 20 regional authorities took part in the report’s Advisory Board including ministers, senators, academics and the current leaders of the region’s major multilateral organizations. To download previous reports and for more information in English and Spanish: latinamerica.undp.org

Contact information

In Montevideo:
Esteban Zunin esteban.zunin@undp.org
In New York:
Carolina Azevedo - carolina.azevedo@undp.org
Tel: +1 212 906 6127

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