Poverty rate rose 2.9% in Mexico between 2008 and 2015: ECLAC

The Economic Commission for Latin America and the Caribbean (ECLAC) said that poverty rate rose 2.9% in Mexico between 2008 and 2015.

According to the report “Social Panorama of Latin America 2015” presented today at a press conference in Santiago, Chile, the poverty rate fell in the great majority of the Latin American countries in 2010-2014. The largest declines were in Uruguay (at an annual equivalent rate of -14.9%), Peru (-9.8%), Chile (-9.1%) and Brazil (-7.9%).

It added that “falling incomes were the main factor behind the rise in poverty in Venezuela, Honduras and Mexico.”

In absolute terms, the number of people in situations of poverty grew by around two million in 2014 compared with 2013, totaling 168 million persons, of whom 70 million were indigent. The growth in the number of poor in the region resulted from a rise of some 7 million recorded or projected mainly in Venezuela, Guatemala and Mexico and a decline of 5 million occurring mainly in Brazil, Colombia and Ecuador.

According to the organization’s projections, in 2015 the regional poverty rate likely rose to 29.2% of the region’s inhabitants (175 million people) and the indigence rate to 12.4% (75 million people).

The report added that at 1.2%, the Latin American growth rate in 2014 was lower than both the global average (2.6%) and the previous year’s rate (2.8%), meaning that the slowdown which had begun in 2011 deepened. Not all subregions were affected alike: GDP growth rates in 2014 were 0.6% in South America, 0.7% in the English- and Dutch-speaking Caribbean, 4.0% in Central America and 2.2% in Mexico.

Also ECLAC said that the richest 10% of the population in Latin America and the Caribbean pay an exceptionally low personal income tax rate compared with the rate applied to waged workers, according to the research “Time to Tax for Inclusive Growth”, presented today by the ECLAC and OXFAM.

In some of the region’s countries, the highest income group pays between 1% and 3% of their gross income as income tax (compared to around 10% in other countries). According to the document, in the United States the actual rate for the richest 10% is 14.2% (with the figure reaching over 20% in some countries).

Alicia Bárcena, Executive Secretary of this United Nations Commission, said that all of the region’s countries should prioritize safeguarding progress made by Latin America and ensuring inclusive and sustainable growth. As a result, ECLAC and OXFAM have signed an agreement to work together promoting and building a new consensus against inequality.

According to Simon Ticehurst, OXFAM Director for Latin America and the Caribbean, between 2002 and 2015, the fortunes of multimillionaires in Latin America grew an average of 21% per year (or six times faster than GDP in the region). Much of this wealth is exempt from taxes in tax havens.