The recovery in economic growth between 1990 and 1997 helped to reduceboth poverty and indigence throughout the region. By 1997, the percentage of thepopulation living in poverty fell by almost five percentage points compared to 1990,although it still remained three percentage points higher than in 1980. These positivetrends ceased, however, in 1997. Since then, the region has seen economic growth and thefight against poverty stagnate and, in some cases, clearly retreat. It is no exaggeration,therefore, to say that the population of Latin America has been affected by the negativeconsequences of this lost half decade.

Estimates from ECLAC indicate that today poverty ishigher than in 1997 and that the number of the poor rose by almost 18 million people. Thistrend has not affected every country uniformly. Most recently (2000-2002), Mexico and theDominican Republic managed to reduce poverty. At the other extreme, the Argentine crisisproduced one of the largest increases in the region, with poverty rising at least threepercentage points.

Meeting the goal established by the Millennium Declaration of cuttingextreme poverty by half in 2015 therefore constitutes a tough challenge for the regionand, given trends in recent years, has become virtually impossible for a significant groupof countries. Achieving this goal requires total growth in output of 2.7% per year, risingto 4.0% if the goal were to cut overall poverty and not just indigence by half. Whilethese requirements don't seem too distant from Latin America's traditionalgrowth patterns, the outlook is more complex in the countries with the highest povertylevels. These countries would have to grow somewhere between 5.7% and 7.0% to reducepoverty.

"... depending solely on economic growth to deal with the problem of poverty in Latin America will make it hard to meet the objective set for 2015." As a result, depending solely on economic growth to deal with the problemof poverty in Latin America will make it hard to meet the goal set for 2015. It isbecoming ever more necessary to resort to economic policies that, aside from seeking toexpand the productive base and increase national output, include the progressiveredistribution of income as a viable alternative for meeting the Millennium targets.

One of the main obstacles to achieving better equity in the distributionof the fruits of growth is the poor record of quality job creation. Existing jobs are notenough to absorb the rise in the supply of workers with technical or professionalqualifications, producing significant under-use of these resources, with the resultingsocial consequences. It is estimated that around 24% of the Latin American workforce withthese qualifications is under-used due to unemployment and the very low compensationavailable in the market.

Progress in reducing school drop-out rates - from 45% to 37% - in LatinAmerica at the primary and secondary levels is helping to reduce inequities in the region.The fruits of this improvement, however, will only be enjoyed in the long term and willdepend on significant improvements in the quality and relevance of educational content.Although educational inequity between socio-economic strata remains an issue, countriesare clearly making progress in terms of retaining the poorest students and augmentingsocial programs, which, aside from standing out for their application of best practices,require resources that are within the possibilities of most of the region'scountries.