The 'Social Panorama of Latin America 2000-2001',just published by United Nations Economic Commission for Latin America and the Caribbean,(ECLAC), provides a complete analysis of the evolution of socialconditions in Latin America over the last decade of the 20th century. The reportdemonstrates one unequivocal area of progress: the increase in social spending and risingtargeting of it to the poorest sectors of the population. On average, social spending rosefrom 10.4% to 13.1% of the region's Gross Domestic Product, although growth sloweddown during the second half of the decade, which was also the most frustrating period forthe region in terms of economic growth.

There has, however, been an area of clear regress: conditions affectingthe labour force. Open unemployment rose from 6% early in the 1990s to almost 9%. Thisrising trend is particularly severe in South American countries and involves severalworrying signals. It severely affects low income groups but also, increasingly, middleclass sectors; the average duration of unemployment has grown longer and when theunemployed successfully rejoin the workforce, they do so only by accepting significantincome cuts. Low job creation is partly due to slow economic growth, but also tostructural factors linked to the changeover to new technologies and the preference forskilled labour that they involve. Moreover, job quality has tended to decline,particularly given that seven of every ten new jobs in urban areas were generated in theinformal sector.

Trends in poverty and income distribution are also worrying, according tothe report. Although the percentage of the population living in poverty tended to fall,the number of poor people remained at around 200 million for most of the decade and roseto 211 million in 1999. Furthermore, that year, 44% of the region's inhabitants wereliving in poverty, up from 41% of the population two decades earlier. Since per capitaincome rose over the past 20 years, this trend in poverty is a clear sign of worseningincome distribution. This was particularly critical during the debt crisis of the 1980s,but, as the recent report indicates, the situation did not improve enough during the1990s: the number of countries where this adverse trend in income distribution was stillgreater than those where it improved slightly. In synthesis, two lost decades in terms ofpoverty and social inequality.

To improve this situation it is essential that the region's economiesgrow more quickly. Last year, at the United Nations Summit, heads of state from around theworld issued their Millennium Declaration, committing themselves to slashingindigence or extreme poverty in half by 2015. According to estimates published by ECLAC inits 'Social Panorama', this would require economies togrow at 3.8% annually, more than the modest growth rates of the past decade (3.2%annually). Latin America's goals, however, should be more ambitious. The region mustaspire to cutting total poverty and not just indigence by half, by 2015. To do so willrequire annual growth of over 4.4%. Moreover, the countries with the highest income shouldset themselves the goal of eliminating extreme poverty by then.

We should emphasize, however, that not everything could be reduced tofaster growth. The essential problem is how to effectively include equity in the socialagenda and, particularly, the economic agenda. To do so will require more education,health care, and social protection for low income sectors, but also, and perhapsespecially, greater opportunity for them to participate in the workforce and incomegeneration, for both poor wage-earners and independent producers, many of them in theinformal sector. ECLAC's 'Social Panorama'indicates, in effect, that the inability to generate quality jobs is the Achilles' heel ofthe current regional development pattern. Resolving this problem must become, therefore,the foundation for all economic policy.