The

, just published by ECLAC, provides a complete overview not only ofthe region's successes in the 1990s but also of the stagnation and setbacks that haveoccurred in the social area. The most important achievement, without a doubt, is thereduction of poverty. The proportion of poor households has gone down from 41% in 1990 to36% in 1997. But, despite this improvement, the region barely managed to return to thesame level of relative poverty as in 1980, before the debt crisis, when the figure was35%. The absolute number of the poor remained at some 200 million throughout the decade,more than the 136 million recorded in 1980. While most of the region's poor now livein urban areas, poverty levels, especially those of indigence, have tended to remainhigher in rural Latin America.

The main reason for the fall inpoverty levels is economic growth. This is why Chile, the region's most dynamiceconomy during the decade, achieved most in this regard: a 13% drop. However, there is nomechanical relationship between growth and falling poverty. This relationship is onlyclose when growth is accompanied by dynamic job creation in high-productivity activities -a pattern which, as we shall see, has been absent in most of the region. As a result,economic growth in several countries did not produce any equivalent reduction of poverty.Some countries did bring about improvements thanks to efficiently channelled transfersfrom the public sector to poor households and an end to hyperinflation, with its severeimpact on low-income groups. The most outstanding case of this was Brazil, where thecombination of these two factors was reflected in a 12% fall in poverty levels, onlyslightly less than in Chile.

Increased public social spending isalso a substantial step forward. In the region as a whole, such expenditure grew from10.1% of GDP in 1990 to 12.4% in 1997, allowing three quarters of the countries to spendmore per capita than before the debt crisis. Furthermore, over half this increase went tothe areas of spending with the greatest redistributive impact: education, health andsocial assistance. The benefits of this policy will become clear in the long term, giventhe relationship between human capital accumulation and the achievement of growth which,at the same time, safeguards social equity. Colombia and Bolivia are among the countrieswhich have achieved the fastest advances in this respect; social spending there grew by 6%and 7% of GDP respectively during the current decade.

In contrast with these achievements,however, income distribution has showed no sign of improving. In fact, more countries havefallen back in this regard than have advanced. Moreover, although comparisons of data overlong periods of time is a complex matter, there is probably no country in the region whereinequality is less now than before the debt crisis; in many it is worse. This, of course,is a matter of great concern, given that inequality levels in Latin America are stillgreater than in any other region of the world. It also shows that, on the whole, fallingpoverty levels are not due to any lessening of income inequalities. Of all the countriesof the region, only in Uruguay do we find falling poverty combined with relativelyequitable income distribution.

The inequality characteristic ofLatin America reflects a range of factors: education, demography, patterns of propertyownership and employment. The decade saw some improvement in the first, and, as regardsdemography, the high number of children from poor households has gone down over the verylong term. On the other two fronts, however - property ownership and employment - therehas been stagnation and setbacks. As the

makes clear, thisis particularly true of jobs. Three related and worrying phenomena have been apparent inalmost the entire region in this regard: rising open unemployment, sparse creation of jobsin high-productivity sectors and a widening wage gap between high- and low-productivityjobs.

The economic slowdown of 1998, andthe recession currently affecting the entire region, mean that the century will end amidserious tensions in the social arena. The most immediate effect of the crisis is adeteriorating labour market, as the experience of a number of countries has maderegrettably clear. Given the link between growth and poverty levels, setbacks in thelatter are likely, while public spending cuts may erode advances achieved inredistributing public expenditure towards the social sector. Well beyond this negativemoment - which, fortunately enough, most countries of the region will put behind themduring the course of 1999 - overcoming the "equity gap", in ECLAC's phraseof a couple of years ago, will continue to be the great outstanding task facing LatinAmerica at the beginning of the new century.