Economic divide
A post yesterday discussed the positive trend of a growing middle class in Latin America. However, the region remains one of huge contrasts and inequality. Latin America remains the world's most unequal region, with a Gini coefficient of around 0.5. Argentina, Brazil, Chile and Mexico all have Gini coefficients of considerably over 0.5; Brazil's is 0.57. The picture below is from Caracas, Venezuela - where despite Chavez's "revolution for the poor" the Gini coefficient has increased from 0.44 in 2000 to 0.48 in 2005.
Update: See more comments on this post. 1) Yes, 'despite' was meant to be ironic. 2) Yes, use of those years for Venezuela is biased - but all such figures always are. 3) The updated figure I could find for 2006 was .45. 4) People seem to forget that Gini is a technical measure of income inequality, not overall poverty levels.
For more on the current state of Venezuela's economy I would suggest this post by Mark Turner, who argues that Venezuela remains a petrodollar junkie and that other parts of the economy are as lackluster as ever, and this CEPR paper, which sees a strong economy which has greatly reduced poverty levels and is not headed towards an oil bust. Decide for yourself.
Labels:
Development,
Economics,
Latin America
2 comments:
Noted: Yes, there are many technical arguments against the Gini coefficient.
Latin American figures also use income to calculate the Gini, when expenditure would be preferred.
Part of it has to do that after soon nine years of chávez´s “socialist government” gas is sold at less than 12 US cents per gallon, less that its direct cost of distribution and with this about 10% of GDP is transferred from those who have nothing to those who buy gasoline. Annual gasoline subsidies amount to US$ 3.000 per car.
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