Under AMLO, Mexico Continues among the Poorest Countries of Latin America: ECLAC

According to the organization, Mexico is poorer than nine Latin American countries, including Paraguay, Peru, the Dominican Republic, Brazil and Uruguay, and its progress lies above all in raising the minimum wage, rather than in social programs.

BOGOTÁ (Proceso).- During the government of President Andrés Manuel López Obrador, Mexico has remained among the poorest countries in the region and in 2022 it was only surpassed in that indicator by El Salvador, Argentina and Colombia, a study the Economic Commission for Latin America and the Caribbean (ECLAC)has shown.

According to the agency’s own measurements, which are based on income poverty, Mexico is poorer than nine Latin American countries, including Paraguay, Peru, the Dominican Republic, Brazil and Uruguay, which is the nation with the least poor in the region.

In ECLAC’s 2022 income poverty measurements, which appear in the organization’s Social Panorama of Latin America and the Caribbean 2023, there are 13 Latin American countries and Mexico appears in position number 10, while Uruguay and Chile lead the list. table with single-digit poverty rates of 4.4% and 8.1%, respectively.

Destitution amounts to 0.3% in Uruguay and 2.1% in Chile.

Panama (14.3%), Costa Rica (16.6%), Peru (17.2%), Brazil (19.6%), Dominican Republic (20.4%), Paraguay (21.1%) and Ecuador (25.7%) appear with less poverty than Mexico.

With the highest rates of population in poverty are El Salvador (29.8%), Argentina (30.1%) and Colombia (34.5%). In the 2022 measurement, nations with a high incidence of poverty do not appear, such as Venezuela, Nicaragua and Guatemala.

ECLAC estimates that income poverty in Mexico was 28.6% in 2022, while extreme poverty was 6.2%, lower percentages than those presented for the same year by the National Council for the Evaluation of Social Development Policy (CONEVAL).

According to Coneval, in 2022 multidimensional poverty in Mexico – which not only measures family income, but also their access to social services and the quality of their food – stood at 36.3%, while extreme multidimensional poverty in 7.1 percent.

Poverty expert and CONEVAL advisor, Fernando Cortés Cáceres, tells Proceso that the high levels of poverty that Mexico exhibits compared to most Latin American nations are related to the low economic growth that the country has had in recent decades.

“Mexico has grown very little and that has impacted poverty levels, which are high in the regional context,” says the doctor in social sciences from the Center for Research and Higher Studies in Social Anthropology.

He maintains that, in addition to weak economic growth, in Mexico there is a very limited redistribution of income due to the lack of a progressive tax reform, which burdens higher-income sectors more. C

He considers that this reform is still needed to advance equity and that “more effective” social programs are also required than those implemented by the López Obrador government, which “are not evaluated” by the government “and we do not know their real impact.”

The professor at the Center for Sociological Studies at El Colegio de México maintains that the universal pension for older adults and scholarships for young people have not had as much effect in reducing poverty as the increases in minimum wages, which have been higher than the inflation.

The Growth Trap

The Preliminary Balance of the Economies of Latin America and the Caribbean 2023, released this week by ECLAC, confirmed that López Obrador’s six-year term will be the one with the lowest economic growth in Mexico since the government of Miguel de la Madrid (1983-1988) , when the Gross Domestic Product (GDP) barely increased 0.3% each year on average, in a context of crisis in the region due to high debt.

During the López Obrador government, the Mexican economy will grow at an annual rate of 0.93% and the six-year term will end next year with the lowest GDP expansion rate in 36 years, according to ECLAC figures and projections.

For Professor Cortés Cáceres, this is what has determined Mexico’s limited capacity to deeply combat poverty and indigence, in which the country has the third highest rate in the region, after El Salvador and Colombia.

The Social Development professor of the UNAM Program of Specialties in Economics points out that López Obrador faced the crisis derived from the COVID-19 pandemic in 2020, when the Mexican economy collapsed 8%, but a year before the GDP also fell and had contracted and the recovery has been slower than in most Latin American countries.

He says that a similar situation occurred in the government of Felipe Calderón (2007-2012), when a mediocre growth of 1.75% per year was recorded after the global financial crisis of 2008 and 2009.

According to ECLAC figures, during López Obrador’s six-year term Mexico will have lower economic growth than that of all the governments of what he calls “the neoliberal period”, from Carlos Salinas de Gortari (1989-1994) to Enrique Peña Nieto (2013-2018).

For the UNAM economist, Emmanuel Salas, “these are very bad economic results for López Obrador, even worse than those of neoliberal governments, when growth, in general, was also very low.”

De la Madrid’s six-year term ended with the lowest economic growth that has been recorded in Mexico since El Maximato (1928-1934). The second lowest since then is that of López Obrador.

At the Latin American level, during López Obrador’s six-year term, Mexico will be the fourth country with the lowest growth, only above Venezuela, Argentina and Ecuador. Economist Emmanuel Salas, who is a researcher at the Center for Economic Modeling and Forecasting (CEMPE) at UNAM, points out that the low GDP growth accumulated in recent years is determined by the drop during the COVID-19 pandemic, but he emphasizes that thi crisis affected the entire region and the entire world.

“That year, the drop could have been much more moderate if the government had opted for anti-cyclical policies, to stimulate economic activity, but it opted for an orthodox, pro-cyclical policy, contrary to what many Latin American countries did to confront the pandemic“, he states.

And he says that the collapse of the GDP in 2020 weighs heavily on the economic result of the six-year term, despite the fact that in 2022 and this year the GDP has registered expansion rates above what was expected as a result of the increase in public spending, which has mainly aimed at financing pensions for seniors, the Mayan Train and the Dos Bocas Refinery, and the foreign investment that “nearshoring” attracts.

In ECLAC’s Social Panorama of Latin America and the Caribbean 2023, Mexico appears as the second country in the region that managed to reduce poverty the most between 2020, the year of the COVID-19 crisis, and 2022, with 8.8 points, 2.4 less than Peru. According to ECLAC, it also managed to reduce inequality measured with the Gini index, which went from .464 in 2019 to .441 in 2022.

​Original article in Proceso at http://tinyurl.com/bdhvp9t5

Translated by Schools for Chiapas.

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