[Latin America] Poverty cited in swing to left

From Chron

Blunt report by S&P emphasizes income inequality in Latin America

By PEDRO NICOLACI DA COSTA
Reuters News Service

Persistent poverty and income inequality despite two decades of economic reforms help explain a political shift to the left in Latin America, credit agency Standard & Poor's says.

In a report on Tuesday that was unusually blunt about the ramifications of vast social disparities in the region, S&P admitted that the very economic policies that it espouses had not done much to boost social indicators in the region.

"Latin America still shows very high levels of poverty and the most unequal distribution of income in the world," said Sebastian Briozzo, an analyst at S&P. The richest 10 percent of the Latin American and Caribbean population earn 48 percent of total income, while the poorest tenth earn 1.6 percent, according to the World Bank.

"Strengthening the social contract in societies with pervasive poverty and highly unequal distribution of income will continue to challenge many Latin American governments for some time to come," S&P's Briozzo said.

Left-leaning leaders of all different stripes have been gaining ground throughout the region in recent years.

Most recently, Bolivians elected Evo Morales, an anti-capitalist former coca grower. About 63 percent of Bolivia's population lives below the poverty line. But other leftists have already been in power for a while, perhaps most noticeably Hugo Chavez in Venezuela.

In Brazil and Argentina, too, leftist parties, albeit of a more moderate sort, have been in power for a number of years. And in upcoming elections this year, leftists are leading the polls in Mexico and Peru.

Brazil is the world's second most unequal country in terms of wealth distribution, just behind Sierra Leone, according to a 2003 survey by Brazilian government research agency Ipea. The richest 1 percent of Brazil's population has the same combined income as the poorest 50 percent, the survey showed.

Luiz Inacio Lula da Silva, the country's first working-class president, vowed to make poverty his top priority but has been criticized for favoring the same policies he had fought as a member of the opposition.

The report also found another reason for the left's success was a broader political process that allowed for a wider range of views to be aired at the polls.,/span>