Latin Americans' climb out of poverty threatened; Years of progress are being eroded by soaring prices of fuel and grain.

from the Houston Chronicle

This shows the effect of rising rices i Latin America. The countries that are not large importers of oil have had the worst effects. -Kale

Byline: MARLA DICKERSON

SAN SALVADOR, EL SALVADOR - Are exploding oil prices about to burn Latin America?

With the largest petroleum reserves outside the Middle East, the region has been on a roll in recent years.

Record exports of crude oil, as well as grains, fueled economic growth not seen since the 1970s. The region's stock markets roared. Easier credit spawned a consumer class that snapped up homes and cars.

About 26 million Latin Americans climbed out of poverty between 2002 and 2006, according to U.N. data.

But the same forces behind that new prosperity are now, paradoxically, creating misery.

Surging fuel prices have ignited inflation throughout the region, driving up the cost of food, whose prices were already on the upswing thanks in part to ravenous global demand for Latin America's farm products.

In some countries, a gallon of gas now costs more than a typical day's wages.

The region's food prices have escalated an average of 15 percent over the past year, according to the U.N. Economic Commission for Latin America and the Caribbean. Prices of many staples have increased much more than that.

The increases are leeching workers' paychecks and eroding years of progress against hunger and indigence.

Food riots have erupted in Egypt, Cameroon and Burkina Faso, in West Africa. Poor consumers have staged demonstrations in India and Indonesia to protest cuts in fuel subsidies.

"There is a whole combination of factors that are putting a tremendous amount of pressure on the poor," said Carlo Scaramella, who heads the World Food Program in El Salvador. "We haven't had an economic shock of this magnitude in years."

Maria and Jose Lopez, who live with their three children in a two-room cinder-block house perched on a hillside in this gritty Central American capital, are among those feeling the strain.

Earlier this year, they scraped together $148.50 for a down payment on their own place in this hard-luck area, aptly named "Thin City." But their dream of home ownership has vanished. The new priority is simply to eat.

Like other low-income people, they spend the largest chunk of their wages on food. Eggs, rice and beans have all jumped by more than 30 percent in the past few months, cutting deeply into the family's $500 monthly income.

Jose, a laborer, pawned his wedding ring to buy groceries following a short bout of unemployment.

Maria, who works weekdays in the central market downtown, cadged a loan from her employer. She recently took a weekend job as a domestic.

They pulled the two oldest children - Laura, 14, and Kimberly, 10 - out of Catholic school. Only Bryan, 7, is attending classes. The family can no longer afford $17 a month tuition for each girl on top of their debts, child care and ballooning food bills.

GRIM FIGURES

In 2007, at least 500,000 people in El Salvador and Guatemala toppled into poverty, the United Nations' World Food Program estimates.

Across Latin America, an additional 15 million people could fall back among the region's 190 million poor if prices keep rising at their recent pace.

If gas and grocery prices continue their relentless climb, at least 100 million people worldwide may be sucked into the same downward spiral, the World Bank estimates.