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Unformatted text preview: bia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Paraguay, Peru, Uruguay, and Venezuela. 69 Conclusions For almost all of the 1980s and 1990s, the number of poor and extreme poor in Latin America and the Caribbean rose. Despite the growth episodes observed in the nineties poverty rates stagnated. The number of poor climbed from 160.5 million in 1981 to 240.6 million by 2002, and of extreme poor from 90 to 114 million. Since 2002 the number of poor has decreased at unprecedented speed – so much so that in 2008 the number of poor is estimated to have fallen to 181.3 million and the number of extreme poor to 73 million. Hence, during the strong growth period 2002‐2008, almost 60 million people were lifted out of poverty, and 41 million left the ranks of extreme poverty. It should be noted that towards 2007 and 2008 there seems to be already a deceleration on the rate of poverty reduction. Unfortunately, the recent worldwide recession has put an end to that progress and the number of poor are now projected to increase. However, compared to past periods of negative growth, in most cases the current projected declines in GDP have not yet approached the largenegative shocks that Latin America experienced throughout the eighties and late nineties. The large shocks of the past averaged a loss in per capita GDP of 7.2 percent and generated increases in poverty rates that were, on average, 4 percentage points. And, historically, it has proved difficult for countries to recover quickly and get back to the poverty level that prevailed before the shock. On average it has taken 3 years to get back to the poverty level prior to the shock, for all but the smallest negative shocks.As of March 2009, only in Mexico and Ecuador are the projected declines in GDP for 2009 expected to be relatively large. Given the consequente larger increases in poverty rates it might take about three years to recovre from the povrety losses. More countries could be in similar situations as the worldwide recession deepens. If the projected growth rates are not yet at the level that has prevailed in individual countries in the past, what is noteworthy in this crisis is how it has hit all countries and how rapidly the projected growth rates are trending downwards. Whereas in 2007 and 2008, no country in Latin America was experiencing negative growth in per capita GDP, today 15 countries are projected to have negative per capita GDP growth in 2009. The downward trend in projections for Latin America are following the pattern observed in industrialized countries. Using elasticity estimates and the mean LAC Consensus Forecast for GDP growth , aggregate poverty rates are estimated to rise 1.14 points. That would result in 8.3 million more poor people than in 2008 in Latin America and the Caribbean. About half of those people that will fall into poverty are in Mexico, about a fifth in Brasil, and the rest are distributed in Argentina, Colombia, Ecuador, Guatemala and Venezuela. Aggregate extreme poverty rates are estimated to rise 0.53 points, increase that would generate a rise of approximately 3.6 million in the number of extreme...
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This document was uploaded on 11/14/2013.

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