Publication: Poverty Traps in Argentina - Poverty and Equity Assessment
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2024-11-11
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2024-11-11
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Argentina faces persistently high poverty rates, which have shown an upward trend in recent years, despite increased resources aimed at mitigating poverty.
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“World Bank. 2024. Poverty Traps in Argentina - Poverty and Equity Assessment. © World Bank. http://hdl.handle.net/10986/42400 License: CC BY-NC 3.0 IGO.”
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Publication Argentina - Crisis and Poverty 2003 : A Poverty Assessment, Volume 1. Main Report(Washington, DC, 2003-07-24)Argentina has gone through a major crisis in the past year, resulting in severe social dislocations, and a reduction of welfare by its poorest. The collapse of the Convertibility Plan, the freezing of bank deposits and the default on foreign debts, and the resulting high inflation, falling output and exchange rate devaluation, carried with it severe consequences for the poor. The break with the Convertibility Plan also meant that the adjustment in the labor market, occurred more through wages, rather than by an increase in unemployment. Inflation reduced real wages substantially, and, unlike previous recessions, unemployment arose largely from the formal sector, with an increase in employment in the informal sector. Many of the middle class, faced with both declining wages and freeze on bank assets, moved into poverty for the first time, carrying characteristics somewhat different than the traditional poor, including higher levels of education. Households appear to cope through a variety of strategies, including the entry into the workforce of those not previously employed, and reduced consumption of food, and other products. The Government's response to move to a floating exchange rate, and the consequent reduction in real wages, has provided the basis for a potential recovery. The reduction in real public sector wages, and pension obligations with inflation, while nominal revenues increased, has temporarily provided for an improved fiscal balance. The government, however, still faces serious issues in fiscal, and financial sector management. And Government programs still do not provide an adequate safety net for the unemployed on a permanent basis. Safety net programs are costly and duplicate other programs. Smaller, inefficient programs should be combined. Educational services need to be maintained, particularly with regard to payment of teachers, as the welfare effects go beyond the immediate income levels of teachers; in the health sector, gradual implementation of an infant and maternal health insurance, and the definition of, and agreement on provincial health goals (with monitorable health indicators) seem to be two key initial steps towards more effective protection for the uninsured poor, including other chronic inefficiencies in the health sector. Longer term poverty reduction measures include policy reforms towards higher levels of employment, access to basic services by the poor by improving infrastructure, and, improved human capital, and their productivity.Publication Argentina : Sources of Growth, Seeking Sustained Economic Growth with Social Equity(Washington, DC, 2005-10)This report attempts to analyze selected topics, chosen in collaboration with the Argentine authorities, regarding the inter-linkages between economic growth, income distribution and poverty, as well as the respective roles of these factors in explaining the historical underperformance of the Argentine economy. The report aims to identify relevant issues for policy formulation and further economic work. Its emphasis is on longer-term structural factors which are thought to determine productivity and income distribution. The report is organized as follows. Chapter 2 briefly reviews the time-dynamics o f economic growth, poverty and inequality in Argentina. Sections of the chapter study the evolution of poverty and inequality. It is noted that inequality has increased dramatically, though not monotonically, since 1990 and, notably, increases in inequality were observed in periods of both growth and recession. Chapter 3 reviews the latest episode o f economic volatility in Argentina, a period that started with the sharp decline o f economic activity in 2002 and continued with a recovery since 2003. Special attention is paid to the impact of this recent volatility on economic growth, poverty and inequality. The sections study the social impact of the recent crisis and recovery; employing different methodologies to test whether the recent recovery was pro-poor. It also analyzes the recession and recovery at the sector level, while identifying the economic sectors that contributed most to poverty reduction during the latest upturn o f the economy. Chapter 4 then turns to a selected set of government policies that could help to deliver high economic growth. The section highlights the idea that macroeconomic stability is crucial to reducing poverty rates since the empirical evidence indicates that economic crises disproportionately affect the poor. Another major lesson from this section is that tax policy is not a good tool for redistribution in developing countries. Further it analyzes the potential impact of various trade initiatives on employment opportunities for relatively unskilled workers in Argentina; and presents the results o f a recent study on the returns to education for workers across income groups. Finally, it reviews some key issues involved in ensuring a favorable environment for private sector development.Publication Ukraine : Poverty Assessment, Poverty and Inequality in a Growing Economy(Washington, DC, 2005-12)This Poverty report is aimed at improving the understanding of poverty in Ukraine, and providing linkages between growth, the evolution of economic sectors, and poverty. The main findings can be summed up as follows: An absolute poverty line and a revised consumption aggregate -- jointly developed with Ukraine experts -- indicate that around 19 percent of the population lived in poverty by 2003. While in 1999 Ukraine had a poverty incidence higher than Poland, Russia, Lithuania, or Bulgaria, by 2003 it was the lowest compared with these countries. The overall improvement, however, has been paralleled by an increasing poverty gap between rural and urban households, reflecting the fast but unbalanced economic growth: The growth experience has not changed the rather stagnant level of employment. The improvement in labor markets are associated to gains in productivity and efficiency with resulting wage gains. There is also increased differentiation within workers since the fraction of underemployment has also increased, reflecting partly the subsistence agriculture, and precarious labor markets in some small towns. The combined effects of higher productivity but lower employment in commercial farms left real incomes in agriculture lagging behind other sectors. Rural areas had a slower reduction in poverty due to the combined effect of weather shocks, and restructuring in agriculture. The government has played a critical role in reducing poverty by increasing substantially the social insurance transfers. Other government transfers have become better targeted but still have very limited coverage. The reduction of poverty, however, provides a window of opportunity to reform the safety net system in order to effectively target the poor.Publication Poor People in a Rich Country : Volume 1. Poverty Report for Argentina(Washington, DC, 2000-03-23)The study presents an overview on Argentina's economic growth, income distribution, and poverty, mostly as of 1991, when the country underwent a period of adjustment, which remarkably led to a sharp inflation drop, to the privatization of state-owned industries, and to fostering foreign commerce, thus widening the economy. Nonetheless, the study points out that all of these adjustments affected the poor, particularly through labor demand, exacerbated by the slowdown of the growth process, resulting from the economic crises of 1995, and 1998. Recommendations include macroeconomic, and reform policies to allow rapid growth, and stabilize the economy, without inflation, for a substantial poverty reduction. The elimination of centralized, collective bargaining labor agreements, reduction of labor taxes, and severance payments, would prod a funded, unemployment insurance system, based on individual accounts, and thus, reduce the high cost of labor. Temporary employment, and extended programs should not be enforced under payroll taxes, to allow exceptions for small scale enterprise development. Accessibility of the poor to basic services should be enhanced, mainly through greater investments in education, and health care services. In addition, a strong system of safety nets is recommended, through the identification of expanding programs, to also provide emergency employment, and income during potential crises.Publication Poverty in Egypt 2008-09 : Withstanding the Global Economic Crisis(Washington, DC, 2011-06-11)The original aim of this poverty analysis, prepared in collaboration with Egypt's Ministry of Economic Development, was to help inform the country's development strategy and guide World Bank assistance in support of that strategy over the coming years. This objective remains nevertheless valid, although the timeframe for addressing some of the most critical issues, such as the high rate of extreme poverty, vulnerability, and food insecurity may now be accelerated. 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The increase in poverty closely followed the accelerating inflation during 2008 causing vulnerable groups to be particularly affected by the economic turbulence. Despite these setbacks, some of the gains from the rapid growth between 2005 and 2008 were sustained over the crisis period. Policies aimed at helping households withstand the effects of the crisis were however not sufficient to prevent an increase in poverty. The crisis exposed underlying vulnerabilities in Egypt s social protection system. Finally, the adverse effects of food price shocks on the real incomes of Egypt s poor point to the need for further analytical work on labor markets, in particular wage policy, as part of the social risk management framework.
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