Posts

, , ,

5 Facts About Poverty in the Caribbean

Poverty in the Caribbean
The Caribbean is a region in the mid-Atlantic Ocean composed of island nations known for their easy-going lifestyle and beautiful weather. The Caribbean has everything that a tourist looking for the perfect beach vacation could want; from historical landmarks to world-renowned beaches and more, the Caribbean is a popular choice for vacationers of all preferences.

However, like many tourist destinations, the Caribbean has economically successful tourist towns bordering impoverished villages. The region boasts mansions of the world’s ultra-wealthy but also houses an astounding number of the world’s extremely poor. Despite the wealth that a healthy tourism industry can bring to a country and a people, many inhabitants of the Caribbean’s island nations experience extreme poverty. Here are five facts about poverty in the Caribbean.

5 Facts About Poverty in the Caribbean

  1. The Caribbean is one of the poorest regions of the world. Currently, about 32% of people in the Caribbean live below the poverty line. While one in three below the poverty line is already too many, it is not the highest rate of poverty in the world. However, because of the lack of economic growth, poverty in the Caribbean is worsening, and the Caribbean is on track to become the poorest region in the world as soon as 2050.
  2. Haiti is the poorest country in the Caribbean. Overrun by gangs, damaged by natural disasters and vulnerable to corruption, Haiti is a fragile nation. The economy often experiences crashes and has had an average of 2% negative growth over the last four years. Because of their weak economic state, people are ransacked by extreme poverty without hope of leadership or guidance from the government.
  3. Poverty in the Caribbean causes two challenges that ultimately lead to increased amounts of trafficking and other crimes — unemployment and institutional weakness. Unemployment in the Caribbean is high, averaging more than 7% across all of the countries, so many have to find ways to generate income other than a traditional job. In addition to relatively unsteady labor markets, Caribbean countries often suffer from corrupt or otherwise weak governments and unstable economies. Because these institutions are unreliable, Caribbean persons often have to resort to crime and trafficking to make money and stay out of extreme poverty.
  4. The massive dip in tourism that COVID-19 brought on shocked Caribbean economies and halted growth, even in the wealthier countries. Tourism makes up nearly a quarter of the Caribbean’s total GDP. The Caribbean depends on tourism to create jobs and continue the cycle of money in and out of the country. Because the pandemic nearly eliminated travel in all parts of the world, the Caribbean suffered from a huge cut in income for many consecutive months during the height of the pandemic. This hit to the economy increased poverty in all Caribbean countries, even those who had previously been on the road to economic success, including Barbados and Jamaica.
  5. The Caribbean depends on foreign investment to keep its economy alive. In 2021, Latin America and the Caribbean received nearly $143 billion in foreign investment. The COVID-19 pandemic decreased foreign investment because main investors like the U.S., the U.K. and Canada shifted resources from foreign investment to their domestic fights against the pandemic. An unforeseen lack of foreign aid shocked the Caribbean economy and caused many to fall below the poverty line. Since 2020, foreign aid has steadily increased but has not yet reached pre-pandemic levels and poverty rates have remained high.

Looking Ahead

Although the Caribbean is one of the poorest regions in the world with weak institutions, trafficking issues and challenges from COVID-19, the tourism industry offers these countries opportunities for economic growth. As long as the natural beauty of the region can be preserved, the Caribbean can expect a steady and even growing tourism sector that creates jobs and brings money into local economies. This sector has the power to bolster the entire region’s economy and decrease the poverty rate in many island nations.

– Suzanne Ackley 
Photo: Flickr

, ,

The Fluctuating Latin American Economy

Ups_and_downs_of_latin_american_economy
The Latin American economy has experienced a period of great fluctuation since 2010. Whenever there is good news, there seems to be an equal and opposite force of bad news applied. Constant fluctuation has curbed poverty and opened the door to the middle class, only to have that door slam close. There are several key points to consider as to why this is.

In the past decade, nearly 50 percent of those in poverty have risen above the poverty ranking. But many are still struggling to enter the middle class. Around 200 million, or over two-thirds of the population, are at a high risk of falling back into poverty.

To fully understand this, it is necessary to know how economic divisions are classed in Latin America. Twenty-five percent of Latin Americans are earning less than $4 USD per day and this is considered living in poverty.  Some 34 percent  earn between $10 and $50 USD per day and these individuals are judged to be middle class. When someone earns between $4 and $10 USD, they are part of the vulnerable class. This final group accounts for 38 percent of the population.

The UNDP disclosed this information in the 2014 Human Development Report; a report that uses data as recent as August 24 of the same year.

But not all news is bad.

The middle class of the combined Latin America and Caribbean grew from 21 percent to 34 percent equaling 81 million individuals in the time period form 2000-2012. The vulnerable population grew from 35 percent to 38 percent. The UNDP recognized poverty dropping from 42 percent to 25 percent over that same time period as a significant regional achievement.

Now, Jessica Faieta, the UNDP Director for Latin America and the Caribbean, says the good news might be running out unless a change is made.

“It is very clear that using the same policies will not provide the same results,” said Faieta. “More than ever, the region must invest in universal social protection, particularly in the most critical phases of life, as is the case with children, the elderly and youth entering the labor market.”

Other analysts agree with her conclusion. The region lacks critical social protection, a defense that has been pinpointed as crucial to long-term economic growth. Nearly 50 percent of the country lacks access to medical services, a retirement pension or a labor contract. If this is not amended, the region cannot be expected to grow at the same rate indefinitely.

– Andrew Rywak

Sources: UNDP, The Economist, BBC