Latin America And The Caribbean Poverty And Labor Brief June 2013

Latin America and the Caribbean (LAC) have made laudable progress in the past fifteen years in reducing poverty, building the middle class, and promoting prosperity for all levels of society. Recently, the World Bank announced a twin strategy for going forward: (1) to end extreme poverty at the global level by 2030; and (2) to promote shared prosperity. This brief reviews LAC's progress toward these objectives, outlines the continuing challenges, and proposes a policy framework for keeping the region on its upward arc and picking up the speed. The World Bank's indicator of shared prosperity underscores that recent years' economic expansion in LAC has benefited the less well-off. But despite LAC's strong gains in shared prosperity, going forward it faces significant hurdles to delivering the sustained high levels of economic growth and welfare gains that many other regions of the world have achieved. Reform agendas that are underway in a number of the region's countries are helping acclerate shared prosperity. The region now needs second-generation reforms that will reinforce the "virtuous cycle" of economic growth and equity to foster shared prosperity. This brief highlights four important policy themes that LAC vountries should consider to keep on track in the years ahead.