Social Issues

Central America: Land of poverty, social inequality

Panama City, Jul 19 (EFE).- Luxury high-rises and modern, ostentatious residences located just a stone’s throw from precarious slums and makeshift dwellings. Pristine streets in affluent neighborhoods situated near dirty, crumbling roads where homeless people dwell.

Such is the day-to-day picture in Central America, a sub-region that has one of the world’s highest levels of social inequality and is a microcosm of the broader Latin American and Caribbean reality.

Home to around 50 million inhabitants, Central America had already been experiencing stagnant growth even before pandemic-triggered lockdowns exacerbated existing inequalities and sparked a deep socioeconomic crisis.

The yawning wealth gap in those countries is attributed to the concentration of power in the hands of the wealthy few, an elite who safeguard their own interests and block socioeconomic reforms; criminal, political and social violence; and fragmented and largely ineffectual social welfare policies, according to the United Nations Development Program’s deputy resident representative in Panama, Aleida Ferreyra.

Many in Central America live below the poverty line, including 73 percent of the population in Honduras and 60 percent in Guatemala, according to government data and figures from multilateral organizations.

The poverty rate stands at 26.2 percent in Costa Rica, 22.8 percent in El Salvador and 12.3 percent in Panama.

In Nicaragua, 52 percent of the population was living in poverty and 22 percent in extreme poverty at the end of 2020 due to the impact of the Covid-19 pandemic, according to a report by the Economic Commission for Latin America and the Caribbean.

The Central American countries also fare poorly in terms of their Gini coefficient, which represents the income inequality or the wealth inequality within a nation or a social group.

On a scale of 0 (perfect equality) to 1 (maximal inequality), all but one of the Central American countries scored between 40 and just over 50 – among the highest in world – in the years 2019 and 2021. The lone exception was El Salvador (38.8 in 2019).

According to the most recently available figures, Nicaragua’s Gini coefficient was 46.2 in 2014.

Costa Rica has long scored highly in terms of human development, but its poverty, unemployment and inequality indicators have all worsened in recent years.

The staggering level of inequality in Central America is plainly evident in the Honduran capital of Tegucigalpa, where people of all ages can be seen begging for money on the streets.

“And that inequality and poverty sends tons of young people into the violence economy,” the director of that Central American nation’s National Statistics Institute,” Eugenio Sosa, told Efe.

In Guatemala City, the contrast between the extravagant wealth of a select few and the poverty of the majority is palpable.

The cost per square meter of real estate in the affluent Cayala district on the capital’s outskirts can exceed $2,000, yet 10 kilometers (6.2 miles) away in Zona 18, a crime-ridden district that is a no-go zone for delivery services, its value is under $400.

The wide gulf in living standards is similar in Panama’s capital, where an upscale shopping center and a tower housing a Ferrari dealership are located near a low-income neighborhood that is home to artisanal fishermen.

In El Salvador, more than half of the population lives in overcrowded conditions (three or more people sharing the same room) and four out of 10 of those residences lack running water and have dirt floors and a roof made of sheet metal or another scrap material.

Inequality in Nicaragua is evident in that country’s significant purchasing power disparities.

Shoppers at supermarkets in residential areas, for example, can be seen filling their carts to the brim with merchandise, while poor people’s options are limited to buying two eggs or four ounces of cheese on credit at a corner store. EFE

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