Kim: Latin America's Social Gains Must Be Protected

The era of your social background, race, gender or country of birth defining the opportunities available to you is coming to an end in Latin America. That was the bold claim from World Bank Group President Jim Yong Kim in his speech to the Organization of American States (OAS).

In a conversation with OAS Secretary General José Miguel Insulza, President Kim set out the principal obstacles to advancing the region’s social gains in the coming years as well as reiterating the Bank’s support to helping overcome them.

Traditionally plagued by inequality, Latin America and the Caribbean have made great strides over the past ten years to redress the class balance. Today over a third of the Latin American population are considered to be middle class and extreme poverty in the region has fallen by half since 2003.

But in the face of slowing growth, this is no time to be complacent.

“While Latin America and the Caribbean have improved a lot in recent years, we could lose momentum unless we maintain- and deepen – our focus on inclusive economic growth,”  Kim stated.

More than 70 million people have been lifted out of poverty in the past decade as extreme poverty in the region dropped by half to 12.3 %. At the same time around 50 million people joined the ranks of the middle class, boosting the total to 32% of the population.

That said, however, the region is still far from being considered middle-class and social equity gains have already started to stall. To temper this decline, President Kim called on a series of key reforms to boost productivity and competitiveness, including quality of education, innovation. and modernizing infrastructure. 

Inclusion boosts prosperity

Inter-generational mobility has been a key sticking point in Latin America. Parents’ income has traditionally played a significant role in determining access to a quality education, health care and basic services, all deciding factors in how much they will earn in the future.

Conversely, social inclusion not only engenders more social inclusion, but also boosts prosperity.“Providing disadvantaged children access to a quality education raises their productive capacity and enhances social inclusion through higher employability,” explained President Kim.

“This, in turn, leads to higher growth, which provides people with still more resources to improve their quality of life,” And it’s exactly this higher growth which is so needed in the region.

At the turn of the century, the Millennium Development Goals focused on widening access to basic education and boosting attendance. But with enrolment up across the region, the next step will be to ensure that the education received really does set them up to succeed in a global labor market.

“We now have to step back and think not only about basic skills, but what does it take to generate innovation among a group of people, to build creativity,” Kim highlighted.

This is an area in which Latin America has been found to be sadly lacking. Close to two thirds of the region’s workers identify as entrepreneurs but a region-wide lack of innovation is curbing the growth and job creation potential of these new businesses.

Latin America is a region with more lawyers than engineers but in a globalized world, its science, technology, engineering and math professionals who are in demand. Consequently, redressing the focus of education and promoting technical education will be crucial if the region is to ensure the competitivity of the future generation.

In his most recent visit to the region, President Kim saw firsthand how even in one of the most remote parts of Bolivia, people are still connected to the wider world through smart phones and the web.

“Though excluded from economic progress and largely invisible to the rich world, the poor now are very aware of how the rich live. And with that knowledge they’re demanding more opportunity for themselves, especially for their children,” Kim described.

In order to achieve this, the region must learn how to best compete with South East Asia and India. This was the focus of a key question on the importance of technical education asked of Dr. Kim following his speech.

Speaking to a packed room of regional ambassadors, media and other development representatives, President Kim's speech was part of a monthly series of events organized by the OAS and was webcast live from Universidad de San Martin de Porres.