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Latin America Makes Progress in Creating Opportunities but Lags Behind Rich Countries

May 13, 2010

  • Region has made progress in providing development opportunities, but gaps with rich countries remain, says 2010 Human Opportunity Index
  • Chile, Uruguay, Mexico, Costa Rica and Venezuela rank the highest with an average of 85 points out of 100
  • Personal circumstances still play an important role in determining children's access to basic services in the region

MADRID, May 13, 2010 - In an ideal world, gender, color, birthplace and family income are simply neutral circumstances that do not, in any decisive way, influence the future of an individual. In real life, however, these factors link to form an unjust chain of conditioning factors that plot the course of Latin Americans and weigh heavily on their chance to access basic services such as education, health, or electricity, which are keys to unlock opportunities.

In the past few years Latin America has gravitated towards such an ideal world but still has not fully embraced it, according to the Human Opportunity Index (HOI) 2010, which measures how much progress the region has made in the universalization of access to basic services. Equitable provision of such services would ensure a leveling of opportunities for its residents, and, therefore, help predict the probability of their leading productive lives.

The study 'What opportunities do our children have? Report on human opportunity in Latin America and the Caribbean 2010', presented to a European audience for the first time at a ceremony at Casa de América in Madrid, offers “cautious hope” while concluding that “Latin America and the Caribbean countries have made progress in opening the doors to development to everyone, but still have a long road ahead.” It also warns about the opportunity gap between the region and rich countries, especially in Europe and North America, despite significant progress made in several countries thus far.

“When we compare ourselves to rich countries it is clear that even Latin American countries providing morest opportunities than others in the region are still lagging behind the worst performing rich countries,” said World Bank Economic Policy and Poverty Reduction Director Marcelo Giugale who presented the report at an event attended by Chile’s former president Michelle Bachelet, Spain’s Director of International Finance at the Economy Ministry, Maria Jesus Fernandez.

According to the study –now in its second edition- the region’s human opportunity index has risen in the past 15 years at the a rate of one percentage point per year, which can delay universal access to basic services for all Latin Americans for an entire generation, or 24 years –a scenario that the report’s authors describe as “inadequate”. Personal circumstances -such as birthplace and their parents' education- still play an important role in determining children's access to key services in the region, the paper states.

Nevertheless, the report conveys a certain degree of optimism in noting that all countries in Latin America and the Caribbean have improved their human opportunity index in the past 15 years, with Chile, Uruguay, Mexico, Costa Rica and Venezuela averaging higher than 85 points—out of a total of 100. Mexico, it says, grew at the fastest pace in terms of the index, while Chile had the best performance, with an HOI of 95, and Honduras the worst with 51.

Brazil, Mexico Making Big Strides
Some countries have greatly expanded access to specific services, but not to others. Jamaica, for example, has the highest HOI in education, but ranks only average in housing. The report estimates that Brazil and Mexico may be able to universalize access to water, electricity, and sanitation during the next decade.

The HOI measures provision of basic services, and its equal distribution, on a scale of zero to 100. A score of 100 means a country has achieved universal coverage.

In order to establish a framework for the HOI ranking, the study examined statistics for drinking water, electricity and sanitation, as well as school attendance and timely completion of the sixth grade -all considered key factors for individuals to achieve their full potential in life. The data is representative of more than 200 million children in 19 countries over the past 15 years.

Latin America also comes up short when compared to industrialized countries.

Regarding quality of education, all Latin American countries rank below countries in Europe and North America, the report states. As far as the opportunity to access housing that is not overcrowded, only three countries in the region—Costa Rica, Chile, and Brazil—stand above the European average, while the rest lag five or more points behind.

The report takes into account the results of the OECD’s standardized PISA test (Program for International Student Assessment), and demographic information to build an educational HOI for 15-year old children around the world. This way, it measures the weight of personal circumstances in these children’s reading skills in key areas such as math and science.

“This gap exists not only because the advanced countries are providing more educational services but also because of the relatively unfair way in which these services are distributed in Latin American and the Caribbean. In the Latin American context, the wealthier the family, the better their students scored on tests,” the document states.

Governments can Further Improve Opportunities
Fortunately, there is much that the governments of the region can do to improve the opportunity indices for their citizens and to accelerate the universalization of basic services, says Marcelo Guigale.

“The development of thistool marks a new phase, where public policy can offer opportunities for individuals at each stage of their lives,” Giugale said. For example, he said, beginning with a child’s birth, the State can provide early childhood care --, such as nutrition and health, and other services –and then continue supporting the child through adolescence and its related challenges, and into adulthood, where property ownership is the first step to creditworthiness.

“This is a new, more promising way to conduct social policy, one that focuses less on making people equal and more on giving everyone the same chances,” he noted.

Former Chilean President Bachelet agreed on the importance of the human opportunity index for advancing development in the region.

“This [HOI] is a very useful tool for regional the leaders of the region, insofar as it generates a series of data that are essential and enables governments to focus social policies and programs on those sectors that most need them and allow us to equalize the level of opportunities,” remarked Bachelet, who during her administration was able to significantly improve the social indicators of her country.

The second edition of the study builds on the results of the 2008 HOI and also assesses the human opportunities inside 15 countries by analyzing regions, states, and cities, including 165 sub-national governments. The document emphasizes that there is a significant gap between the capital cities and the rest of the country, a gap that is wider in terms of basic infrastructure than in education. However, in the last 13 years that gap has narrowed, since seven of the ten biggest improvements occurred in areas outside the capital cities.