Reducing Poverty: Recognizing the Poor is Probably a Good First Step

Wow, to see China as a model for poverty and social policies is quite interesting considering the recurring human rights violations the ruling party is consistently accused of. Yet, in a recent discussion of poverty in Latin America and proposed next steps China`s obsession with lifting nearly 250 million Chinese out of poverty via economic growth was pointed to as a guiding light.

 China basically used the state to create formal sector employment. Latin America in contrast has not been able to replicate this on a massive scale. Couple this with a reliance on commodities for growth and trade, a lack of economic diversity relegates the region to boom and bust periods.

 Chile is often pointed to as a replicable model in the region but cynics are quick to point that copper exports, the power behind the small South American nation is in fact not open to liberal markets and controlled by a nationalized state firm. Take copper out the equation though and liberal markets are a norm in Chile. The country is quite open and the only reason copper has remained nationalized is because Codelco is very well run. Sure, not the norm for many nationalized state industries in Latin America, but this is indeed the exception.

Above all poverty reduction needs to be a country obsession. China still has a massive amount of people living in poverty, but we have models such as South Korea that indeed used public and private markets to lift themselves into “developed world” status. Chile is small in relation to many Latin American countries and does not have a large native, indigenous underclass that other nations such as Peru, Bolivia, Ecuador, and a host of Central American countries have. Social inclusion continues to be the hot topic in these nations without which will make it difficult to unite an entire nation around reducing poverty. If the wealthy and those in power do not choose to even recognize the poor, we indeed have a bigger issue at hand.

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