Poverty in Latin America and the Impact on Society

Latin America

Both social and financial inequality has been a contentious issue within society for decades. Poverty, particularly in Latin America has been a large issue as countries become industrialized. As many Latin American countries develop, the poverty gap becomes wider. Many rallies, protests, political movements and government upheavals have been centered on the issue of inequality. Currently, the problem is exacerbated by the economic struggles of many around the world. As many economies become global in nature, so too do there interconnectedness. A fiscal or monetary policy in one nation will have adverse consequences for an unsuspecting nation in another. We need not look any further than the current economic calamity within Europe as proof. In the United States and abroad nations are taking defensive action in the event of a Euro zone default which would have cataclysmic consequences for the global economy. Even more profound is the nature of inequalities as a result of this new found global economy. Latin America is no different in this regard as many of its fortunes, and thus its inequality are correlated to the global economy. As such, it is my belief that Latin America's poverty corresponds directly to the interconnectedness of the global economy, the demand for goods and services within its borders, and the overall structure of the country (Barrientos, 2009).

To begin, I believe it prudent to discuss why inequalities exist to begin with. Poverty exist when one population of society has a distinct economic advantage over another. This advantage compounds over time, much like compound interest in the financial industry. As these advantages compound year after year, the gap between those who have financial stability and those who do not widens exponentially. These advantages come in the form of better schooling, better access to resources; having both parents to help raise a child, social-economic status, access to influencing figures in the community and much more. In this instance, as the compounding of these advantages occurs, the gap widens and people are subsequently burdened by financial pressures. This is what is occurring in Latin America. Further, inequalities exist when populations of people are dependent on one resource for financial wealth, and that resource is controlled primarily by a small amount of people. We see this in America as the top 20% of Americas wealthiest families own nearly 80% of the nation's wealth. The same can be applied to Latin America in the oil industry. Brazil in particular has oil reserves that are controlled by only a small handful of individuals. This has extreme implications on society as a select few control a disproportionate amount of the wealth. By controlling much of the oil, agriculture, and mineral operations within the country, a small amount of people have a profound effect on the rest of society (Blanke, 2011).