Latin America’s poor countries

Question

The United States has long drawn immigrants from Latin America. This is often due to the lack of economic opportunity in their home countries. We wonder: Which of the following countries primarily in Central or South America has the lowest median income?

A Brazil is not correct:

The median daily income in Brazil is $11.40 (per person, at the middle of the income scale), according to estimates from the Center for Global Development. That gives Brazil, the region’s most populous nation, the fourth-highest median income in Central and South America.

At the bottom end of the national income spectrum, 4.3 percent of Brazilians — or less than one in 20 — live in extreme poverty (as of 2015). The World Bank defines extreme poverty as living on $1.90 per day or less.

One measure to break the long cycle of continued generations living in poverty in Brazil was the introduction of the Bolsa Familia program in 2003. The program ties the payment of cash benefits to families to their keeping their children in school and sending them for preventive health care checkups.

At the time of the program’s introduction, 12.7 percent of Brazilians lived in extreme poverty — three times the current level. After the first 10 years, it was helping 14 million households, reaching a quarter of the population. Claiming budget constraints, Brazil’s new government has made deep cuts to the program. 1.2 million families were removed from the program between mid-2016 and mid-2017 — even though it costs less than 0.5 percent of GDP.

B Colombia is not correct: The median daily income in Colombia is $8.40 — one-quarter less than in Brazil. That gives Columbia, the region’s third-most populous nation, the eighth-highest median income in Central and South America. Meanwhile, 5.5 percent of Colombians live in extreme poverty, nearly half of what it was in 2008, according to World Bank data. The country is currently attempting to wind down a half-century of civil war. That civil war was in many ways intertwined with drug consumption in the United States and the U.S. War on Drugs.

Three other South American countries — Peru, Bolivia and Ecuador — have to contend with a similar set of challenges surrounding drug production and trafficking, as well as poverty.

Peru and Bolivia are doing better than Colombia in terms of their respective populations’ median income levels (at $10 and $9.30, respectively). Ecuador has a median income of just $7.80 per day — a bit lower than Colombia’s.

Over the past decades, many South American countries benefitted from the global commodity boom. Often, left-of-center political leaders had used the revenues generated by this boom to finance social programs to combat poverty. Given that the boom has ended, the countries now face tough budgetary choices.

C Mexico is not correct: The median daily income of the 124 million population of Mexico is just $7.10. However, while Mexico still faces broader economic development hurdles, just 3 percent of the population is living in extreme poverty.

In Latin America, Argentina, Uruguay and Chile are the only countries considered high-income countries. Median data are not available for Argentina at the national level. Uruguay’s daily median income stands at $17.90 per person, while Chile’s stands at $14.20. These three countries also have just 1.7 percent, 0.3 percent and 1.3 percent, respectively, of their population living in extreme poverty.

D Honduras is correct: The median daily income of Hondurans is just $4.60. That is the lowest median in Central or South America.

Worse, nearly one in five people — 17.8 percent — in Honduras live in extreme poverty. For Central and South American countries where data exist, Honduras has the highest such share of its population.

As a group, the seven nations of Central America have a combined population of 47 million, larger than Argentina’s 44 million, Latin America’s fourth-most populous country. Honduras, with 8.9 million people ranking just among the world’s 100 most populous nations, is arguably the country struggling the most among the seven nations. By comparison, some

9.5 percent of Guatemala’s population lives in extreme poverty, while the median daily income is $5.15. Nicaragua has just 3.6 percent of its population in extreme poverty, with a median income of $5.20. El Salvador’s median income is $7.20.

This contrasts with median daily incomes of $13 and $13.90 in Panama and Costa Rica, respectively. While the number of Mexican immigrants residing in the United States fell by 6 percent from 2007 to 2015, the number of immigrants from El Salvador, Guatemala and Honduras collectively rose by 25 percent.

The overall U.S. immigrant population rose by 10 percent during that span. Migrants are motivated to escape gang-related homicides at home or to re-unite with family already there. Many fled repression or war in the 1980s. Remittances from the United States

(or other wealthier economies) to family members in Central America totals $15.9 billion annually — a figure equivalent to nearly 8 percent of the region’s GDP.

Due to the Trump administration’s very restrictive immigration policies, people are increasingly resorting to migrating within Latin America — instead of to the United States.