Social Development and Public Governance > Social Development > Urban Development
Urban Poverty
Urbanization has made it easier to satisfy some of the basic needs of the population of Latin America and the Caribbean, yet it has not reduced the overall problem of urban poverty. Although public services are more abundant in urban areas, the higher cost of living and lower and unstable incomes push most of the population into poverty, limiting their access to the goods and services offered in the cities. During the last three decades, the number of poor urban residents has increased significantly, from 44 million in 1970 to 125 million in 2000, whereas the number of rural inhabitants living in poverty has remained stable at approximately 78 million. Urban poverty is increasing as a result of the rise in informal urban employment (which, in turn, results from the inability of the region's economies to generate sufficient formal employment). In certain cases, the informal sector, which concentrates mainly in service activities, represents up to 73 percent of the urban labor market. The main challenge facing Latin American and Caribbean cities is how to incorporate this informal workforce into the formal economy, where wages, social protection and productivity are higher, or, alternatively, how to improve the productivity, income and level of protection of informal employment.
Urban poverty is characterized by significant and multiple deficiencies whose main dimensions include:
- Insufficient or unstable income, which leads to inadequate consumption;
- Risks caused by deficient access to basic goods and services;
- Low-quality housing that leaves residents more vulnerable to critical sanitary problems, contamination, crime and natural disasters; and
- Discrimination and limited access to the formal labor market, in particular for women and ethnic groups.
Solutions to these problems require multi-sector interventions coordinated in the impoverished neighborhoods. Acting in coordination with the Poverty Unit and other teams in the Sustainable Development Department, the Social Programs Division works to understand the multiple dimensions and characteristics of urban poverty, principally those that affect the inhabitants of central areas, and to identify effective policies that address the most urgent concerns. Technical studies and best practice analysis on these issues support Bank loans to rehabilitate central areas and upgrade neighborhoods.
Last updated: 01/16/07
