Wednesday, March 01, 2017

Chile as a model for development?

Chile does not make as much news as another South American country namely Brazil. Though Chile is much smaller than Brazil, Chile is performing better under many economic parameters. One distinguishing feature of Chile is its rapid development in terms of reducing absolute poverty. Yet, in the process relative poverty has become more acute.

The Economist sums it up beautifully:

"Chile is in many ways the most modern country in South America. Its institutions function reasonably well, its educational standards are among the highest and its levels of crime and corruption are among the lowest. Yet that has not brought equality. Although poverty has fallen sharply, income distribution is more skewed in Chile than in any other member of the OECD, a club of mainly rich countries (though not unusually so for Latin America). Just 5% of Chileans regard the distribution of income as “fair” or “very fair”, the lowest share in Latin America, says LatinobarĂ³metro. “It’s precisely because Chileans can see how wealthy their country is—from the Porsches and Maseratis in the streets of some areas—that they’re so angry about how that wealth is shared out,” says Marta Lagos of LatinobarĂ³metro."

Widening inequality may be unfair. But if it becomes unavoidable while pushing for the humanitarian cause of tackling absolute poverty, should we not say, "so be it"?

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