Colombia is the joint fifth most unequal country in Latin America and the Caribbean, only surpassed by Brazil, Ecuador, Haiti, and Bolivia, according to the Regional Human Development Report released Thursday by the United Nations Development Program (UNDP) in Costa Rica.
The Gini index, a measure of inequality in income distribution, assigns countries a value between 1, indicating high equality, and 100, which indicates high inequality. Colombia currently has a Gini index of 55, in terms of per capita household income.
Uruguay is the most equal country in the region, with an index of 45, while Bolivia is the most unequal, with an index of 60. Paraguay, Honduras, Panama, Chile and Guatemala share Colombia’s score of 55. Venezuela is significantly more equal than Colombia, with a score of 48.
The most equal country in the world is Denmark, with an index of 27.
Latin America and the Caribbean is the most unequal part of the world, with ten of the world’s fifteen most unequal countries.
The report says that lack of equality is one of the major defining characteristics of Latin America and the Caribbean, commenting that “Very high and persistent inequality, accompanied by low social mobility, have brought the region to fall into a trap of inequality.”
Isidro Solaga, regional coordinator of the report, told EFE that the problem is largely due to a “generational legacy and the poor design of public policies, which in most cases have been limited to fighting poverty.”
Many countries in the region have “asymmetric” tax systems, which reinforce the problem, says Solaga, with a heavy tax burden on consumption rather on income.
This is relevant to Colombia, where Cesar Caballero, local co-ordinator of the UNDP’s report, calls the fiscal system “inequitable” because “it is based more on consumption tax, much less on income, when it should be otherwise.”
However, according to chief economist and regional director of the UNDP Luis Felipe Lopez-Caiva, “We must go beyond interventions to reduce poverty, and formulate and implement policies aimed at reducing inequality.”
The report also revealed that Colombia has had a significant degree of success in reducing poverty in recent years. The Andean’s score on the Human Development Index (HDI), a scale developed by the U.N., rose from 0.715 in 1990, to 0.772 in 2000, and then to 0.807 in 2007. Venezuela, by comparison, started from a higher point, going from 0.802 in 2000 to 0.844 in 2007.
The HDI takes into account a combination of factors including income, education, health of the population.