Colombia’s high level of inequality “is a core constraint to economic growth and social progress” in the South American country, according to the World Bank.
In a report, the international financial institution said that Colombia had the second highest level of income inequality in Latin America and the Caribbean after Brazil in 2018.
World Bank
According to the World Bank estimates from before the Covid-19 pandemic, Colombia’s richest 20% earned more than half of all income made in 2019.
Colombia’s wealth gap
The economic shock caused by the pandemic “has increased inequality further,” said the World Bank, and pulled “3.6 million more people into poverty.”
Born unequal
Income inequality is even more extreme between men and woman, according to the report, which claimed that “a woman in Colombia is 1.7 times more likely to be unemployed than a man.”
The lack of social mobility in Colombia additionally increases the chances that children are unable to escape the poverty of their parents more in many other parts of the world.
World Bank
The effects of inequality are a major influence on a person’s happiness, the World Bank stressed.
World Bank
Tackling inequality “makes good economic sense”
The international bank stressed the importance of reducing inequality in Colombia, claiming that “a more equal society would mean better lives for all.”
In its report, the World Bank contradicted the former director of Colombia’s banking association, Santiago Castro, who said last month that closing the wealth gap was “the favorite banner of our Latin American populists.”
Former banking association president Santiago Castro
World Bank
Closing gender gaps alone “would increase Colombia’s GDP per capita by an estimated 14 percent by 2050,” according to the World Bank.
In order to close the wealth gap and promote economic growth, the international financial institution urged immediate policies that would increase Colombians’ access to child care and education.
Additionally, the World Bank urged an expansion of social programs to decrease poverty.