The MDG Report Card 1. At the regional level, region s performance in attaining the 9 MDG targets (Figure 1) is impressive but like most other regions, it is also lagging significantly on the maternal health and access to sanitation-related MDGs. 2. At the country level, the region s starting position was already close to the MDG goals. However, it is still lagging on the MDGs-related to health and sanitation. No country has achieved the maternal health related MDG and only Peru has met the infant mortality related MDG. Only 14 countries have achieved the MDGs related with access to safe water, and 10 countries with access to sanitation. This is mostly due to slow progress in the last few years. 3. The report card for a set of 30 countries shows that only 14 Latin American countries have either met or made sufficient progress to achieve the MDG related with extreme poverty reduction and only 18 have achieved gender parity in primary education. Rural-Urban Disparities 1. Urbanization is a powerful pathway for a country from low to middle income status. The region is highly urbanized and has successfully reduced the share of the population below $1.25 a day from 12 percent in 1990 to 6 percent in 2010. In 2010, 32 million people lived in extreme poverty in the region. 2. People and poverty are located along a spatial spectrum with sparsely populated rural areas and dense urban areas at the ends and smaller towns in-between. Its urban poverty rate of 3 percent and rural 13 percent indicate that, in spite of a strong agricultural sector, poverty in Latin America is relatively rural. 3. Its megacities and sprawling slums notwithstanding, the majority of the urban poor in the region reside in small towns. In Brazil, one of the most urbanized developing countries, only 22 percent of population resides in megacities, and 64 percent in intermediate and small cities. Over 70 percent of the urban poor live in medium and very small towns, and only 9percent reside in megacities such as Rio de Janeiro and São Paulo. 4. Urban areas offer better paying jobs and basic services. The rural poor people are willing to migrate and pay to gain access to basic services. In Brazil, rural workers earning a minimum wage of about R$7 per hour were willing to migrate and pay R$420 a year for access to better health services, R$87 for better access to safe water and R$42 for access to electricity. 5. In addition to rural urban differentials, productivity differentials of about 34 percent between female- and malemanaged farms prevail in Latin America. Rural-Urban Dynamics and Policy Recommendations Several factors affect the challenge of narrowing rural-urban disparities in poverty and access to basic services. Rural to urban migration remains important and is the highest in Latin America and in East Asia. In 2011, 80 percent of Latin America s population lived in urban areas. Of the additional 112 million people in the region in 2030, nearly all will live in urban areas. More urbanized countries have had more success in attaining the MDGs. Income per capita rises as the share of the urban population rises. If urbanization is managed poorly, slums can emerge and derail MDG achievements. 25percent of LAC s urban population lives in slums. Women and children bear a disproportionate burden. MDG attainment. Because the MDGs reflect the basic needs of all citizens, governments in the region should aim to attain them fully in both urban and rural areas. Since rural areas have potential for income generating activities, any MDG attainment strategy must include policies that increase rural productivity through the introduction of new farm technologies and investment in the human capital development of rural residents; removal of land market distortions; improved connectivity with urban markets; and fostering of nonfarm activity. 1. As all rural poor cannot migrate to urban areas at once, the MDG-related services delivery challenge in LAC is to bridge the rural-urban differentials. In countries that have large rural sectors with agricultural potential, any MDG attainment strategy must include policies that increase rural productivity through the introduction of new farm 1
technologies and investment in human capital development of rural residents; removal of land market distortions; improved connectivity with urban markets; and fostering of nonfarm activity. 2. If affordability is a problem, prioritization is required. In countries where migration is significant, and population density in rural areas is low, boosting urbanization through better service delivery in large cities would make them more attractive, and speed up rural to urban migration. Delivering piped services (water and sanitation) in densely populated areas is more cost effective. According to a global study, on average, the cost of a cubic meter of piped water is $0.70-0.80 in densely populated areas compared with $2 in sparsely populated areas. To find better paying urban jobs, rural migrants would need to have basic education and be healthy. Public investment in primary education and health care should be directed to the poor in urban and rural areas. 3. In countries where migration is limited but population density is high, differentials in poverty and availability of basic services between poorly served rural areas and better served large cities are unlikely to shrink sufficiently. Progress toward the MDGs would be accelerated by delivering services primary education, primary health care, and piped services (access to safe drinking water and sanitation) wherever the poor are concentrated. 4. In situations where people are concentrated in small towns with little prospect of moving, policies should focus on improving connectivity with other urban centers. Measures to better connect the activities in small towns with the economies of large cities become paramount for the creation of nonfarm jobs. 5. A reduction in the number of slum dwellers is a dedicated MDG and needs a dedicated approach, especially in the highly urbanized countries in Latin America: land tenure, land pricing and connectivity of residential and commercial areas policies for slums should be consistent with corresponding policies for cities. Government should take advantage of slum dwellers willingness to pay for services, and low unit costs to deliver basic health and education services in cities to improve access to piped services in slums (public toilets and water to slum dwellers in creative ways such as putting water fountains in public places). 6. Governments can leverage the suite of macroeconomic policy instruments to spur urbanization through a coordinated approach that includes planning, connecting, and financing. a. Planning charting a course for cities by setting the terms of urbanization, especially policies for using urban land use and expanding basic infrastructure and public services. Strengthening the institutions for land management is key. A successful model is Bogotá (Colombia). Colombia has also been successful in providing universal access to water and sanitation in cities nationwide, mostly because of policy reforms that allow fees to cover almost all costs. b. Connecting making a city s markets (labor, goods, and services) accessible to other neighborhoods in the city, to other cities, and to outside export markets. Connecting firms and people with markets can only be successful if public transport is affordable. An example of a successful model of affordable public transport is Curitiba (Brazil). c. Financing finding sources for large capital outlays needed to provide infrastructure and services as cities grow and urbanization picks up speed. 2
Figure 1. (Developing countries, weighted by population) 3
4
5