Latin America's poorest need new programs: World Bank

A homeless man sleeps on the table as other homeless men wait for breakfast in the dining room of the Sao Martinho de Lima Community Center, under the Guadalajara viaduct in the Mooca neighborhood of Sao Paulo February 22, 2013. REUTERS/Nacho Doce (Reuters)

WASHINGTON (Reuters) - Rapid growth in Latin America over the past decade still left one in five residents of the region living on less than $4 a day, the World Bank said in a report on Monday. The report, "Left Behind," for the first time studies those caught in chronic poverty from 2004 to 2012 in Latin America, separating them from "downwardly mobile" people who became poor after earning higher incomes in the past. Better understanding of people stuck living on such low incomes helps target aid programs, and is even more important now that the region's poverty reduction efforts are slowing with weaker economic growth, the report's authors said. The World Bank predicts Latin America's GDP growth will decrease to 1.7 percent this year, from a high of 6 percent in 2010. And the United Nations said in a report this year that poverty reduction has stalled across the region, barely budging since 2012. Of the 130 million people classified as chronically poor, many live in urban areas where they are harder to reach, even though past poverty reduction efforts focused on rural areas, according to the authors. Chronic poverty rates also vary widely across the region, from 50 percent in Guatemala to just 7.8 percent in Uruguay. Some of the poorest people are concentrated in particular regions in a country, like in Brazil's Ceara state, which has double the chronic poverty rate of the country as a whole. The World Bank study finds people stay poor not just because of a lack of education, health services or basic sanitation, but that psychology may also come into play. For example, a tuberculosis treatment and prevention program in Peru failed in some of Lima's shanty towns until the government introduced a component that included psychological counseling for depression. "Poverty can put you in a difficult state of mind, and a difficult state of mind can make it more difficult to escape poverty," said Jamele Rigolini, one of the study's authors. "This can be a self-reinforcing vicious cycle." The report suggests that conditional cash transfer programs - popular government schemes that funnel money to the poorest in exchange for keeping children in school and other conditions - may not be effective in reaching everyone stuck in poverty. "I think the region is ... moving beyond conditional cash transfer," Rigolini said. "They were not enough to lift many of the people out of poverty." (Reporting by Anna Yukhananov; Editing by Christian Plumb)