The Impact of Globalization on the Poor in Latin America

This paper consists of four parts following an introduction. Section 2 analyzes and describes the main channels (transmission mechanisms) through which the process of globalization affects poverty directly and indirectly. Section 3 reviews the major effects of globalization on the Latin American economy - keeping in mind that few generalizations can be made with much assurance. Section 4 focuses on 13 case studies of the impact of globalization within different Latin American settings undertaken under the auspices of a UNU/ WIDER project directed by the authors. These case studies reveal clearly how the effects of different manifestations of globalization on poverty tend to be context-specific. In general, the main globalization channels appeared not to have been able to reduce overall poverty in the region. Between 1981 and 2004 growth was anemic and its pattern was not pro-poor, instead bringing about greater income inequality. The transfer of technology tended to benefit the skilled workers and hurt the unskilled. The one ray of hope in an otherwise bleak picture consists of the safety nets and social protection schemes implemented in an innovative fashion by some of the larger countries in the region.