Colombian families take up to 11 generations to get out of poverty: OECD

In the last few hours, the Organization for Economic Cooperation and Development (OECD) published a report on the economic outlook in Colombia for February 2022 and, although there are positive points of economic recovery following the crisis caused by the covid-19 pandemic, Colombian families bear the brunt of it, since even the great-grandchildren of those Colombians who are poor today will be affected by scarce resources.

Among the most important conclusions of the report, it should be noted that Colombia is one of the most unequal countries with the lowest labor productivity in Latin America. Despite this, the organization acknowledged that the country has managed to recover positively after the pandemic thanks to efforts in new social policies and programs.

“The Colombian economy has recovered remarkably from the COVID-19 crisis, and a strong response from monetary and fiscal policies has managed to prevent a further contraction in revenues,” the summary of the report presented on Wednesday, March 30, at the National University, highlights. But they stressed that “in the longer term, both growth and social inclusion are trapped by weaknesses in structural policies, which prevent more than half of the active population from accessing formal employment and social protection.”

Jens Arnold, chief economist of the OECD in Colombia, presented this report, noting that at the fiscal level the OECD sees a positive picture of recovery, as its GDP growth forecast for 2022 stands at 5.5%. However, the most negative aspect of the report is that Colombia has one of the highest levels of poverty, income inequality and labor market informality in Latin America, which also affects future generations.

The economist explained that “in the OECD average, the path for a person who is born in the bottom 10% of the income distribution, until reaching the median income of society, is about 4-odd generations. In Colombia, there are more than 11 generations.” This is due to an uneven picture to which figures such as only 5% of Colombians pay income tax and that VAT benefits really favor those with the most resources.

For the OECD, the problem of Colombians inheriting poverty for more than 10 generations is also a reflection of the lack of educational opportunities. “Having recorded one of the longest school closures in the region and in the OECD, serious educational inequalities that existed before the pandemic are likely to widen even further... only 50% of children between 3 and 5 years old have access to preschool education,” the organization explained in its report.

The shocking thing about the case is that this statistic has been occurring in Colombia since 2018, that is, for 4 years it has been pointed out that poverty has been inherited in Colombia for up to 11 generations. At that time, the number of generations needed to overcome poverty in Latin America was organized like this, Colombia (11), Brazil (9), Argentina and Chile (6); surprisingly, the situation seen in that year is still maintained in all cases.

The OECD report also highlighted that 60% of workers in the country are in a situation of labor informality, which excludes them from access to social security and reduces productivity and tax revenues, and that half of the population over 65 does not receive any type of pension. In addition, they warned that school dropouts increased especially among minors belonging to disadvantaged socio-economic backgrounds.

And while noting that most of the poorest households in the country lost approximately 30% of income in the midst of the pandemic, the OECD also positively noted that unemployment has fallen and stands at about 1.5 percentage points above the level at the end of 2019.

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