Box 2.3

Download a larger version of this figure

Since the late 1980s, almost all Latin American countries have adopted far-reaching economic reforms. The resulting increase in economic openness has gone hand in hand with large financial inflows—particularly in the first half of the 1990s—and brought new sources of economic growth. Although overall growth slowed after 1995, strong growth has resumed in the past five years. With the exception of a handful of countries, this economic growth has been accompanied by relatively modest inflation.

Despite these positive results, virtually all La­tin American countries share similar problems: uneven economic growth, lagging agricultural growth, and, in certain cases, unacceptably high rates of poverty and malnutrition. More than 60 percent of the region’s poor live in rural areas, where slow economic growth, unequal distribution of assets, inadequate public investment and public services, and vulnerability to natural and economic shocks are major policy issues. The 2007–08 and the 2010–11 food price crises exacerbated these problems. Although the region was considered relatively stable and capable of absorbing external shocks, the food price crises significantly raised food inflation in most countries in Latin America and the Caribbean.

Before the crises, most countries in the region were on track to reach the Millennium Development Goal of halving the proportion of people who suffer from hunger by 2015; with the food crises, many countries experienced setbacks in their progress toward this goal. The impact has been greatest on net food-importing countries—specifically, Mexico and Central America—as well as on poor consumers in peri-urban and rural areas. When the food price crisis of 2007–08 hit El Salvador, for example, the food budget of a rural household bought only 56 percent of what it had bought 18 months before (WFP 2008). Such declines in food purchasing power are disproportionately felt by the poorest segment of the population.

The food price shocks hit a region where nutrition status is mixed. The average prevalence of child underweight in Latin America and the Caribbean is 4 percent, but in Guatemala and Haiti rates are 13 and about 19 percent, respectively. Rates of stunting for children under five are even more ­worrisome. The prevalence of child stunting is only 2 percent in Chile, but it is more than 27 percent in Bolivia and Ecuador; nearly 30 percent in Haiti and Honduras; and 48 percent in Guatemala.

Haiti, the poorest and most food-insecure country in the Western hemisphere, is still feeling the effects of the January 2010 earthquake, which killed more than 300,000 people and affected 3 million—about one in three Haitians. More than 1 million people lost their homes, hospitals and other crucial infrastructure were destroyed, the health system was greatly weakened, and food availability declined (World Bank 2010; Rosen et al. 2012). As a consequence, from 2009 to 2010 child mortality in Haiti more than doubled, exceeding its 1990 level (IGME 2011). Lack of access to food, shelter, clean water, and health services increased the risk of child undernutrition (World Bank 2010). Two years after the disaster, more than half a million Haitians still lived in tents and under tarpaulins in hundreds of camps (Oxfam 2012).