Extreme poverty up in 2009 in Mexico, Central America

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IANS/EFE | 23 Jan, 2010
The number of people living under conditions of extreme poverty in Mexico and Central America rose by 800,000 in 2009, according to figures made public by the Economic Commission for Latin America and the Caribbean (ECLAC).

The head of that UN body in Mexico, Hugo Beteta, told reporters that this category includes people with income of less than $1.25 per day.

ECLAC announced that and other figures during Thursday's regional presentation of the UN World Economic Situation and Prospects 2010 report.

Among other estimates, that study predicts that the number of Latin Americans living in extreme poverty will rise by four million this year and that the Latin American and Caribbean region's economy will grow by 3.4 percent after contracting by 2.1 percent in 2009.

Beteta also said that the number of poor people across Latin America climbed to 189 million last year, compared with 180 million in 2008.

Mexico alone has more than 50 million living in poverty, roughly 45 percent of the population, according to official figures, which state that between 2006 and 2008 the ranks of the poor expanded by five million.

The UN report also revealed that the unemployment rate climbed last year in Latin America to 8.5 percent and that informal employment also rose.

Unemployment had a bigger impact on men than women because sectors like construction and manufacturing were hard hit while the service industry was less affected.

With respect to Mexico, ECLAC said there was a big increase in informal employment, up by 28 percent, or approximately 15 million people.

"While unemployment continues to rise, it's very difficult to say that we've emerged from the crisis; there are still signs indicating that we can't be complacent whatsoever," said Roberto Vos, development analysis and policy director at the UN's Department of Economic and Social Affairs.

Vos was commenting on recent statements by Mexican Finance Secretary Ernesto Cordero, who recently suggested the country had already emerged from the global economic crisis.

The country was especially hard hit in late 2008 and early 2009 by a drop in exports to the United States.

Although Latin America has cause for "prudent optimism" this year from an economic standpoint, the region must devote a lot of attention to fighting poverty and maintaining internal demand, Beteta said.

He noted that Mexico's "tax burden is low by Latin American standards, which means public investment is low at this moment in time".

Mexico suffers from "severe restrictions on access to credit", Beteta said, adding that greater investment in the oil sector is needed and that a strategy to diversify exports must be discussed.

ECLAC also reported that remittances sent to Mexico by emigrants - mainly in the US - fell by 16 percent, or $3 billion, between January and November 2009.