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Latin America’s distribution of income and wealth has long been the most unequal in the world—but poverty and inequality have been falling consistently since 2000 in most countries of the region. What has changed in Latin America? Are the region’s governments more committed to equality than in the past? Have their tax and spending policies improved? Which governments are most committed? Which least? What policies and programs have been most effective in redistributing income? Are they sustainable? What is holding Latin America back from faster gains?
Over the last decade, Latin America has seen solid economic growth combined with decreasing (but still very high) income inequality – lifting millions of people out of poverty and fueling the rise of a not-poor-but-not-rich “middle” class.
Kenya has instituted a new tax that affects users of M-Pesa -- a widely popular phone-based money transfer service used by more than half of Kenya’s adult population. The new 10 percent excise duty on fees charged for money transfer services applies to mobile phone providers, banks, and other money transfer agencies. Operated by Safaricom, the largest mobile network operator in Kenya, M-Pesa accounts for the largest share of users of money transfer services. Users of M-Pesa products will therefore bear most of the impact of the tax.
One of the biggest experiments in development economics is about to begin on Honduras's Northern Coast. Honduras has altered its constitution to open the way to ceding a large tract of land to build a new "Special Economic Zone", modeled on NYU economist Paul Romer's idea of charter cities -- new cities, built up from scratch, where first-world institutions and third-world immigrants can meet and do business.
With rapid growth in emerging market economies in the last decade, millions of people have entered the new global middle class. That has created new consumer markets in Latin America, Africa, and Asia – a good example: Dunkin’ Donuts going to India – and sparked considerable interest in the global financial and corporate communities.
Last week, USAID finally published an external review on its activities in Haiti: “Independent Review of the U.S. Government Response to the Haiti Earthquake”. The report is dated March 28, 2011. Yes, 2011. It took over a year to post the document on the USAID website. The review was conducted by MacFadden and Associates – which operates an $80M Indefinite Quantity Contract from USAID. There are some frank and enlightening assessments of USG response and coordination, but very little discussion of aid accountability.