Access to markets for poor people

Progress towards achieving the Millennium Development Goals (MDGs) in Latin America continues to be mixed and substantial challenges remain, especially meeting the income poverty target. There has been some recent progress in achieving stronger economic growth. In the last 3 years growth rates have been in excess of 4 percent per year.

But growth rates are still lower than in other developing regions and population trends don't translate into substantial poverty reduction. Also, economic growth is important to achieve poverty reduction - but it’s not enough. Growth needs to be ‘shared’ if the poor are to participate in and benefit from it.

In Latin America, inequalities are stark and growth is very uneven. Some specific challenges include:

• Poor people can not derive enough benefit from the export sector (usually of commodities). This is because they don’t have access to land and capital and competition with China keeps wages down;
• Sometimes national and local governments have not paid enough attention to the needs of smaller enterprises. This means they struggle to gain access to markets, sources of finance, business support services and have difficulties dealing with red tape;
• Women and indigenous groups are often excluded from market activity, as are those small enterprises which, for a number of reasons, remain unregistered with local authorities;
• Poor people are often not represented in policy formulation, often leading to capture by big business as well as internal distrust and confrontation.

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The key priority in DFID’s regional approach to markets in Latin America is to strengthen the impact of the Inter-American Development Bank (IADB) and the World Bank.

The Latin America Markets and International Trade (LAMIT) programme uses two key tools to address these issues:

• financial resources
• and advisory support.

The financial resources include trust funds at the Banks, and funds managed by advisers in our offices in Brazil, Bolivia, Nicaragua. Our advisers in the region, and in London, work closely with the Banks on markets issues, and we have also placed a secondee at the IADB, working on trade and poverty.

Besides the LAMIT programme, DFID has been engaging on markets issues through its bilateral programme in Nicaragua.

• Read more information on the PEMCE programme (in Spanish) and the LAMIT programme

In addition, we have recently established a regional programme aimed at improve dialogue in the region on trade-related policy issues, the Latin America Pro-poor Trade (LAPT) programme, run by ODI.

• Read more information on the LAPT programme

Last updated: 22 November 2007