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Article Excerpt
Central American governments continue to invest less than the average for all of Latin America in social spending, the UN Development Program (UNDP) said in its Second Report on Human Development in Central America and Panama.
For 1990-1999, per capita social spending in the region was US$187, "a level that continues to be very low, within the Latin American context, and which represents just 10.7% of total regional GDP, an equally low figure." The region reached this level only by increasing social spending during the decade of the 1990s.
El Salvador ranked fourth lowest in social spending at US$82 per capita. In comparison, Panama spent US$642 and Costa Rica spent US$622. In absolute terms, Nicaragua and Honduras spent the least, at US$57 per capita.
In spending more than US$600, Panama and Costa Rica fell into the "high to medium high" category. Breakdowns for individual countries showed that Guatemala, Honduras, and Nicaragua concentrated most of their meager spending in education, while Costa Rica spent mainly on social security, health, and nutrition. Panama focused on health and nutrition.
Thus, the isthmus has two of the highest- and the four lowest-rated countries in social spending, which the report says "reflects in good measure the effort that societies make to improve the level of life of citizens. This variable is fundamental to explain the levels of human development reached by the Central American countries long term, because there is a direct correlation between the magnitude of that spending in a given period, and the improvement, medium and long term, in the situation of individuals and their families." The study finds it "imperative" to increase social spending or investment to accelerate human development in the region.
Mixed economies, mixed results
In health care, the study found that spending in the region is concentrated in the private sector. Private investment accounts for half the totals, public insurance systems for 30%, and governments spend 20%. El Salvador, Guatemala, and Honduras all have mixed, predominantly private systems in which access to health care is paid for mainly out of pocket.
Regionally, spending on health amounts to 7.5% of GDP, 4% public, 3.5% private, but for Guatemala, El Salvador, and Honduras, private spending predominates. About 8.2 million people, fewer than 25% of the population of the region, are covered by public health insurance, and more than 50% of these are in Panama and Costa Rica. In Guatemala, El Salvador, and Honduras, fewer than 15% are covered, and in Nicaragua, fewer than 10%. Says the report, "Inequality in income distribution is prejudicial for the health of the entire population, not only of those of least earnings."
A widening gap
While Costa Rica stands at the head of the list in social spending, it is also the country in which the breach between rich and poor is accelerating at the greatest rate. With the richest 10% of the population controlling 30% of the wealth, however, the country...
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