Pedro Conceição is the Director of the Human Development Report Office. Economist by training, his career has included several leading positions across UNDP, focusing on financing and shaping policies for development through the promotion of a global public good approach.

"A broad agenda on correcting inequalities in human development would be one of the priorities for Latin America and the Caribbean"

• You have held prominent positions in the United Nations Development Programme (UNDP) and have published studies on financing for development. You are also the lead author of several Human Development Reports. In your opinion, what are the main interventions needed to accelerate human development progress in Latin America and the Caribbean?

The Inter-American Development Bank, in its LACIR Initiative on inequality, pointed out just a few months ago that Latin America and the Caribbean is the most unequal region in the world, something that numerous studies had already indicated. In the long term, how does inequality affect Latin America and the Caribbean, and what strategies do you recommend to address it? 

Our analysis in several Human Development Reports over the last few years suggest that there are three areas in which Latin America and the Caribbean would need to consider to advance human development. 

The first has to do with the fact that there are segments of the population in Latin America and the Caribbean that are left behind when it comes to indicators of multidimensional poverty. In this sense, multidimensional poverty is often concentrated in communities such as indigenous peoples, in which multidimensionally poor people are overrepresented. 

Inequalities in human development include indicators such as income and wealth, so economic disparities that actually, to some extent and in many countries, have been declining. But the levels remain very high compared to other parts of the world. And inequality is also persistent when it comes to other indicators of human development associated, for instance, with health and education. Particularly when it comes to what we call enhanced capabilities, namely access to tertiary education, and completion rates in tertiary education, to name a few.

So a broad agenda on redressing inequalities in human development would be one of the priorities for the region, according to our analysis, and I would also emphasise the importance of redressing inequalities in potentially generating efficiency gains for the region.

Sometimes an agenda that is focused on reducing inequalities or addressing inequalities is seen as something that needs to be traded off against economic growth. But there's significant evidence that suggests that when inequalities are high, and in some cases persistent, reducing these inequalities, which also include gender inequalities, can also generate efficiency gains and can actually help with economic growth.

Just to give an example, we have data from the United States that show that if any racial and gender inequalities that persisted in the 1960s had not been reduced since then, growth in domestic product per capita in the United States would be 70% lower than what it is today. This shows how reducing inequalities in human development can also potentially generate economic gains for the region.

I think the second broad agenda has to do with the way in which the region addresses challenges related to climate change, the transition towards renewable energy and also how the region as a whole harnesses the potential that exists when it comes to biodiversity.

The region is very rich in biodiversity, and has immense resources like the Amazon that is shared by many of its countries. That can be maintained and leveraged once again to generate economic benefits for communities that live there. But this can be beneficial for the region as a whole, having the potential of harnessing nature-based solutions to go beyond mitigation of climate change, and also generate economic opportunities associated, for example, with the blue economy, taking advantage of resources that are related with the ocean. 

And third, and this is a challenge that is shared in many countries, relates to the fact that many societies in the region, as elsewhere, are becoming polarised politically. And finding ways of redressing this political polarisation is also important to enable countries, but also the region as a whole, to enhance cooperation in addressing challenges, both individual and shared ones.

 

• The Human Development Report 2023/2024 confirms that Latin America and the Caribbean is improving more than other regions, but has not yet recovered pre-pandemic levels. What factors have contributed to the region not reaching pre-pandemic levels of progress? How is the recovery going?

One of the striking findings of our latest human development report is that even though the Human Development Index in the region of Latin America and the Caribbean and globally is now increasing after a decline that is unprecedented, that occurred in 2020 and 2021, the path of improvement is below the pre-2019 trend. In other words, there is a gap between the improvements that we are currently seeing in human development and those that existed before the pandemic. 

This is a concern because it shows that what could be seen just as a temporary shock in 2020 and 2021 can have very long-lasting and permanent effects, as measured by this difference between the trend before 2019, before the pandemic, and the trend of improvement in human development that is currently occurring. The second concerning trend that we see at the global level, is that the poorest and most vulnerable members of the international community are being left behind. Essentially, there is another growing gap, this time between the levels of HDI of countries at the very high levels of the Index, and those at its low levels.

This has been going on for the last four years, since 2020, and it represents a process of divergence in Human Development that contrasts with the trend that persisted for many decades before, in which there was a convergence in patterns of Human Development.

I think these two features of the recovery from the shock of 2020-2021 is something that we need to bear in mind and find ways of redressing. Moving from a process of divergence towards a process of convergence that is also happening not only across countries, but within many countries as well, and also see if we find ways of moving the trend of improvements in Human Development upward, as to reduce this gap between the potential as measured by the pre 2019 trend in Human Development ,and the trend that we currently have.

 

• The BBVA Microfinance Foundation was the first private institution in the world to use the multidimensional poverty methodology to measure the deprivation of its customers' households. How can the private sector, and in particular the microfinance sector, contribute more to human development?

Now I think it's very important that the BBVA Microfinance Foundation is using the Multidimensional Poverty Index, because it complements more generic indicators of poverty centred on income or monetary measures of deprivation. One of the reasons why this is important – and also why the private sector, and in particular the microfinance sector, could support the reduction of poverty – is by having this Multidimensional Poverty lens that focuses not only on aspects associated with health and education that are sometimes or often neglected when we look at monetary poverty, but looks not at monetary flows, but also household assets.

These assets are important because they can help households confront shocks in a way that just relying on income does not comprehensively address, because if they have something that is longer lasting and that can be passed onto future generations, that complements the importance of monetary flows such as income. This, I think, is one of the advantages of having a Multidimensional Poverty approach to poverty measurement. And one of the contributions that the private sector can make in this respect is to ensure that households have the ability to accumulate assets from which they can not only generate income, but also other services that may be important to them, something that they can hold on to if they suffer a shock that is reflected in a declining income.

• Next year's Human Development Report will be dedicated to digital transformation: How do you expect digitalisation and artificial intelligence to transform key areas of human development, such as health, education or employment in Latin America and the Caribbean?

The Human Development Report that we are currently working on will focus on how digital transformation and artificial intelligence are likely to shape opportunities for Human Development into the future.

On the one hand, we know that there are many opportunities associated with greater availability of health and education services that can reach populations that may be hard to reach with a more traditional means. Digital technologies also enable sharing of information and access to information in real time. They are also a potential source of jobs and income, and there is evidence that suggests that they can also help to reduce some inequalities, such as gender-based ones. But along with all of this potential, obviously, there are also a number of risks that are particularly associated with artificial intelligence, given the more recent developments.

There is a concern that, as these technologies approach the tasks that humans used to do, there might be a danger for humans to be replaced by machines using these technologies. And so the challenge that we're addressing in the upcoming Human Development Report is how to design policies and institutions that ensure that instead of replacing, technologies will augment what humans can do, and instead eliminate tasks that may not generate very large gains in Human Development. 

Hence, it is less about predicting what the path of technology will be, and more about what kind of conditions could we conceive that would enable us to harness the potential of these technologies to augment Human Development.

 To find out more about the latest Human Development see: https://hdr.undp.org/content/human-development-report-2023-24.