For those who kept their jobs, real wages sagged more than 40 percent below 1988 levels, leaving two-thirds of the labor force below the poverty line. It would be nice to think that Mexico is unusual, but private capital has been a mixed blessing for much of the developing world. Moreover, many countries have seen little private capital. From 1990 to 1994, just a dozen countries captured 90 percent of capital flowing to the developing world. In 1995, the poorest 48 countries received less than half of 1 percent.
Poverty remains a tremendous problem.
In Latin America, throughout the 1980s, the number of poor increased both in absolute numbers and as a percentage of the total population. Worldwide, about 1.3 billion people live in poverty, nearly half of them just several hundred calories a day away from starvation. Demographic trends offer little support to those who expect the free market to lift these people out of poverty. In roughly 40 years, the world population will double, and nine-tenths of it will be in the developing world. On reflection, sadly, much of what government did in the name of development was both inefficient and inequitable.