Opportunities for Indigenous Peoples in Latin America

Our study highlights that low income and the low resources are mutually reinforcing. Low levels of education prevent entry into higher paying jobs, while lack of credit or access to farm machinery is a road block to increasing agricultural productivity.

As a result of their historical exclusion, indigenous people continue to have low levels of human capital, limited access, productive land, basic services and financial markets, and poor infrastructure.

Our report, in general, finds that the indigenous people work mostly in just a few occupations, living in rural and remote areas, and suffer from lack of access to well paying jobs in the mainstream labor market. The report looks in general at what types of jobs and income and sources of income the indigenous people earn, and we find that in the rural areas, indigenous people are more likely to work as unskilled agricultural laborers than the non-indigenous people.

In the urban areas, they are more likely to have informal jobs that lack security, access to social benefits, healthcare, and unemployment insurance. In Guatemala, for example, less than 50 percent of urban indigenous work for wages compared to 65 percent for the non-indigenous people.

Also, the distribution of land is unequal. The plots of land owned by indigenous people can be anything from twice as small as non-indigenous land holdings in Peru to nearly eight times smaller in Ecuador.

In addition, access to financial services is very limited. Very few indigenous households have access to formal or informal credit. For example, in rural Ecuador, indigenous business owners are often deterred from seeking a loan due to high interest rates. Two more factors that can be improved upon are access to infrastructure and basic services, access to running water and can help to increase productivity, and diversification of income generating activities. In rural Mexico, for example, lack of access to roads reduces the value of land.

And finally, social networks can be either constraints to growth or engines for growth. The indigenous people have strong social ties that are important for their survival and prosperity. However, upon occasion, these networks do not seem to help them into other types of employment that pay better. Networks seem to work mainly perpetuating employment in agriculture and self-employment.

The bilingual programs are often improperly designed, lacking teachers who speak the native language, sometimes offered to children who don't speak an indigenous language, and often without proper textbooks in the mother tongue.

The bilingual schools that work, on the other hand, have teachers who speak the native language, are well equipped with bilingual materials, teach the national curriculum but use materials developed by the local community. And when the teaching of indigenous history is part of a national curriculum, it often becomes inclusive, as in the indigenous culture in New Zealand. Latin America's schools produce low reading and math skills as measured by national and international assessments and indigenous people lag in all measures.

Another example of a successful program that is not differentiated but reaches indigenous people is the successful conditional cash transfer program, Oportunidades, known as Progresa, in Mexico, which provides for investments in health, education, and nutrition, and has been shown to raise improve outcomes in health, education, and nutrition particularly for indigenous people without being targeted at indigenous peoples.

However, while this raises the number of years of schooling, but more investment needs to go into improving the quality of education that all people in Latin America receive, but particularly indigenous people.

Another type of program that we make reference to is the Foundation of Farmers Organization of Salinas (FUNORSAL), which is basically an organization that creates sustainable rural livelihoods for indigenous households.

So, in general, the point the report acknowledges these very worthwhile efforts. Maybe they're not summarized in the executive summary, but we do think that there is scope for success in these types of efforts in helping indigenous communities.

Part of the reason for the earnings differential is the lower level of education. Indigenous people have two to three years' less education than non-indigenous people. For example, in Bolivia, non-indigenous people have almost 10 years schooling. Adults in Bolivia have almost 10 years of schooling while indigenous people have only six. In Guatemala, non-indigenous people have six years of schooling while indigenous people have two-and-a-half years of schooling.

Also, for every year of schooling, indigenous people earn considerably less; in other words, indigenous people have a lower return to their schooling investment.

In Ecuador, indigenous people earn less than non-indigenous people at higher level of schooling or at the lower levels of schooling the people have a higher rate of return, and this relationship is reversed at higher levels of schooling. So, years of schooling are not equivalent between indigenous and non-indigenous people. The quality of indigenous people's schooling is lower, and this is reflected in Mexico in the fact that older workers have a bigger differential in earnings than younger worker, so the longer they're on the job, the more apparent the quality differences become.

In national, regional and international standardized tests, indigenous people score lower than non-indigenous people. For example, the gap in math scores in Peru is about 27 percent, so indigenous people scored 27 percent lower than non-indigenous people. So, while there is some evidence of discrimination against indigenous people, most of these salary differentials can be explained by productive characteristics like education, experience, and particularly the quality of education. So, there is a large role for policy and public spending to improve access to education and the quality of education that indigenous people receive, which will help them improve their labor market performance and reduce the wage disparity over time.

We have some specific reference to land rights and differing situation across countries in Latin American region, which also discusses some of the programs designed to demarcate and title indigenous lands in Latin America.

But, our report focuses a bit more on other assets, and in terms of legislation or issues related to indigenous people's rights, we argue that the Millennium Development Goals (MDGs) will coincide with the Second International Decade of the World’s Indigenous Peoples, which was declared by the United Nations in 2006, so both the U.N. Decade of Indigenous Peoples and the Millennium Development Goals will end in 2015. This gives an opportunity for indigenous people to link the decade to the MDGs and to argue for disaggregated data on indigenous people's indicator, in terms of education, and health in order to highlight the difficulty of reaching the goals without specific attention to indigenous people, and also to use the decade and the MDGs to push for a commitment to indigenous peoples and to argue for specific targeted reductions in things like illness rates or to increase school completion.

This would be one example of, a very recent example, of how the World Bank is supporting social change in Guatemala post-1996 Peace Accords.

The Web site is at "www.worldbank.org/indigenous," and it's called the Grants Facility for Indigenous Peoples.