Progress in human development across Latin America and the Caribbean has plateaued and faces potential reversals as multiple pressures converge on the region, according to a UN report warning that decades of hard-won advances are at risk.

The United Nations Development Programme (UNDP) report, released on September 16, found that one in four people in the region live below the poverty line while more than 30% of the population is classified as vulnerable — hovering just above the threshold but lacking protection from economic shocks.

"A new era of uncertainty, overlapping crises, and rapid transformations is intertwined with deep-rooted structural vulnerabilities and governance challenges, putting hard-won development gains at risk," said Michelle Muschett, UNDP regional director for Latin America and the Caribbean, at the presentation in Ecuador.

The 2025 Regional Human Development Report, titled "Under Pressure: Recalibrating the Future of Development in Latin America and the Caribbean", reveals that after decades of sustained progress, advances in human development began to lose momentum, particularly from the mid-2010s onwards.

Slowing progress

The region's Human Development Index growth rate decelerated sharply from a steady 0.7% between 1990 and 2015 to just 0.3% in the five years before the Covid-19 pandemic, and has further slowed to 0.2 % since then, according to UNDP data.

"Even before the profound impacts of the pandemic, where we saw some setbacks in terms of human development, we had already been progressing at a much slower pace than we had seen in previous decades," explained Almudena Fernández, UNDP chief economist for Latin America and the Caribbean.

The slowdown comes as the region grapples with what the UN body describes as "polycrises" — rapidly evolving technologies that are deepening inequality, increasing social fragmentation, and accelerating climate change impacts.

Latin America has experienced a dramatic surge in uncertainty levels, reaching nearly 50% above the global average and more than double the level recorded in the region itself in 1990 by early 2025.

Tech divide

The report highlights how technological advances, particularly artificial intelligence, are exacerbating existing inequalities despite their potential to address structural problems. The region's large informal sector and preponderance of small businesses are failing to capitalise on AI's productivity benefits, potentially undermining competitiveness against regions adopting these technologies more rapidly.

"Although AI's potential could be significant, the productive structure of Latin America and the Caribbean, with such a large informal sector and such small businesses, is not taking advantage of it," Fernández warned. "This is worrying because not only is an opportunity being wasted, but we could also lose competitiveness to regions that are adopting these technologies more quickly and more inclusively."

The region has also become increasingly polarised, with a polarisation index of 3.3 out of 4, exceeding the global average of 2.8. This fragmentation has weakened governance and opened pathways for organised crime expansion and increased migration flows.

Climate pressures mount

Climate change represents another mounting pressure, with meteorological phenomena doubling in frequency and intensity. Temperature-related productivity losses cost the region $1.78bn in 2022, while 90% of infrastructure projects remain inadequately designed to withstand climate risks.

The report notes that while citizens express growing concern about climate change, economic growth continues to take precedence over environmental considerations in policy priorities.

Resilience imperative

To counter these threats, the UN body proposes placing resilience at the centre of development policy, moving beyond traditional approaches to create more adaptive systems capable of withstanding shocks.

"Investing in resilience is not a luxury or an add-on, but an urgent necessity to protect past achievements and open up future opportunities," said Inka Mattila, UNDP resident representative in Ecuador.

The recommendations include establishing universal social protection systems that extend beyond the poorest to include vulnerable populations, strengthening local institutions in neglected territories, and building climate-resilient infrastructure.

Despite the challenges, the report argues that the region retains the capacity to transform pressure into opportunity. "There is still time to turn that pressure into a catalyst and redefine the trajectory of development in the region," Muschett said.

The warning comes as Latin America stands at a crossroads in its development trajectory, with the potential to either reverse decades of progress or forge a more resilient path forward through coordinated policy responses addressing the region's interconnected challenges.