By Roxana Glavanov – (OECD) and Amal Chevreau – (OECD)
Latin America’s rural communities produce much of the food, energy and minerals the world depends on. Yet for many rural residents, the promise of lasting prosperity often remains out of reach – because despite this wealth, insecure and informal work is widespread, undermining livelihoods, services, and long-term opportunity.
Regions of global significance
Latin America is the world’s largest net food exporter, with food exports reaching a record $349 billion in 2022. The region also produces 35% of the world’s lithium and 40% of its copper, minerals essential for clean energy and digital devices. But in the rural regions that produce this wealth, people too often struggle to access stable jobs, fair wages or basic services.
Informality is widespread – and worse in rural areas
Informality lies at the heart of the problem. Across the region, about two-thirds of the population live in households reliant on informal work. In rural areas, 66% of people live in fully informal households, nearly double the 34 percent in urban areas. In some countries, it is even higher: 85 percent of Colombia’s rural residents and over 90 percent of Peru’s live in fully informal households.
Informal work is often low paid – informal workers earn on average around 60% less than formal workers and many earn below minimum wage levels. It is also insecure, providing limited access to training, finance or social protection, including healthcare and pensions. While it is often the only way for low-income individuals to engage in economic activity and make a living, it has far-reaching impacts also across community life: when most jobs are informal, tax revenues fall, constraining investment in infrastructure, road maintenance, school operations and healthcare. This can trap rural communities in a cycle of underinvestment and exclusion.
Why is informality so prevalent in rural places? For many, jobs are seasonal, family-based, and tied to agriculture – making it harder to sustain formal employment arrangements. Local governments are often overstretched, law enforcement is limited, and the economy is dominated by small, low-productivity firms. Lower education levels also constrain options for workers.
Undermining outcomes
One sector where informality is especially prevalent is mining, and particularly for metals like gold and copper. In remote areas, artisanal and small-scale mining (ASM) often operates without contracts, financial services or social protection. Globally, it is estimated that 80 to 90% of ASM is informal.
“Formalisation should be a key government goal. It reduces miners’ risks by opening access to health services, social protections and technical assistance, essential for rural livelihoods.” ~ Gina D’Amato, Executive Director, Alliance for Responsible Mining
Pathways to formalisation
Formalisation initiatives exist, but complex and costly requirements – alongside weak institutions – often prevent progress. However, some initiatives are breaking new ground.
One example is the Gramalote project in Colombia. Here, the Mineros La María S.A.S. co-operative partnered with government agencies and AngloGold Ashanti under the CRAFT scheme – a voluntary framework that helps artisanal miners manage risks, improve practices and enter formal markets. In Colombia, co-operatives include almost 6.3 million members. The National Development Plan 2022-2026 acknowledges that strengthening the National Plan for the Promotion of Solidarity Economy and Rural Cooperative will contribute to decent work and rural employment in Colombia.
By combining legal support, technical assistance and training, the partnership helped miners meet sustainability standards and enter formal supply chains. In just three years, it created nearly 400 formal jobs, boosted tax revenues, and improved access to education and social protections for families. It also gave workers access to training, safety gear, credit and financial services.
“Recognition as formal citizens helps decrease gender inequalities by enabling equal pay and representation. It provides a structure to address distinct needs fairly.” ~ Gina D’Amato, Executive Director, Alliance for Responsible Mining
Trust and transparency build stronger communities
Responsible business practices are not just a legal requirement, they are essential to build trust and long-term economic success. Where suppliers can be certified and traced, they open doors to responsible markets and sustainable investment opportunities.
In Peru’s high-altitude Ananea region, co-operatives are using certification processes to demonstrate compliance with environmental and social standards. Government oversight, community participation, a General Law on Co-operative Societies and strong enforcement underpin these efforts. Certified co-operatives reinvest profits into local infrastructure like water access and education, providing new generations with new assets and opportunities before returning to their communities. Their inspiring example shows how governments, companies and social economy organisations such as co-operatives communities can come together to build trust and strengthen rural communities – with formalisation a key part of these efforts.
“We have seen that when governments, companies and communities manage to build trust, it becomes possible to establish a real roadmap toward formalisation. These partnerships can transform territories, but without trust, efforts collapse quickly.” ~ Gina D’Amato, Executive Director, Alliance for Responsible Mining.
A more inclusive future for mining communities
Latin America’s rural communities are already rich in resources. By investing in formalisation, governance, including through social and solidarity economy entities such as co-operatives and social enterprises, and trust-based partnerships, they can be rich in opportunities for workers too. Turning resource wealth into lasting well-being will require long-term commitment – from governments, businesses and communities alike. But with the right tools and trust in place, rural regions can move from informality to inclusion – and build futures that are not only productive, but fair.
- For further reading, take a look at Reinforcing Rural Resilience and Rural Innovation Pathways. Learn more about informal work through Labels for the Social Economy and From informal to formal jobs: The contribution of cooperatives in Colombia.
