The debate about increased poverty

13 May 2018

Carolina Trivelli, one of Peru’s best informed experts on poverty and social deprivation has written the following piece which we think is helpful to our readers in interpreting recently published figures that show an increase in poverty levels for the first time in some 20 years.

She writes (our translation):

“Since the announcement on poverty for 2017, there have been many opinions and much analysis. Some of these have been useful and with helpful annotations so that poverty has regained centrality on the national agenda; others less so with disinformation, crass errors and false suppositions.

Here are five points to bear in mind in thinking about what has been said:

    • The poverty levels that are measured are those of ‘monetary poverty’. It is a good metric but does not include the multidimensional aspects of poverty. It is a metric that is transparent, comparable and robust. It is based on consumption by families, not just monetary expenditure, but it is an indicator, not proven truth. It should be employed alongside complementary indicators such as unmet needs.

    • It is a metric with a high standard of reliability and is subject to external supervision. The margins of error are made explicit along with statistically significant changes. An increase of one percentage point per annum is itself significant. Reading the technical information is useful.

    • Poverty is measured on the basis of prices and conditions in seven major geographic domains. There are seven levels of poverty that are then standardised to form a national aggregate figure.

    • Economic growth contributes to the reduction of poverty, but is not sufficient per se. Its contribution is relatively less for those groups that suffer most exclusion. Economic growth only explains 50% of the reduction in poverty in rural highland areas.

    • Urban poverty is relevant and has increased. But 70% of those in poverty live in urban areas of less than 20,000 inhabitants, of which half derive income from agricultural activities. Rural farming areas need to be at the centre of policies to confront poverty.”

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