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PERU
Poverty rampant despite growth
Cecilia Remón
9/21/2006
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Social programs fail to reach

Despite Peru´s sustained average economic growth of 5 percent for each of the past five years, poverty continues to affect half of the country’s 27 million residents. But poverty is not restricted to the poor agricultural Andean departments. Poverty has worsened in the capital, Lima, where most of the country’s wealth is concentrated.

According to the National Institute of Statistics and Informatics, known by the Spanish acronym INEI, between 2001 and 2004, poverty increased 4.8 percent in Lima and the neighboring port and constitutional province of Callao. Five million (57 percent) of the 8.8 million residents in the capital’s metropolitan area are poor, says the Metropolitan Lima Fight against Poverty Program, or PROPOLI.

For Víctor Caballero, a researcher at the Peruvian Studies Institute, "it’s contradictory that there is a macroeconomic improvement … with an increase in extreme urban poverty. One thing is economic development … the populations that have been excluded from this model."

In July, INEI said that between 2001 and the first three months of 2006, poverty in Peru dropped 6.3 percentage points, from 54.3 percent to 48.1 percent.

"For those who defend the current economic model, proves that although it’s only by a little, poverty is decreasing. That’s why we have to stay on the same course and not change anything," wrote economist Humberto Campodónico in his column for the Peruvian newspaper La Republica.

"The figures reveal that even though the gross national product increased by 21 percent between 2001 and 2005 during the term of ex-President Alejandro Toledo (2001-2006), this hasn’t translated into an increase in jobs or wages for the majority," he said.

Informal sector

According to the International Labor Organization (ILO), 10.5 percent of the economically active Peruvian population is currently unemployed, while 60 percent work in the informal sector, without social benefits or sufficient wages to meet their basic needs.

Economist and professor at Lima’s University del Pacifico Jürgen Schuldt criticized the government’s triumphant attitude when it announced "this mild reduction in poverty of just 6 percentage points" while "practically half the population continues to live in miserable conditions."

For a population that "increased by 1.9 million [people] — from 25.7 million to 27.6 million — between July 2001 and July 2006 [a 6-percent reduction in poverty] means that only 650,000 people got out of poverty," he added.

One of the loftiest goals of the newly-inaugurated government of President Alan García is to reduce poverty rate in Peru to 40 percent over the next five years.

García’s government created the Fund for Equality to combat extreme poverty, which he will finance with the resources from a series of austerity measures he took shortly after assuming office. Private sector support and international aid will also contribute to the fund.

Economy Minister Luis Carranza says that public funds will focus on "small-scale projects with fundamental impacts" and quantifiable results.

For Carranza, the construction of roads will increase school attendance in rural areas — particularly for young girls — and improvements to health programs will help decrease infant mortality (currently 34 per 1,000 live births) and maternal mortality in child birth (410 per 100,000 live births).

"It’s in these types of projects that a large part of the spending" for the Fund for Equality will be focused, Carranza said, adding that he expected a more drastic reduction still in extreme poverty in the country at the end of García’s 5-year term.

There are 60 social programs in Peru aimed at the poverty-stricken population, mainly in the country’s highlands.

A government welfare program, known as Juntos, or "Together" in English, has been in operation since September 2005, aimed at the country’s families living in extreme poverty. Some 61,000 families in 110 rural districts in the impoverished Andean departments of Apurimac, Ayacucho, Huancavelica and Huanuco currently receive 100 soles (US$30) each month from the program in exchange for a promise to improve their children’s nutrition, health and education.

According to INEI, 89 percent of the population of Huancavelica lives in poverty, 82.5 percent in Apurimac, 77.7 percent in Ayacucho and 76.8 percent in Huánuco. In some towns in these departments, the entire population lives in poverty.

Programs have little to show

Caballero is skeptical about these social programs, and says that the majority of them fail to reach those who need the aid most, particularly in urban areas.

"They operate these programs without evaluating, without correcting the strategy for the fight against poverty that has been applied in this country, and they maintain failed programs, that have not achieved the expected results."

The researcher cited the Vaso de Leche, or "Glass of Milk" program directed at children living in extreme poverty as an example. The program has failed to lower indexes of child malnutrition since it was launched in Lima in the 1980s, nor has a soup kitchen program that began in the 1990s reached the poorest sectors.

According to a 2004 study by the Peruvian Institute of Social Market Economy on the impacts of social programs, 60 percent of the target population of Vaso de Leche and the soup kitchen programs did not receive the benefits because of the political management behind these programs, particularly during the government of disgraced President Alberto Fujimori (1990-2000).

Caballero said that instead of creating new social programs, the government should intervene to improve the coverage and quality of the current programs because if not, "there will be no results in the reduction of poverty." 


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