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Peru Poverty
Whether poverty is measured in terms of family income
or in
terms of social indicators, such as child mortality, it
has been
greater in Peru than would be expected on the basis of the
country's average income per capita. Historically, this
situation
has been an expression of the country's exceptionally high
degree
of inequality. More recently, especially in the course of
the
1980s, it increased even more than in the other major
Latin
American countries, chiefly because of the drastic
deterioration
of the economy's overall performance.
Measures of poverty based on family income are, of
course,
dependent on the particular income level chosen as a
dividing
line between the poor and the non-poor. Both the Economic
Commission for Latin America and the Caribbean
(ECLAC--see Glossary)
and the World Bank draw two lines--one for a
tightly
restricted income level to define extreme poverty, or
destitution, and a second cutoff for poverty in a less
extreme
sense. Destitution refers to income so low that it could
not
provide adequate nutrition even if it were spent entirely
on
food. Poverty in the less extreme sense takes as given the
proportion of income spent on food in each society and
compares
that proportion to the level needed for adequate
nutrition.
A comprehensive analysis of poverty in Latin America
for 1970
concluded that fully 50 percent of Peruvian families were
below
the poverty line and 25 percent were below the destitution
level.
These proportions were both higher than Latin America's
corresponding averages--40 percent in poverty and 19
percent in
destitution. In Peru, as in the rest of Latin America, the
incidence of poverty and destitution was much higher for
rural
than for urban families. Fully 68 percent of rural
families were
below the poverty line, compared with 28 percent of urban
families.
A more recent ECLAC study provides new estimates of the
incidence of poverty for 1980 and 1986. For Latin America,
the
share of families in poverty fell from 40 percent in 1970
to 35
percent in 1980 but then rose to 37 percent in the more
difficult
conditions of 1986. For Peru, the incidence of poverty
also fell
from 50 percent in 1970 to 46 percent in 1980, but then it
increased to 52 percent by 1986, rising faster than the
rest of
the region.
As in 1970, the incidence of poverty and destitution in
1986
remained higher for rural than for urban families, but the
differences had lessened. In 1970 the incidence of poverty
for
rural families was 2.4 times that for urban families; in
1986 the
ratio was only 1.4 times. The proportion of rural families
in
poverty actually fell, from 68 percent to 64 percent,
while that
of urban families rose greatly, from 28 percent to 45
percent.
Cuánto S.A. has developed an ongoing monthly indicator
of
extreme poverty in Peru, combining measures of earnings by
workers paid the minimum wage with earnings in the
informal urban
sector and in agriculture. Taking January 1985 as the
starting
point, this index shows a substantial fall in extreme
poverty up
to December 1987, in the first years of the García
government's
expansion. But then it shows a dramatic increase as the
economy
went rapidly downhill. At the end of the García
administration,
in June 1990, the index was 91 percent higher than in
December
1987 and 32 percent higher than its starting point in
January
1985.
Data as of September 1992
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