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Regression of poverty in danger if targeted bonds are not applied

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During the second year of the pandemic, about 1.3 million Peruvians managed to get out of monetary poverty after it reached 30.1% of the population in 2020: 9.9 million people; that is, 8 million 556,000 citizens (25.9%) closed 2021 in a situation of poverty, according to the National Institute of Statistics and Informatics (INEI).

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For the research director of the Research Institute for Development (IRD), Javier Herrera, These figures are encouraging considering the abrupt ten-year setback in the fight against poverty caused by the arrival of COVID-19, however, he argues that victory should not be claimed because now the effects of rising international prices must be dealt with.

“There is a slow and inefficient recovery of the labor market, especially urban. Incomes are still below 2019. There is a deterioration in the quality of employment, with a higher rate of informality, and consequently, jobs with low productivity and below the consumption basket are created, ”he noted.

Herrera recalls that in the country a gap of -10.5% persists in real monthly per capita income compared to 2019, to the point that it fell from S/ 1,105 to S/ 989; while, in real spending, this increased from S/ 709 to S/ 753, compared to 2020.

Targeting is essential

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The economist Armando Mendoza considers the government’s silence to be worrying since the continuation of the monetary subsidies that were key during the two years of the pandemic has been left up in the air, and which will continue to be essential to keep the advance of poverty under control.

“There is a significant reduction (in monetary poverty) that responds, in part, to the same reactivation of the economy. Although the economic recovery has advanced to pre-pandemic levels, in the social case, we have not yet recovered, and it has been slower and much more precarious. It’s not clear what’s going on,” he noted.

The specialist warns that, by adjusting the cost of the basic family basket upwards during this year, the poverty line will automatically take on more territory, with a very high risk that we will stagnate or that the monetary poverty ratios will increase again. .

Along these lines, Herrera agrees that generalized exemptions are not the most appropriate path since they involve a high fiscal cost and will benefit non-poor households more.

“Focused policies are required, not a price control, but to go for direct aid with more endowments to the common pots, Qali Warma and a compensation and attenuation bond for the price shock that will continue. Peru is holding up well to rising prices, but it could be worse. An agricultural campaign with lower productivity is coming,” he lands.

Watch out for the vulnerable

The main defect of the strategy against poverty, according to Herrera, is the little capacity to execute the plans since there is no updated list of households, which makes it difficult to execute. “It is not enough to attack poverty, since more than a third of the population is at risk of falling into it.”

According to the INEI report, 34.6% of Peruvians – in absolute figures 11 million 430,000 people – are at risk of falling into poverty; and considering the 25.9% of poor Peruvians who left the bicentennial, Herrera emphasizes that we have 60% of the population on the cornice: 6 out of 10 Peruvians are poor or in a vulnerable situation.

Urban and rural recovery is uneven

The regions with the highest incidence of poverty are Ayacucho, Cajamarca, Huancavelica, Huánuco, Loreto, Pasco and Puno with margins of 36.7% to 40.9%, and with the highest extreme poverty, Cajamarca, Huancavelica and Puno, with ratios of S / 10.0 to S/ 14.3%.

The incidence of monetary poverty in rural areas fell 6% compared to 2020, and 1.1%, to 2019, while in urban areas, the contraction was 3.7% by 2020, and compared to the year before the coronavirus, it shot up by 7.7% (see infographic).

According to the economist Carolina Trivelli, despite the rapid rural recovery, it remains at a very high level and hits 4 out of 10 people. “More worrying than the regional panorama, the real picture is the structural problem to attend to crises (by area),” she noted.

The data

Stake. Of every 100 poor people, 92 of them are informal workers and only 8 are formal. And of every 100 informal workers, 39 are in a situation of vulnerability. Of the formal, 21 out of 100 are at risk of falling into poverty.

Source: Larepublica

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