A third of Peruvians are poor: in 2046 they would return to the pre-pandemic level

As a residual effect of a 2023 that brought the worst GDP result in three decades – not counting the pandemic –, poverty in Peru increased and reached 29% of the population, according to the National Institute of Statistics and Informatics (INEI).

Total, There are 9 million 780,000 people immersed in poverty: 3 million 290,000 citizens more than in 2019, when the rate was 20.2%, and 596,000 more than in 2022 (27.5%). Except for the 30.1% ratio left by the arrival of the coronavirus, there is a setback of 12 years in the fight against one of the endemic evils of our society (see infographic).

More Peruvians are extremely poor

However, as La República announced in its edition of Thursday, May 9, when President Dina Boluarte threatened to suspend the publication of the INEI report, one of the most critical points has been the rise in extreme poverty, which worsened in the first year of the Boluarte administration and affected more compatriots than in 2020.

Of the 29% of poor Peruvians, 5.7% are extremely poor. Before continuing, it is worth clarifying that the poverty we are referring to is monetary poverty. He INEI establishes two thresholds: those people whose expenditure to cover basic needs such as food, education, health and transportation does not exceed S/446 per month are poor, and those whose expenditure is below S/251 are extremely poor.

In detail, 1 million 922,000 Peruvians lie in extreme poverty. Compared to 2022, there were 249,000 citizens who fell and now subsist monthly on a quarter of the minimum wage (S/1,025); and compared to 2019, 991,000 more people were registered. In 2020, the extreme poor rate was 5.1%; today, it is 6 basis points higher (see table).

And, by area, in the rural spectrum there was a striking increase compared to the year before the pandemic: it went from 9.8% to 16.2%. The regions with the most extreme poverty are Cajamarca, Huancavelica, Loreto and Puno, with rates of up to 17.1%.

Javier Herrera, representative of the Research Institute for the Development-IRD France, maintains that there are three main reasons why the number of poor and extremely poor people in Peru increased. Firstly, there is the 0.6% drop in GDP, since the recession stagnated domestic demand and private consumption; In addition, there is inflation, which shot up by more than 10% in food alone and hit the poorest. Finally, there is the deterioration of employment in productive sectors such as manufacturing, construction, fishing and agriculture.

The INEI numbers reflect a harsh reality that contrasts powerfully with the recent increase of S/11,000 that the congressmen had – in addition to the S/15,000 of their salary – and the investigations for alleged illicit enrichment of President Dina Boluarte.

“There is an absence of awareness about the situation that is getting worse. It has been two years in a row that poverty has increased, and now we are heading towards the urbanization of poverty. Compared to the last six years, poverty in Lima has tripled,” says the academic.

More than 20 years to reduce poverty to 20%

The Ministry of Economy and Finance (MEF) estimates that the Peruvian GDP will grow 3.1% this year, and until 2027 will add an annual average of 3%. Specialists consulted by this means, as well as Minister José Arista, recognize that it is insufficient to close gaps.

If an annual rate of 3% is maintained, in more than 20 years – approximately in 2046 – we would only reduce poverty to 20% before Covid-19, recalls David Tuesta, president of the Private Competitiveness Council. And, if an annual rate of 4% is achieved, it would be achieved in 16 years.

The professor of the PUCP Department of Economics, Jhonatan Clausen, maintains that economic growth, without a doubt, is essential, but that In previous decades “it has been seen that growth alone is insufficient to reduce monetary poverty in all areas of Peru.”

Clausen explains that, in fact, rural poverty tends to be less sensitive to growth than urban poverty, since it implies direct action by the State for the provision of services and, therefore, it is urgent to complement growth with redistribution policies. “We cannot think that, automatically, if there is growth, the lack of access to health, connectivity, educationsecurity, among other fundamental aspects for the population,” he assures.

Multidimensional poverty: the other side

It is the first time that the INEI incorporates in its poverty report a section that explicitly refers, in detail, to multidimensional poverty. And the figures are no less alarming: 32% of the population does not have access to quality medical care, despite the fact that 43% have chronic health problems. Almost half (43%) of Peruvian children between six months and three years of age suffer from anemia, and a quarter of the population is obese. The perfect Storm.

To this must be added that 74% of the population does not enjoy adequate management of the water they consume, while the crime rates affecting the urban population between 15 years of age and older have climbed to 27%.

The dean of the Regional Council of Metropolitan Lima of the College of Nutritionists of PeruJessica Huamán, remembers that the basic individual basket has increased by S/31 to reach S/446, a situation that means a smaller number of the population has access to good food.

In that sense, Huamán points out that growing GDP does not necessarily translate into a reduction in anemia and malnutrition. Anemia last year was 42.4% and this year 42.1%, while chronic malnutrition has remained at stable levels, around 11%. The impact on the coast occurs as a consequence of inflation or even climate change.

“If we talk about multidimensional poverty, which has to do with access to basic services, we can see malnutrition. Anemia is multi-causal, it is not only due to a lack of safe food, but also access to water, energy for cooking, etc.,” says the referee, but not before emphasizing that anemia and malnutrition increased in urban areas.

Data

Subsistence. Peruvians allocate 30% of their income to food and only 3% to recreation, according to INEI.

Eye. Monetary economic vulnerability affected 42% of the jungle, 36% of the mountains and 26.6% of the coast.

Reactions

Javier Herrera, IRD researcher

“There is an absence of awareness about the situation that is getting worse. “There have been two years in a row in which poverty has increased, and now we are heading towards the urbanization of poverty.”

Jhonathan Clausen, professor PUCP Economics Department

“We cannot think that, automatically, if there is growth, the lack of access to health, connectivity, education, security, among other fundamental aspects for the population, will be reduced.”

Government assures that there is no need to be alarmed

For the president of the Council of Ministers, Gustavo Adrianzén, the fact that poverty is at maximum levels in more than a decade, without Covid-19, is not a cause for alarm and, on the contrary, it should be taken “with confidence in ourselves.” Along these lines, she assured that the Government of Dina Boluarte will redouble efforts to reverse the figures with economic reactivation and citizen security. Furthermore, in order to dispel doubts about the attempt to censor the INEI publication, he said that the data had been known for more than two weeks.

The mea culpa came from the MEF, where Minister José Arista recognized that, in all these years, “something more could have been done.” By 2024, he assured that poverty will be reduced “in small digits”, so “it will not be so optimistic.”

A crisis inherited from 2016

Approach. Federico Arnillas, president of the Concertation Committee for the Fight Against Poverty.

Poverty was already in Lima before covid, but the pandemic has made it easier for levels and conditions of overcrowding to expand and that makes urban poverty more visible. What we have are two analysis parameters, one in absolute terms and the other in relative terms. In absolute terms, urban poverty has always been greater; In relative terms, poverty is higher in rural areas.

This happens because it is a very unequal society, and that is the first thing we must recognize. The social redistribution mechanisms are very bad. We then have this tendency of atomization of poor and non-poor, the middle classes are very weak if we compare them with other countries with more abundant middle classes and better provided with services.

Using the monetary poverty indicator, there is a clear trend of poverty reduction between 2004 and 2016, twelve years. But between 2016 and 2019 the trend does not occur and the incidence remains relatively stable. 2020 arrives and, obviously, poverty skyrockets.

That curve is interesting. The question is what happens in the country in those four years? The stagnation has to do with the political crisis. Although there are coincidence factors, such as the arrival of Venezuelan migration and The boyLet us remember that 2016 was the year when tensions began in the PPK Government. And as long as we don’t get out of that situation, we won’t be able to get out of this hole.