MercoPress. South Atlantic News Agency

Chilean officials reluctant to review poverty definition fearing higher percentages

Alicia Bárcena: poverty also means social exclusion

An international conference held last week in Santiago de Chile by the Economic Commission for Latin America and the Caribbean (CEPAL) took a hard look at how poverty is defined in Latin America and gave Chileans attending the event an opportunity to sound off about how poverty is measured here.

Chileans at the conference criticized their government for not updating the nation’s poverty line in time for the results of the next census (The Survey of National Socioeconomic Characterization or CASEN), to be published in July by the Ministry of Planning (MIDEPLAN).

Chile’s economic growth in recent years has led to an ongoing national debate about moving the poverty threshold up. This would have the effect of increasing the number of people who fall under the poverty line.

But changing the current poverty line — which is measured by standards created 20 years ago — is not a priority given the aftermath of February’s earthquake, the government said recently.

Claudia Sanhueza, economist at the Universidad Alberto Hurtado in Santiago, told the Santiago Times that the previous administration of President Michelle Bachelet supported an update to the nation’s poverty line.

“It is not understood why they (the new authorities in the government of Sebastian Piñera) don’t update the poverty line now, knowing that, technically, it is their responsibility to do so,” said Sanhueza. “The earthquake is not a reason for the decision. The CASEN 2009 was taken before the earthquake. There would not be effects from the earthquake on these measures.”

Leonardo Moreno, executive director of Chile’s Fundación Superación de la Pobreza (Foundation for Overcoming Poverty), told the Santiago Times that the poverty line is calculated using the price of a basket of goods - and who can and cannot afford it. The basket of goods and their prices are re-evaluated every 10 years. The 1986-’87 base figures are still used, although Chile has revised the basket twice times since then (1996-’97 and 2006-’07) by adding or deleting different items to the basket of goods.

Moreno said that instead of using 20-year-old information, “We have to use the most current figures”. The statistical base information used today says that poverty in Chile is at 13.7%, he said. But if the numbers were updated to use the 1996-’97 basket, this percentage would increase to 29%.

The basket of goods varies according to the price of items deemed necessary. To live above the poverty line, one must be able to buy two baskets of goods per person in a given household. Those who are considered indigent cannot afford to buy even one basket.

“The minimum basket of goods is constructed based on the minimum caloric requirements that a person needs to live for a month, looking for those requirements in the available products in today’s economy, and at the same time, monetarily assessing them,” Sanhueza said.

According to the 2006 CASEN survey, the poverty threshold for Chile’s urban dwellers is calculated to be 88 US dollars per person, per month. The threshold for indigence — or absolute poverty —is half that.

“Living in poverty is more than just not having the income necessary to buy goods and services to cover basic needs; being poor also means suffering social exclusion,” said Cepal Executive Secretary Alicia Bárcena.
“Ultimately, poverty is not being entitled to rights, the negation of citizenship.”

Moreno, like Ms Bárcena, said poverty should be considered within a “much larger context,” including “complementary measurements, not just income”.

This multidimensional approach focuses not only on material deprivation, as the basic needs approach does, but has more of a human development focus. Among the areas considered in this multidimensional methodology are education, nutrition, and health.

Sabina Alkire, director of the Oxford Poverty and Human Development Initiative (OPHI), deemed “acceptance within society” to also be an important measure of poverty.

One of the challenges to the multidimensional approach is how to set “guaranteed social thresholds.” In his presentation at the seminar, Moreno explained the difficulty in deciding on a common standard for education, for example.

Both Moreno and Sanhueza agreed that it is not clear as to whether the government’s decision not to change the poverty line is final.

While Chile’s government has not updated the standards, it did announce that it will conduct complementary polls from May 10 to June 8 to take into consideration the effects of the earthquake on individuals.

President Sebastián Piñera’s upcoming May 21 speech is expected to take into account some of the new numbers for his plans to combat poverty in Chile.

The decision not to update the poverty line will not directly affect governmental aid given to communities because this aid is distributed according to another separate system. Moreno clarified that there are some people who do not live below the poverty line who receive government assistance and there are others who do live below the poverty line, but who do not receive state benefits.

If some individuals live in difficult conditions but do not receive governmental aid, they often go to other organizations for support. One such organization is the Hogar de Cristo, with various homeless shelters set up around Chile.

Bernardo Beltrán, a middle-aged homeless man who has lived in one of these shelters for about five months, told the Santiago Times, “I haven’t yet registered for the governmental benefit. But I’m still trying to figure out how to do it, because I can only be here at the Hogar de Cristo for seven or eight months.”

By Elizabeth Osborne – Santiago Times