20080711 – Peru’s Economic Model and Poverty Reduction: Is It Working?

The relationship between Bolivia and Peru has deteriorated rapidly over the last year, in part because of disagreements on foreign trade issuess. Recently, Peruvian President Alan Garcia and his Bolivian counterpart, Evo Morales, engaged in personal attacks which served to increase tensions between the two Andean nations. On July 2nd, Garcia attacked Morales by saying the latter was jealous of Peruvian economic growth. Maybe Garcia has a point in observing that Peru’s economic growth is more robust than Bolivia’s, but economic growth is not necessarily the ultimate objective for a country; more important may be the satisfaction of its citizens, which in Peru is trending downward because of growing inequality.

In its chronic struggle against poverty, Latin America has experimented with various economic models. These have included the neoliberal policies of the 1980s and 1990s, which have led to increased inequality. Some see neoliberal failures as responsible for the leftist wave that has spread across the region. Peru, however, is one of the two countries in Latin America that have not been tempted recently by solutions calling for the abandonment of the neoliberal development model.

The Peruvian model has produced an exceptional economic growth over the last five years. In 2007, Peru’s GDP growth rate was more than eight percent. The following year, the U.S. ratings agency Fitch gave Peru an investment-grade rating, meaning that after thorough analysis of recent economic trends, the agency now considers Peru a safe and hospitable investment venture.

Profitable policies, but largely for the elite
Unfortunately, as the country’s economy grew, so did its inequality. This trend is especially evident in contrasting Peru’s coastal region with the Andes, with most of the increase in personal income being concentrated in Lima and other coastal urban areas. This can readily be seen in the luxurious beach clubs to the south of Lima, which epitomize the often fabulous wealth of the Peruvian elites. In contrast, Peru’s National Statistics and Information Institute (INEI) recently reported that rural highlands were the least succesful areas in reducing poverty during 2007. Many communities here still practice subsistence agriculture and suffer from extreme poverty, even though the region is rich in mineral resources – Peru’s main export.

During the Alejandro M. Toledo presidency (2000–2005), Peru’s Gini coefficient increased from 49.8 in 2000 to 52 in 2003, demonstrating a considerable rise in inequality. The significance of this injustice is not just statistical or ideological, because increasing economic inequality inevitably leads to public dissatisfaction, which in turn contributes to the country’s instability. Public dissatisfaction with uneven growth was manifested in Toledo’s approval ratings, which were the lowest in South America in 2004. This apparently has been recognized by the new president, Alan Garcia, who announced in May a budget increase of S./ 203 million (around $70 million) for the social program ‘Juntos’ which originally was launched by Toledo in 2005.

The ‘Juntos’ program: squandered genius?
The ‘Juntos’ program provides subsidies to poor families on the condition that they regularly send their children to schools and health centers. ‘Juntos’ is an attempt to recreate programs taken from Mexican and Brazilian models, which were designed to increase literacy rates and decrease economic inequality. Unfortunately, objective conditions in Peru make this program unlikely to succeed, because the nation’s primary education and healthcare systems are among the most inadequate in the world. Additionally, the program has targeted urban areas and neglected rural regions, which are most in need of government assistance.

It would not be surprising if ‘Juntos’ does not fulfill its purpose because Lima has proven extremely innefficient at implementing social programs in the past. The ‘Vaso de Leche’ effort in the 1990s failed to achieve its goal of reducing malnutrition in five-year-old children, even though it was the most widespread program of its kind in the country. Such examples reaffirm the challenge that would be involved in successfully expanding the ‘Juntos’ program. Ultimately, ‘Juntos’ expansion cannot contribute to sustainable development if the country’s education and healthcare structures are not first reformed.

Still, some statistics suggest that ‘Juntos’ may be helping to decrease overall poverty. The INEI recently announced a sizeable 5.2 reduction in poverty in 2007. However, many have questioned the validity of these numbers, including Farid Matuk, an ex-president of INEI, who guesses that such numbers might be forged. They suggest a poverty reduction rate of 0.6 percent per each point of GDP growth, which is three times higher than the average of previous years. At this rate, Peru would eliminate poverty completely in about 10 years, which strains credulity. Despite the surprising results, several institutions, including the World Bank and two Peruvian universities, supervised the study’s methods and verified the validity of the statistics. If they are valid, then ‘Juntos’ may yet be the reason behind the reduction in poverty, considering it was being implemented when the purported drop began to accelerate.

Development must be sustainable
Every effort must be made to continue to promote poverty reduction. In the past, social programs repeatedly have failed to create sustainable development within the Peruvian neoliberal model. The economic expansion experienced by Peru between 1991 and 1997 in factreduced poverty by several points. However, the subsequent 1998 to 2001 recession was a huge step backwards, suggesting that the social programs in the 1990s failed to create sustainable development at the time. Will the new expansion be different, or will a future recession negate all of the advances which have been made?

Peru’s Economic Minister, Luis Carranza, optimistically has predicted that Peru will experience 10 to 15 years of economic growth starting in 2008. This would represent the longest expansion cycle in Peruvian history and would lead to a significant reduction in poverty. ‘Juntos’ could potentially play a part in Peru’s economic success, but for Carranza’s dream to become reality, the government must first take aggressive steps in favor of sustainable development and adequately address the problems of inequality, healthcare and education. Without such reforms in these areas, programs like ‘Juntos’ cannot create sufficient opportunities for the poor, no matter how carefully they are nurtured.

This analysis was prepared by COHA Research Associate Guillermo Cornejo

http://www.coha.org/2008/07/peru%E2%80%99s-economic-model-and-poverty-reduction-is-it-working/

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Growth, Inflation & Poverty (24-III-09)

The most common approach to lowering poverty rates is to have high economic growth, but recent evidence from Peru disputes this result, pointing out that high growth rates could be canceled out by high inflation rates, with as a consequence high growth rates and higher poverty rates.

Measuring poverty has many tools from the most elemental to the most sophisticated; data available speaks of the degree of statistical development of each county, as well the willingness of each government to finance surveys that expose the painful reality of the poor.

The simplest method consists of a poverty line in US dollars, being US$ 2 per day a popular threshold. The conventional problem with this value is different purchasing power of US$ 2 in different countries, the World Bank has tried to solve this problem with a successful world-wide effort to measure PPP (purchasing power parity) for each country and therefore now it is possible to have US$ 2 PPP for each country. But a large limitation of this approach is that rural areas – where the poor live- have been excluded because the PPP was build with domestic CPI (consumer price index), which by definition excludes rural areas.

A second approach, also pioneered by the World Bank, is a poverty survey, well known as Living Standard Measurement Survey (LSMS). A medium size survey (around 5,000 households) is applied in urban and rural areas of any country, with a strong emphasis in food and beverage consumption (as source of calories), plus expenses in other major items of any consumption basket. The main result of this approach is to obtain a poverty line in domestic currency for any given country.

The main pitfall of this approach is the lack of transparency of the assumptions taken for producing a poverty line. Almost every country produces data tabulates; most of them data base access; and almost none computer code applied. The computer code written is essential to identify is a systematic bias have been applied for the published poverty line, as well to learn all arbitrary decision taken on the steps described below.

Step 1: How to define an average poor household? Usually the average is in the half poor of the sample, but there is no international standard to identify it. If the mean poor household is closer to the median household, the final poverty line will be high compare to a mean poor household who is far from the median household.

Step 2: How to define a vicinity of the average poor? After a mean poor household was identified, vicinity must be defined. This could be one tenth, one fifth, one fourth or one third of the sample, and again there is no international standard. For a larger vicinity, a lower poverty line is found, and vice versa.

Step 3: How to define a basket of food and beverages for the extreme poverty line? After steps 1 and 2 are done, the researcher must choose which goods will be taken in account for valorizing the extreme poverty line, which is made setting a price for each product chosen. The exclusion criterion is arbitrary and may produce biases in any direction, according the price of the excluded products.

Step 4: How to deflate prices spatially? Since the survey is applied nation-wide, there are areas were food and beverages are non-market items, because the households in rural areas have an economy of subsistence, where they are producers and consumers at the same time. Theoretically there is many options to imputed prices, but since computer code is not public, a source of bias could be easily masked.

Step 5: How to measure an Engel coefficient for the extreme poverty line? After the extreme poverty line is obtained, it is necessary to produce a total poverty line, which must include non-calorie goods and services. While again, there is a large literature on this subject, without the computer code is impossible to analyze if the poverty line has a bias that overestimates or underestimates real poverty.

Besides these limitations, a poverty line is measured with a survey, and a poverty basket is designed to monitor poverty evolution. All problems of a conventional Laspeyres index are valid, but certainly a national poverty line is better than a US$ 2 PPP line because this measurement includes rural areas, where most of the poor used to live.

The UN MDG (United Nations Millennium Development Goals) has several goals, where Goal 1 is “Eradicate extreme poverty and hunger”, Target 1.C is “Halve, between 1990 and 2015, the proportion of people who suffer from hunger”, Indicator 1.8 is “Prevalence of underweight children under five years of age” and Indicator 1.9 is “Proportion of population below minimum level of dietary energy consumption”.

While Target 1.A and Target 1.B for Goal 1 are related to economic conditions of the poor, Target 1.C is related to biological and anthropometric characteristics of the poor. The main advantage of indicators for Target 1.C is that fewer assumptions are required for its measurement, therefore less built-in steps for biases.

For Indicator 1.8, the most common statistical device is the Demographic and Health Survey (DHS) which is funded by United States International Development Agency (USAID) around the world. The traditional design is a large scale sample around 20,000, which allows to measure demographic and heath variables, applied in intervals of 5 years. A new approach, which has Peru as pilot country started in 2004, sampling every year 6,000 households in a five year plan; this new design is able to produce statistical results for key variables with low variance, and for other variables in 5-year average.

For Indicator 1.9, a World Bank’s LSMS could be used in order to measure caloric intake and caloric needs for each household and from both figures the percentage of population below minimum intake could be obtained.

The graphs below are for Peru where Indicator 1.9 is plotted with inflation in the first and with growth in the second.

Poverty & Inflation (2004 - 2008)

Poverty & Growth (2004 - 2008)

Starting May 2003, Peru was applying a LSMS in monthly basis with an annual target of 20,000 households. This new approach has sampling difficulties that were solve through a technical cooperation program with Statistics Canada, who did the sampling for the first year, and subsequent years were done by Peru’s statistical agency.

For monetary poverty results, an annual sample is cumulated and then a poverty line in domestic currency is obtained as described above. The first result was measured for May 2003 – April 2004, and subsequent results have been published for calendar years.

But the main advantage of this design is to obtain quarterly results for caloric poverty as defined by UN MDG Indicator 1.9. In the graphs above, the bars are annual moving average for caloric poverty, as well economic growth and consumer inflation. The spreadsheet to redo the graphs is available here and was obtained from official sources as described below.

The quarterly results are available in PDF on the web site of Peru’s Statistical Agency, first step is to click in “Boletines” on the left side panel, then to click on “Condiciones de Vida” also on the left side panel, and download the PDF files for each calendar quarter since 2007, and for each moving quarter since 2003.

The other two variables, economic growth and consumer inflation are taken from the web site of Peru’s Central Bank, economic growth is obtained from real quarterly national accounts, with the rate of growth of the moving average of four quarters compared with previous fourth quarters of Gross Domestic Product (GDP). Consumer Inflation have been built from the implicit deflator for private consumption; in order to obtain this index, the private consumption in the nominal quarterly national accounts, is divided by the private consumption in the real quarterly national accounts. The rate of growth follows same procedure for economic growth.

An examination of both graphs offers a clear example that GDP growth by itself will not reduce poverty, and that the inflation level is a more critical tool for fighting poverty. Therefore low growth with low inflation reduces poverty at a steady rate, while high growth with high inflation increases poverty at a steady rate.

• Econometric Analysis

Besides this graphical analysis, an econometric one is feasible and some results are presented below. In first place, the sampling period for the analysis is the whole period for available quarterly measurement of caloric poverty; this is from 2003 Q3 to 2008 Q4, with a total of 22 observations. Data for economic growth and consumer inflation is available quarterly since 1980.

Caloric poverty (CALP) is the percentage of population who lacks the minimum calorie intake; economic growth (GDP) is the difference of logarithm of real GDP in any quarter to similar in previous year; and consumer inflation has same mathematical transformation with the deflator of private consumption (DPC).

The model to be estimated is quite simple, with a perturbation component that fulfill classical assumption for error term of normal distribution, serial independence, and homocedasticty:

CALP{t} = BETA0 + BETA1*DPC{t} + BETA2*GDP{t-1} + U{t}

The data could be found here, the RATS source code could be found here, and the RATS output file could be found here.

An initial regression was tried with GDP impact in same period, but GDP lagged one period showed a better result. Therefore changes in inflation have a faster impact on poverty than growth rate, which is not surprising that a nominal variable has faster impact than a real variable.

The best result provides BETA1 and BETA2 coefficients with null hypothesis of zero value rejected at 99% confidence, when the first observation of the sample is excluded, having as result a total of 20 observations for the analysis.

Another important result also showed in the output file is that null hypothesis of BETA1 and BETA2 having similar value with opposite sign is always accepted, with several sampling periods. This allows conclude that lowing inflation has the same impact that increasing growth rate.

Finally, the econometric evidence reaffirms what was intuitive on the graphs. Not only economic growth matters for fighting poverty, also matters low inflation in equal degree.

Wed Apr 23, 2003 5:14 am

Maquillador busca espejo

Cuando somos niños leemos “Blancanieves” (Schneewittchen) de
Jakob Grimm y Whilhelm Karl Grimm, cuando somos adultos
leemos “Psicoanálisis de los Cuentos de Hadas” de Bruno Bettelheim.

El maquillador en cuestión quien borró “Matuk (con corbata
michi roja) responde” de la base de datos de GatoEncerrado
(publicado el 12 de febrero) como se demostró en el mensaje 2708 de
este grupo, vuelve a la luz pública para deleite de su público. Como
en la ocasión anterior, seguiremos el mismo formato, aunque esta vez
no bíblico.

1) En el cuento que recordamos todos de la infancia, el
espejo siempre dice la verdad, y en algunas versiones el espejo es
roto por dicha razón, en otras versiones sirve para ver qué hace
Blancanieves. En ningún caso miente. Una cita adecuada de Lacan para
entender este olvido es “El ojo y la mirada, tal es para nosotros la
esquizia en la que se manifiesta la pulsión al nivel del campo
escópico”.

2) Para ser totalmente justos, una reina mala que ha sido
omitida es Richard Webb, Presidente del Banco Central, ya que el PBI
oferta trimestral del BCR es la suma simple de los dichosos PBI
mensuales, y el PBI demanda trimestral del BCR se ajusta pasivamente
al de oferta.

3) Este párrafo no cumple las dos condiciones Hawkin-Simons,
que son (1-a[11])*(1-a[22])-a[12]*a[21]>0 y (1-a[ii])>0, para
quienes no la recuerden pueden releer Leontieff.

4) Dicho sea de paso, haber trabajado seis años como
consultor residente en Bolivia, Nicaragua, y Yugoslavia, de los
cuales tres pagados por USAID, dos por el BID, y uno por Banco
Mundial me califican de auditor de cuentas nacionales.

5) Hasta el boletín de Octubre de 2002 del Instituto, donde
se publica el obituario del PBI mensual, la discusión central de los
especialistas era que el nivel del PBI estaba errado, tal como lo
refirió Caretas poco después; pero ahora se tiene un maquillador con
aspiraciones de Mesías.

6) Aquí el mesías precisa “… jefe del INEI ha salido a dar
la cara …”, cuando en realidad es una simple continuación del
trabajo de investigación iniciado hace mas de seis meses en torno al
PBI mensual para discriminar qué porción del denominado PBI mensual
es basado en información de campo y cuál en trabajo de gabinete.
En “… (el 36.9 % para ser exactos) …” no es exacto porque el “6”
debió ser “0”.

7) En realidad, la información de un Censo Económico Piloto
fue anunciada en una conferencia de prensa habida en la Presidencia
del Consejo de Ministros del jueves 10 de Abril, bastante antes de
Semana Santa, a fin de dar una solución definitiva al problema del
año base de las actuales cuentas nacionales. (Usualmente los
maquilladores son impotentes frente a la belleza natural).

8) Medir al “tun tun” es hacer una medición sin una regla
fija, como puede ser el caso de otras mediciones del PBI que son
incapaces de mostrar la regla matemática que existiría como
sustento. El INEI es la única institución que tiene una regla
matemática de público conocimiento, y es grave no ser capaz de
reconocer que la regla de tres compuesta es un artificio matemático
específico, y éste a su vez es un caso particular de una regla
matemática.

9) En una presentación habida ya hace varias semanas, donde
la idea del “PBI duro” fue expuesta, Bruno planteó la crítica mas
importante a esta hipótesis. Esta crítica es el fuerte peso del
sector primario en este índice sintético, pero la alternativa
inmediata sería mantener un índice del todo extremadamente difuso.
En ese sentido se ha adoptado una solución existencialista (a la
Sartre) publicando ambos índices a partir del próximo boletín.

10) Creer que solo Pesca, Minería, y Electricidad y Agua son
confiables implica una enorme ingenuidad, ya que en realidad el
problema central del “PBI duro” es asumir coeficientes fijos entre
el valor bruto de producción y el valor agregado. Más bien el “PBI
duro” debiera ser visto como un índice de volumen, porque aún
viéndolo como Valor Bruto de Producción a precios constantes implica
la ingenuidad de delatores relativos entre sectores constantes.

11) “Es obvio que el pais crece” debiera ser el título del
artículo comentado si éste hubiera sido escrito de buena fe. Porque
efectivamente, existe una coincidencia entre distintos indicadores
de la tendencia económica. Finalmente, considerar “laboratorio” al
edificio del INEI es inapropiado, porque todo el frente del edificio
fue cubierto de mayólica, material usualmente hallado en cocinas o
baños.

Farid Matuk

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http://gatoencerrado.terra.com.pe

Desde el faro: “El espejo mágico en Blancanieves” por: Rafael Hidalgo

1. El famoso espejo de la reina mala del cuento “Blancanieves y los
7 enanitos” de los hermanos Grimm que al ser preguntado “espejito,
espejito, ¿hay alguién más bella que yo?” contestaba: no; cada día
que pasa se asemeja a la actual medición del PBI en el Perú.

2. Cuál reinas malas, mensualmente, el presidente Alejandro Toledo,
el primer ministro Luis Solari y el ministro de Economía Javier
Silva Ruete preguntan al Instituto Nacional de Estadística e
Informática (INEI) ¿Cuál es el país que más crece en el mundo? y el
INEI contesta: el Perú.

3. Lo cierto, es que la actual metodología para medir el PBI fue
culminada por ex jefe del INEI, Félix Murillo ( un verdadero rey del
maquillaje estadístico), en las postrimerías del gobierno de Alberto
Fujimori (30/6/2000), de tal manera que sirviera para ofrecer la
visión de un país boyante en el tercer período fujimorista 2,000-
2,005.

4. Tan escandalosa era esta farsa estadística que el presidente
Alejandro Toledo, en otra de sus famosas promesas electorales,
señaló en campaña “que en mi gobierno, llevaré a cabo una auditoría
internacional para revisar el cálculo del PBI”.

5. Sin embargo, olvidando su promesas, el ministro Silva Ruete
sostiene sobre la base de la “metodología Murillo” que el PBI del
Perú creció 5.2 % en el 2,002 (según el valor preliminar del INEI),
¡y en marzo llegó a la cifra record de 9.3% (pronóstico del MEF)¡.
Todo un “milagro económico”, pero, el ciudadano ¡ay¡, siguió
lateando.

6. El economista Farid Matuk, actual jefe del INEI ha salido a dar
cara a la prensa reconociendo que apenas en la tercera parte de la
actividad económica (el 36.9 % para ser exactos)se recaba
información de campo, es decir, de manera directa. “El PBI duro”
Matuk dixit.
Sólo en el cálculo del crecimiento de los sectores agropecuario,
pesca, minería, manufactura, electricidad y agua, el INEI cuenta con
cifras de respaldo.
7. Apelando a un propósito de enmienda saludable (luego de la Semana
Santa), el jefe del INEI acaba de anunciar que iniciará en mayo un
censo económico para el cálculo del PBI trimestral para desterrar
legítimas suspicacias. (La participación de la guapísima Vanesa
Robbiano cómo encuestadora aún se mantiene en suspenso).

8. Dicho de otra manera, el crecimiento del resto de la economía que
representa más de la mitad de la actividad económica, los sectores:
comercio, construcción, salud, educación, turismo se miden al tun
tun. “Artificios matemáticos” (o “regla de tres compuesta” según una
versión anterior) en la eufemística lexicología del INEI.

9. Lo grave del asunto es que ni siquiera este “PBI duro” es
confiable. Según el economista Bruno Seminario, profesor principal
de la Universidad del Pacífico, “las oficinas sectoriales de
estadísticas de los ministerios (que recogen la información mensual)
no cuentan con suficientes recursos” (La República 23/3/2003). Añade
Seminario, “que se producen problemas en la elaboración del índice
de producción industrial (21.3 % del PBI global) y en la estadística
agraria (7.8 %)”. Los otros problemas que encuentra el analista es
que se carece de un directorio de empresas confiable lo que impide
proyectar los resultados de la muestra al universo.

10. En conclusión, apenas el 8 % de la la actividad económica,
(pesca, minería y electricidad y agua) explican de manera confiable,
con cifras a la mano, los famosos valores preliminares del PBI que
volantea el gobierno (“estimados legítimos” Matuk dixit).

11. Es obvio que el país crece. Pero, no a la velocidad que pregona
el gobierno para contrarrestar sus fracasos y escándalos políticos.
Esta quimera económica fabricada en los laboratorios del INEI por el
momento no pasa de ser un cuento cómo el de “Blancanieves y los 7
enanitos”. Donde la primera Dama largamente se ajusta al papel de
Blancanieves y los siete enanitos, salvo mejor parecer, podrían ser
Toledo, Luis Solari, Carlos Ferrero, Jorge Mufarech (¿cuál es el
gruñón?), César Almeyda, Willy Gonzales y Kurt Burneo.

4/22/2003 1:00:00 PM

http://groups.yahoo.com/group/MacroPeru/message/2788

20080527 – Farid Matuk: ‘La reducción de 5,2% de pobreza es una cifra inverosímil’

9:30 | El ex jefe del INEI durante el gobierno de Toledo cuestionó los resultados y pidió más transparencia en medición

Farid Matuk, ex jefe del Instituto Nacional de Estadística e Informática (INEI) durante el gobierno de Alejandro Toledo, dijo que la reducción de 5,2 puntos en el porcentaje de pobreza es una cifra inverosímil, como también lo es la variación de 9,4 puntos respecto a la cifra oficial del 2005 (48,7%).

“Me gustaría saber en todo caso qué dicen el señor Alva Castro, el señor César Zumaeta y otros que me atacaron cuando anuncié que la pobreza del 2006 había sido de 48%, lo cual significaba una reducción de 6 puntos durante el gobierno de Toledo”, expresó en conversación con El Comercio desde Iraq. Cuando el INEI ajustó la metodología, la pobreza oficial del 2006 pasó a 44,5%.

Matuk pidió al INEI publicar el programa de cómputo elaborado por el equipo de Javier Herrera (ver recuadro en la nota de arriba), en base al cual se imputan los valores monetarios a los bienes consumidos por la población en pobreza. “Yo creo que lo que él hace es un producto artístico, no reproducible y agradable a los ojos de los que lo aprecian. Pero no es un producto científico”. Según Matuk, cuando él fue jefe del INEI, la institución terminó por contratar a otro investigador, pues Javier Herrera, quien hace la medición de pobreza para el INEI desde la gestión de Félix Murillo, nunca quiso entregar el programa de cómputo con el cual replicar los resultados.

Por su parte, para Herrera, las afirmaciones de Matuk son completamente falsas y que los programas de años anteriores sí han sido entregados al INEI. También afirmó que los programas empleados en esta última medición de la pobreza se entregarán dentro de algunos días, tal como lo pide el comité asesor liderado por el Banco Mundial.

Vale precisar que tanto durante la gestión de Farid Matuk como en la actual línea de pobreza se estableció otorgar valores en soles a los bienes mínimos que deben consumirse para cumplir con el requerimiento calórico. Este último lo establecen organizaciones internacionales, como la Organización Mundial de la Salud y la FAO.

http://www.elcomercio.com.pe/ediciononline/HTML/2008-05-27/farid-matuk–la-reduccion-52-pobreza-cifra-inverosimil.html

PERU: Upbeat Poverty Stats Questioned

By Milagros Salazar

LIMA, May 29 (IPS) – The Peruvian government has announced that poverty fell by 5.2 percent in a year and forecasts that by 2015, less than 10 percent of the population will be below the poverty line. But experts and provincial governors cast doubt on these figures, given the unmet basic needs of peasant families.

“These poverty figures show that Peru’s economic model is working,” Finance Minister Luis Carranza said on Wednesday after announcing that according to the National Institute of Statistics and Informatics (INEI), the proportion of people living in poverty dropped from 44.5 percent of the population in 2006 to 39.3 percent in 2007.

This means that nearly 1.4 million Peruvians have escaped poverty, and is an improvement on the 42 percent poverty rate projected by the authorities. President Alan García celebrated the result, saying that he had not been over-optimistic when he promised that by the end of his term, in 2011, poverty would be reduced to 30 percent.

“I can tell the country that my aspirations go even further and that by 2015 we will have a poverty rate of less than 10 percent of the population, which means that Peru will no longer be a Third World country,” said the president, making a forecast that exceeds his five-year term of office.

Meanwhile, the proportion of people living in extreme poverty shrank from 16.1 percent to 13.7 percent of the population. The country’s Andean highlands, as opposed to the coastal and Amazon jungle regions of Peru, are home to 67.5 percent of the extreme poor.

The results of the 2007 census, to be released on Jun. 9, will give a more precise idea of how many people have been lifted out of poverty, and what extrapolations can be made, said the head of INEI, Renán Quispe.

President García did not make allowances in his calculations for population growth, which is occurring at a rate of 1.3 percent a year. According to the latest official statistics, 27.2 million people live in Peru.

But Farid Matuk, a former head of INEI, said that the figures given out by the authorities were not credible.

“In spite of the nine percent gross domestic product growth posted in 2007, the García administration could not possibly have managed to reduce poverty by nearly 10 percent in two years, when the previous government of President Alejandro Toledo only achieved a fall of six points in five years,” Matuk told IPS.

The expert also said the García administration has manipulated the figures by increasing the 2005 poverty rate by nearly four percentage points, from 44.5 to 48 percent of the population, by changing the method used to measure poverty.

“These results are completely illogical. I suspect that urban incomes have been inflated in order to show this reduction in poverty,” Matuk said.

That would explain that poverty was reported to have fallen most in urban areas, from 31.2 to 25.7 percent.

But the figures show apparent improvement in rural areas as well. Between 2005 and 2006 rural poverty fell by only 1.6 percent, but in 2007 it was reduced by 4.7 percent.

The highlands region showed the least progress in fighting rural poverty, with a total reduction of only 3.2 percent, while in coastal rural areas poverty dropped by up to 11 percent.

In Matuk’s view, the INEI experts may have overvalued the prices assigned to the food grown by rural families

Since many families, mainly in the rural areas, grow their own food or provide their own essential services, such as water, INEI assigns these goods a value which, in Matuk’s opinion, should be made public, in order to assess the reliability of their figures.

Based on this method, INEI set the poverty line at 229.4 soles (82 dollars) a month per person, and the extreme poverty line at 121.2 soles (43 dollars) a month. Persons consuming less than these amounts are considered poor, or extremely poor, respectively.

“It’s important to know what price was assigned to some foods like eggs and potatoes, and also, for example, what value was established for ‘self-rent’ in marginalised urban areas. So far none of this is known, so the poverty lines are a mystery,” he said.

In response to the criticism, INEI published this information on its web site on Tuesday, and experts are now analysing it. INEI emphasised that it had received advice from the World Bank and several research centres in drawing up its report.

“The results are in compliance with international guidelines, and most importantly, they are transparent,” said World Bank regional director Felipe Jaramillo.

Matuk said that one way of demonstrating that the economic growth achieved between 2006 and 2007 had no impact on the living conditions of the majority of the population is that hunger had only been reduced by just over one percent — “in other words, hardly at all” — over the same period.

For his part, Pedro Francke, an economist at the Pontificia Catholic University, concluded that the method used by INEI did not take into account higher food prices, and was only showing one side of poverty. He said the institute should use a much broader form of measurement that is not only monetary.

“The quality of health and education services that are provided to the population should be measured, as well as whether or not people have identity documents, and what access they have to democracy, for example,” said Francke.

Several provincial governors expressed doubts that poverty reduction in their area could have been as great as the statistics suggest, especially in provinces where historically over 70 percent of the people were considered poor.

“The statistics must have been manipulated, because people are still protesting in the streets due to the fact that they are not seeing the benefits of economic growth. INEI does not measure poverty in villages and towns in the rural areas, where the extreme poor are concentrated,” Hernán Fuentes, the governor of Puno, told IPS.

In his southern Andean region, poverty fell from 76.3 percent to 67.2 percent, according to the official figures.

The poverty rate also fell in Ayacucho, another southern Andean province, from 78.4 to 68.3 percent. “We were sure that poverty had fallen by three or four percent, but not to such an extent. I hope it’s true,” said Governor Ernesto Molina.

Loreto, in the northeast, is the province that apparently made the most progress, with a spectacular 11.7 percent drop in the poverty rate. Governor Iván Vásquez said that such a reduction was indeed possible, but mainly in large cities like Iquitos, the provincial capital, where over half of the population lives.

In Cuzco, however, the poverty rate rose from 49.9 to 57.4 percent. “The social programmes aren’t working, because out of every 10 soles the government allocates to fight malnutrition or poverty, six are swallowed up by bureaucracy,” said Governor Hugo González.

Huancavelica remains the poorest province, with 85.7 percent of the population below the poverty line, after a reduction of barely three percent. ( END/2008 )

http://www.ipsnews.net/news.asp?idnews=42586

Peru says got GDP math wrong for 15 years

By Jude Webber

LIMA, Peru, Oct 29 (Reuters) – Peru has admitted it has been reporting its key economic indicator, gross domestic product growth, wrongly for the past 15 years and will publish only partial data from now on until it can correct its sums.  Farid Matuk, who took over as head of the government’s  National Statistics Institute (INEI) in August, told reporters late on Monday it had been a mistake to publish GDP data on a monthly basis since 1987, when every other country in the world except Canada and Finland published quarterly, because monthly figures contained a wide margin of error. Furthermore, he said the way the monthly figures were calculated had also factored in a “false illusion” of the performance of the service sector, meaning that the official data “was not solid” and could not be trusted.
 

INEI will therefore strip the service and trade segments out of its GDP numbers for the next few months, leaving a snapshot of the performance of only around half of Latin America’s No. 7 economy, which is worth around $54 billion on current reckoning and leans heavily on mining and fishing. “I can’t produce erroneous information. I’d rather partial data that is clear than full data that is murky,” Matuk said. While it rebases its index and sorts out its methodology, INEI will publish only what Matuk called “hard figures” on the detailed monthly output of goods in the primary and secondary sectors — agriculture, fishing, mining, manufacturing, utilities and construction — plus tax data. Data for trade and “other services,” which covers mainly transport, financial and public sector services will go.The first set of new-look figures, called “gross value added production,” is due out next week, for September. The government of unpopular President Alejandro Toledo says Peru’s economic performance is stellar in a crisis-wracked region, and is forecasting growth of at least 3.7 percent this year, compared with 0.2 percent in 2001. According to current calculations, GDP grew 3.8 percent in August and 4.1 percent in the first eight months compared with the same 2001 periods.

 

NEW 2001 BASE

Once INEI has sorted out its sums, it will switch to reporting complete GDP numbers, but on a quarterly basis. Matuk said INEI would revise its 2001 GDP data in the next few weeks, according to the current 1994 base year and method of reckoning. But it will not publish full 2002 GDP data – that will be up to the economy ministry and central bank.  He hoped that by July 2003, INEI would be ready to publish the total value of Peru’s economy, in dollar terms, according to a new 2001 base, followed by quarterly GDP data. That was likely to have a delay of six months to begin with. “There was a lot of resistance within INEI (to the new method of calculation),” Matuk said. “But either we perpetuate the fiction or we sort out the information, and I think sorting out the information is the right thing to do.”

Current GDP data uses information provided voluntarily by some 30,000 companies, but Matuk said INEI also had extensive data from household and employment surveys from nearly 40,000 homes nationwide that would help complete the picture. France’s national statistics agency is providing the software for the new calculations, and is sending a team of experts to Peru next month to help INEI get to work. Matuk said Peru was also working with other countries on a World Bank project to harmonize calculation of purchasing power parity by 2005 based on a basket of 4,000 universal goods.

 

 

((Lima newsroom, tel: +511 221 2130, fax +511 221 2133, e-mail: lima.newsroom@reuters.com)) REUTERS

Sat Nov 23, 2002 1:50 pm

PPP y Deuda

 

“El peso exacto de cada moneda en el índice del Banco Mundial sería
determinado por el producto interno bruto de los países que componen
la canasta, corregido por el costo de vida, dijo Hausmann, y por la
inflación en cada país”

¿Cómo se mide esto? ¿Es por PPP? ¿Cúales son los instrumentos
prácticos”

Gracias, Matuk

— In MacroPeru@y…, “Juan Carlos Odar Zagaceta” <jodar@b…>
wrote:
> Hola a todos
>
> Esta propuesta para el manejo de la deuda externa parece
interesante, pero considerando lo reacios que son los organismos
multilaterales a nuevos instrumentos no sé si el Banco Mundial la
acepte. Además justo ayer salió una Guía para el Manejo de la Deuda
Externa (preparada en conjunto por el BM y el FMI, que se puede ver
en
http://www.imf.org/external/np/mae/pdebt/2002/eng/pdf/112102.pdf),
donde se insiste con lo de siempre (aspectos fiscales, financieros,
etc. saneados), pero no hay (al menos en una rápida revisión; son
366 páginas) novedades significativas, lo que me hace dudar aún más
que las buenas intenciones se concreten.
>
> Saludos a todos
>
> Juan Carlos
>
>
>
> <http://www.gestion.com.pe/imagez/alertdot.gif> PROPONEN
FÓRMULA PARA DISMINUIR RIESGO DE CRISIS FINANCIERAS.
>
>
> <http://www.gestion.com.pe/html/2002/11/22/imagezt/nada002.gif>

>
> Washington.- Un grupo de economistas propuso ayer que el Banco
Mundial implemente un mecanismo para que los países emergentes
puedan emitir deuda en sus propias monedas a fin de disminuir el
riesgo de futuras crisis financieras.
>
> El Banco Mundial debería crear un índice basado en una cesta de
monedas de países en vías de desarrollo, y luego emitiría bonos en
base a ese índice, según la propuesta del profesor de Harvard,
Ricardo Hausmann, el profesor de la Universidad de California en
Berkley, Barry Eichengreen, y el economista del Banco Interamericano
de Desarrollo (BID), Ugo Panizza.
>
> “El riesgo es mínimo, y la ganancia potencial, si estás en lo
correcto, es muy grande”, dijo Hausmann a los periodistas en un
seminario patrocinado por el BID, sobre los descalces producidos por
países que emiten papeles en dólares, euros y yenes, mientras
recaudan impuestos en pesos y reales.
>
> Los académicos y las instituciones multilaterales están poniendo
cada vez más atención a los problemas de manejo de deuda, tras una
seguidilla de crisis de deuda en la última década, desde México en
1994 hasta Brasil, más recientemente.
>
> Varios países latinoamericanos emitieron grandes cantidades de
deuda en los 90, denominada monedas duras, ya que los inversionistas
tuvieron escaso apetito por bonos en monedas locales.
>
> A su vez, colocar deuda a largo plazo directamente en los mercados
domésticos era una opción demasiado costosa.
>
> Sin embargo, una devaluación aumentaba el costo de pagar una deuda
en monedas duras, tal como mostró el caso argentino.
>
> Ayer, el Fondo Monetario Internacional (FMI) dio a conocer un
trabajo, “Guías para el Manejo de Deuda Pública”, donde advierte a
los países que “eviten estructuras de deuda peligrosas que podrían
tener costos más bajos en el corto plazo pero que darían lugar a un
mayor costo en el servicio de la deuda en el futuro”.
>
> El peso exacto de cada moneda en el índice del Banco Mundial sería
determinado por el producto interno bruto de los países que componen
la canasta, corregido por el costo de vida, dijo Hausmann, y por la
inflación en cada país.
>
> La participación del Banco Mundial es la clave, ya que
tendría “una responsabilidad fiduciaria para asegurarse que no está
siendo engañada”, dijo Hausmann. (Reuters)