Colombia adopts new poverty index measure

Source: Thomson Reuters Foundation - Fri, 26 Aug 2011 15:14 GMT
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BOGOTA (AlertNet) - Colombia has adopted a new index to measure poverty to give a more accurate picture of the problem in the Andean nation which aims to reduce poverty by 13 percent over the next four years.

According to the commonly used World Bank definition of poverty -- which classifies people living on $2 or less as poor and $1.25 or less as extremely poor -- 45.5 percent of Colombia’s population of 46 million is living in poverty.

However, that figured dropped to 40.2 percent under the Multidimensional Poverty Index (MPI), which aims to give a more accurate and broader picture of poverty by measuring not just income but other indicators.

"Income poverty doesn’t adequately reflect the different kinds of deprivations poor people face at the same time,” said Sabina Alkire, head of the Oxford Poverty and Human Development Initiative, who helped develop the index.

With data collected from household surveys, the MPI uses 10 indicators to measure different aspects of poverty in education, such as years of schooling and child enrolment in education, and in health, including child mortality and nutrition.

The U.N-backed index also looks at the living conditions of families, whether they have a dirt floor, and what access they have to basic services, such as electricity, drinking water and toilets.

“This method works like a high resolution lens on poverty and reveals a vivid spectrum of challenges facing the poorest households. We can be more precise about what poverty is, see clusters of deprivations, and understand the kinds of problems, deprivations, that batter the lives of the very poor,” Alkire told AlertNet in Bogota.

The MPI can be used to measure and compare poverty across countries, ethnic groups, rural and urban families, and different regions in a country

Development experts say it is hoped governments using the MPI can better pinpoint where to allocate state resources and funding to tackle poverty. The index can help government officials, for example, decide where the need is most for clean water or in which schools to provide free school meals.

“The MPI allows governments to get into the real nitty-gritty about what people need to get out of poverty,” said James Foster, OPHI research associate and co-developer of the MPI being used in Colombia.

The Colombian government has made reducing poverty a key priority, particularly among the 350,000 families who live in extreme poverty.

When poverty in Colombia was measured last year using the new MPI methodology for the first time, the index revealed that among Colombia's poorest citizens all had little schooling, most had informal jobs, and around 70 percent did not have any type of health coverage.

“We’re going to have some new, much more exact tools with which to criticise and control the actions (against poverty) of the state,” Colombian President Juan Manuel Santos said during a speech to mark the launch of the MPI in Colombia earlier this week.

“We (Colombia) can’t continue to keep holding the shameful title of being one of the countries with the highest rates of poverty and inequality, not only in Latin America, but in the whole world,” he added.

The Colombian government has adapted the index to include indicators to measure informal work, overcrowding, child labour and long-term unemployment in households across the country.

One limitation of the MPI is that people on the move may not be accounted for.

“One of the issues we as researchers have to focus on, is how to capture displaced populations,” said Foster, who is also a professor at the George Washington University.

The index, first adopted by Mexico in 2009, is part of a growing global trend in new ways to measure and look at poverty.

Bhutan is in the processing of adopting the MPI and the governments of Chile, El Salvador and Malaysia are looking into how to use the index to tackle poverty.  

“There’s a lot of interest in what Colombia is doing,” said Alkire. “It’s an internationally significant breakthrough in national poverty measurement and reduction efforts as Colombia’s multidimensional poverty measure is tied to the government’s binding multidimensional poverty reduction plan.”