How to measure poverty in El Salvador

Has El Salvador made progress in reducing poverty since the end of the civil war? If so, by how much? Is that progress continuing? As a recent article carried by IPS News points out, answering those questions can be difficult, and some progress is an illusion:

Efforts in some Central American countries have also yielded positive results. El Salvador boasts significant progress in terms of reducing poverty rates -- by around 20 percent -- but discrepancies in methodological criteria for measuring poverty in the country call into question the true magnitude of the achievement.

The National Office of Statistics and Census, which published the first MDG progress report (2004), calculates that 57.8 percent of the country's population survived on less than a dollar a day in 1991. The figure was reduced to 38.9 percent in 2002, or 10 percentage points away from meeting the goal of an overall poverty rate of 28.9 percent by 2015.

In terms of the percentage of people living in extreme poverty, figures taken from the 2005 Human Development Report, based on the Multipurpose Household Survey, El Salvador would be only three percentage points away from reaching its goal: by 2004 rates had been reduced to 15.2 percent, very close to the 2015 target of 12.8 percent.

These indicators raise doubts in the minds of specialists such as UNDP statistics coordinator Jimmy Vásquez. "The estimates are not accurate," he concluded.

Problems arise upon an analysis of the costs of the basic food basket and expanded market basket, which includes services such as electricity, housing, education or health. According to Vásquez, the 1996 basket is registered in the statistics as 10 percent more expensive than the current basket "and anyone who shops can plainly see this is not the case." This, he said, is how the percentage of people living in extreme poverty is being reduced in the official figures.

And to determine the total number of poor, the government uses the expanded market basket, but Vásquez believes these also yield unrealistic results, as the prices of fuel, electricity and housing have increased more than official calculations allow for.

Alvaro Trigueros, head of the macroeconomic department at the Salvadoran Foundation for Economic and Social Development, also mentioned the methodological problems inherent in measuring poverty, but emphasised that the country had made significant progress since 1991, when 25.5 percent of Salvadorans lived in conditions of extreme poverty.

In terms of implementing public policy to fully comply with the MDGs, Trigueros said the government was carrying out useful projects, such as the Solidarity Network plan, which since 2004 has distributed 15-20 dollars per month to the poorest households, to integrate needy children into the educational and health systems and relieve them of the need to seek paid work to support the family.

These statistics also do not clarify whether poverty reduction is a result of government economic policies, or merely a result of the remittances from Salvadorans providing an important source of income in impoverished parts of the country.