Some updates on poverty and inequality in Bolivia

Bolivia Information Forum

In July 2011, in response to a polemical document issued by a number of critics of the Morales government, Vice-president Alvaro García Linera published a lengthy response (‘El ‘Oenegismo’, enfermedad infantil del derechismo’) in which – amongst other things – he drew attention to the government’s achievements in the social arena. Here we simply seek to disseminate some of the official data on which García Linera based his case. Poverty Using data from the Unidad de Análisis de Políticas Sociales y Económicas (UDAPE – the government think tank), gleaned from the Household Surveys conducted by the Instituto Nacional de Estadística (INE), we can see that: Those living in poverty fell both as a proportion of the population and in absolute terms between 2000 and 2010. In 2000, 66.4% of the population lived in poverty, falling to 60.6% in 2005 and to 49.6% in 2010. Numerically, there were 5.64 million people living in poverty in 2000, 5.71 million in 2005, and 5.17 million in 2010. The percentage of the urban population living in poverty fell from 54.5% in 2000, to 51.5% in 2005, and 41.7% in 2010. The equivalent figures for the rural population were 87.0%, 77.6% and 65.1%. The proportion of people living in extreme poverty fell from 45.2% in 2000, to 38.2% in 2005 and to 25.4% in 2010. The urban population living in extreme poverty fell from 27.9% in 2000, to 24.3% in 2005, and 15.5% in 2010. The percentages for the rural population living in extreme poverty fell from 75.0% in 2000, to 62.9% in 2005, and to 44.7% in 2010. This sector of the population corresponds mainly to indigenous peasants. So it can be seen that although poverty levels were on a downward track (at least in percentage terms of a still fast-growing population) before the MAS government took office at the beginning of 2006, the process has been accelerated significantly since then. Inequality Again, citing figures from the National Household surveys produced by INE, García Linera pointed to a notable decrease in levels of inequality in Bolivia in recent years: In 2005, the highest 10% of income earners received 128 times the amount of income than those in the lowest 10%. In 2009, this had been reduced to 60 times. In rural areas, where inequality is even more pronounced, the ratio had been reduced from 157 times to 76 times. In urban areas, the reduction was proportionately less, but still notable. The ratio fell from 35 times to 22 times. It should of course be remembered that monetary income for rural populations, especially subsistence farmers, is not necessarily an accurate guide to poverty. In explaining the reasons behind this improvement in the conditions of social deprivation, García Linera pointed to the role of the state in increasing government revenues (primarily through increasing taxes payable by gas companies), and how this facilitated both social welfare programmes (such as the Renta Dignidad, the Bono Juancito Pinto and the Bono Juana Azurduy) and increased public investment, particularly through building and upgrading infrastructure at the local level. The International Monetary Fund (IMF) has recently brought out information on poverty in Bolivia which echoes some of these findings. Commenting on data which indicates that 1.1 million Bolivians were lifted out of extreme poverty between 2007 and 2009, Gabriel Lopetegui, the head of the IMF mission in La Paz, suggested that this was due in large part to the cash transfer programmes implemented by the government. From Bolivia Information Forum