Colombia's new index to measure poverty merits a cautious welcome

Colombia has become the first country in the world to announce a poverty reduction plan, with binding targets, based on a new "multidimensional" method of measuring poverty. The multidimensional poverty index (MPI) looks beyond income alone, and also assesses education, health and living standards (such as assets and housing). Broadly speaking, the index is good news. Income is a very limited indicator of whether or not someone is poor. Families with very low incomes who live in safe environments and have access to basic goods and services can be less poor than families with higher incomes who live in terrible conditions where it is expensive to meet basic needs.

<...>


Colombia is under great pressure from the international community to address poverty. While other emerging economies are demonstrating impressive reductions in poverty levels, Colombia is saddled with rather depressing statistics. According to World Bank figures, 28% of Colombians – more than 12 million people – are poor (living on less than $2 a day) while 16% of Colombians – 7 million people – are extremely poor (living on less than $1.25 a day).

That puts Colombia 25th on the list of countries with the most income-poor people in the world, on a par with Zambia and Burkina Faso, and second on the list for Latin American countries, behind Brazil.
Colombia's national poverty line would suggest things are even worse; fully 64% of Colombians fall below it. One initial concern with the MPI is that it appears to do Santos a huge political favour. According to the new measure, poverty levels are not at 64%, 28%, or even 16%. They are at 9%. What government could resist taking 3.1 million people out of poverty with a simple change in measurement methodology?

<...>

Colombia's Gini rating, which measures income inequality, has worsened despite rapid growth, while other Latin American countries have improved. Its inequality of land distribution is 0.87 (with one being the most unequal possible). Colombia is now probably the most unequal country in Latin America.

Read more:
http://www.guardian.co.uk/global-development/poverty-matters/2011/aug/30/colombia-new-poverty-measurement-index?INTCMP=SRCH

Here is what the Oxford Poverty & Human Development Initiative (OPHI), which developed the MPI index, has to say:

http://www.ophi.org.uk/wp-content/uploads/Colombia.pdf

As you can see, the second page of the document has a chart showing how other countries measure under this new index, so comparatively speaking Colombia isn't exactly doing too well either. If the Colombian government ever boasts about its MPI, then it would be relatively easy to reply by simply pointing at those of its neighbors, such as Ecuador.

But interestingly enough, the above document was published in mid-2010. The article seems to suggest it would be a rather recent development dating from this year, when in fact it appears to be slightly older. In fact, you need to scroll down to the bottom of The Guardian's piece in order to see a vague general reference to how the concept of MPI as a whole dates from 2010.

Curiously, the current Colombian administration seems to be using a different index altogether instead of the OPHI's MPI. See below for the most recent report from earlier this month:

"Colombian President Juan Manuel Santos has said the government’s poverty reduction goals will remain the same despite revised poverty figures.

The Department of National Planning announced the number of Colombians living below the poverty line dropped from 45.5% to 40.2% due to new assessment methods that take into account access to basic necessities like health, education, and food."

http://colombiareports.com/colombia-news/news/18539-govt-to-retain-poverty-goals-despite-reduction.html

Yet, after reading the original source in Spanish, it seems this 40% figure was measured using new methodology with some help from Oxford too, but it's clearly different from outright adopting the MPI. It doesn't seem like The Guardian's piece took that into consideration though.

"El nuevo índice, que fue elaborado por expertos internacionales de la universidad de Oxford, también revisa si hay o no acceso a servicios públicos o infraestructura.·"

http://caracol.com.co/nota.aspx?id=1536653

At the same time, this discussion is mostly academic. What matters, in my opinion, isn't throwing around different statistics or having a deep methodological discussion but the reality that millions of Colombian have to live on a daily basis. We can always adopt this or that methodology but until Colombia sees real reductions not just in poverty but inequality itself, then little or nothing has been gained despite all these good intentions.