November 26, 2014
UCA puts poverty rate at 27.5 percent
Days after the INDEC cancelled its planned release of official poverty data, the Argentine Catholic University (UCA) yesterday released its estimates for poverty in the last quarter of 2013, with an upper estimate of 27.5 percent. That is almost 10 percent lower than the 36.5 percent reported by former INDEC employees earlier this month, and far from the last official poverty rate of less than 5 percent.
The barrage of numbers demonstrates how the absence of reliable official data makes it difficult to determine the real rate of key social indicators and muddying the waters of public discourse on the issue that is critical to figuring out where social spending needs to go.
The basic methodology to determine the poverty rate is to price two baskets of goods required by an average family, a minimum basket of goods and services for a household and another more critical one that sets a basket of food products necessary to sustain a healthy diet. Families with incomes that cannot meet the first basket are considered to be in poverty and those that cannot meet the Food basket are considered to be in destitution.
It is the uncertainty over prices for goods and of average incomes, given the lack of trust in indicators produced by the INDEC, that has resulted in the production of rival indices that cannot be reliably evaluated by the average citizen.
Lots of noise, little clarity
The Argentine Catholic University (UCA) yesterday released its estimates for poverty in the last quarter of 2013, with an upper estimate of 27.5 percent of the population considered to be the poverty line, which is set by the university at 4,142 pesos for an average household. The figure would suggest that more than 10 million people cannot meet what is known as the Total Basket of Goods, which is compiled using data generated by private sources such as the price index distributed by opposition members of the Congress.
According to the UCA, 5.5 percent of the country’s population is below the extreme poverty line, indicating that they cannot afford to purchase a basic food basket, priced by the university’s researchers at 1,982 pesos for an average household.
The measurements suggest an increase in the poverty rate of 1.1 percentage points from the previous year and a reduction of extreme poverty by 0.3 percentage points in comparison to last year.
In comparison, measurements released two weeks ago by the Institute of Public Policy and Thought (IPyPP) drafted by former INDEC employees suggests a walloping poverty rate of 36.5 percent and an extreme poverty rate of 12.1 percent. The baskets set by the IPyPP are significantly higher than those calculated by the UCA, with the basic food basket that measures destitution set at 3,435 pesos and the total basket of goods reaching up to 6,700 pesos for those who have have to pay rent. The report was overseen by Claudio Lozano, an economist and opposition politician with the Popular Unity bloc.
The poverty rates suggested by the UCA and IPyPP would place Argentina among the worst in Latin America, a suggestion that seems improbable on its face.
The INDEC, which this week failed to meet the scheduled publication of its poverty rates because of “severe methodological deficiencies” in adapting its statistics to the revamped, IMF-friendly consumer price index, last published a poverty rate in October 2013, which indicated that 4.7 percent of the country’s more than 40 million people are poor.
In the same INDEC report, 1.7 percent of citizens, or one-in-70, fell into the category of extreme poverty.The government debuted a new CPI in January of 2014. The INDEC had previously calculated a Total Basket of 1,750 pesos and a Food Basket of 759.35 pesos in 2013 to calculate those rates, figures dramatically lower than those used by the UCA and IPyPP and suspected of being grossly underestimated.
In a brief press release after the poverty rate was withheld this week, the INDEC said that the “objective is to continue providing trustworthy instruments that allow for the design and implementation of public policies.”
However, “when the poverty and extreme poverty index is made known again, it will be because issues of methodology and cohesion will have been resolved,” said Cabinet Chief Jorge Capitanich during his daily early morning news conference. Until then, the real poverty rate for Argentina will continue to be a mystery.