Mexico's poverty rate rise to 46 percent

Mexico, city

Two million more Mexicans fell into poverty between 2012 and 2014, government data showed yesterday, highlighting the scale of the challenge President Enrique Peña Nieto faces to meet his pledges to lift millions into the middle class.

According to a government report, the poverty rate increased by 0.7 percentage points to 46.2 percent last year, compared to 45.5 percent in 2012. That means 55.3 million people in a nation of nearly 120 million live in poverty, said government social development agency Coneval. The level is roughly in line with that in 2010, suggesting that the modest economic growth of recent years has not filtered down to the poor.

The report covers the first two years of Peña Nieto's six-year term. During his election campaign, he pledged to lift 15 million people out of poverty.

The figures also showed a 0.3 point drop in the rate of extreme poverty to 9.5 percent, as government social programmes supported those on the lowest rungs of the income scale, largely among the nation's indigenous population.

Coneval defines poverty as living on no more than 2,542 Mexican pesos (US$157.70) a month in cities and 1,615 pesos in rural areas. The benchmark for extreme poverty was 1,243 pesos in cities and 868 pesos a month in the countryside. The agency also takes into account other factors like healthcare and education.

Between 2012 and 2014, the population without social benefits and with income equal or superior to the welfare line increased from 23.2 million to 24.6 million. The agency considers that 20.5 percent of the population is "not poor nor vulnerable."

That means, according to Coneval, that a total 79.5 percent of the Mexican population may be living in a state of poverty and vulnerability.

More of the poor moved to cities, continuing the trend of urban migration. The poverty rate declined to about 61 percent in rural areas but rose to 41.7 percent in urban areas.

Gonzalo Hernández, executive secretary of Coneval, said that poverty and extreme poverty increased in eight states overall: Morelos, Veracruz, Oaxaca, State of Mexico, Sinaloa, Coahuila Hidalgo and Baja California Sur.

Chiapas remained the poorest state out of 32 regions, including Mexico City, with its poverty rate rising to 76.2 percent last year. Oaxaca edged out Guerrero to become the second-poorest state, with a rate of 66.8 percent.

Both states are on the southern Pacific coast, traditionally the poorest parts of the country.

The increase in food prices and the impact of the 2008 crisis has Coneval estimating that poverty will likely increase this year.

 GOVERNMENT PROGRAMMES

Hernández also said the government has reduced the gaps in education, healthcare and social security in the poor population, but has not improved access to housing and food.

Peña Nieto, who took office in December 2012, has implemented a barrage of economic, education and tax reforms aimed at revitalizing Mexico's economy. He has also launched an anti-hunger campaign, Cruzada nacional contra el hambre or "Crusade Against Hunger."

Despite reported progress in the coverage of basic services in education, healthcare and housing, the agency says the quality of basic services offered to the country's poorest is not growing at the same "speed."

"The increased spending has resulted in better coverage, especially with families, in education and healthcare, but this expenditure has not automatically translated into improving the quality of those services, said Hernández. "Of course educational reform eventually improves the quality of education. That will not happen tomorrow."

Hernández said that family income has suffered since 2007 as food prices rose, becoming volatile with the 2008 world financial crisis. The figure, says Hernández, hasn't improved and is a main cause for the level of poverty that exists today.

"For 30 years, Mexican families' income has hardly risen or even declined marginally, and in order to improve there should be an increase in productivity, which is sometimes a difficult element measure." said Hernández.

 UNEQUAL GLOBAL SCALE

Each country has its own method of measuring poverty, making comparisons difficult on a global scale.

The United States, for example, compares pre-tax cash income against a threshold that is set at three times the cost of a minimum food diet set using the Consumer Price Index, corrected by some social adjustments.

The UK, meanwhile, marks the line at household income below 60 percent of the nation's median income, similar to many European countries.