The study reveals that the poorest people, who make up the bottom 40% of the income distribution, saw their incomes decrease.
The World Bank published a study that presents a comprehensive view of global poverty following the impact of the pandemic and other crises that have affected the world economy in recent years.
Regarding Peru, the study reveals that the poorest people, who make up the bottom 40% of the income distribution, saw their incomes decrease by a larger proportion (25%) compared to the average population (-20%) between 2019 and 2020. Similarly, Colombia, Ecuador, and Costa Rica experienced comparable losses.
“Remember that, in 2020, poverty reached 30.1% of the population in Peru. This means that around 3 million Peruvians fell back into poverty,” says Oswaldo Molina, executive director of the Network of Studies for Development (REDES).
Nearly 60% of Peruvian households received support from the state during the pandemic. This figure is higher than that recorded in Colombia (40%) and Mexico (30%), among others, while Chile reached nearly 70%.
Specifically, Peru is the country in the region where the most households (80%) had at least one member who stopped working or lost their income due to the pandemic.
The World Bank study indicates that government spending measures to address the health emergency prevented poverty in Peru from being 10.5 percentage points higher in 2020 (it would have exceeded 40% if the state had not intervened).
According to the latest data from INEI, the poverty level in 2021 was 25.9%, representing 8.6 million people. “This figure meant that 1.3 million people who fell into poverty in 2020 ceased to be poor. However, this percentage is still above pre-pandemic levels,” adds Molina.
Additionally, Molina highlights that 34.6% of the population is not poor but is vulnerable. “This means that their incomes and working conditions would not allow them to withstand a sudden shock such as the pandemic, illness, or an emergency, which could push them back into poverty,” he explains.
To resume poverty reduction, we must focus on improving and addressing gaps in access to basic services, formal employment, health, connectivity, education, and other areas that made us vulnerable to the pandemic.
In this regard, the organization presented some recommendations. One is to avoid general subsidies and increase targeted cash transfers.
“We need to rethink and expand social programs so that they can promptly assist the population that has just fallen into poverty, specifically in urban areas where many social programs do not reach,” Molina details.
“This entails improving targeting systems and budgets, as well as consolidating a social protection system that not only seeks to alleviate and reduce poverty but also pays special attention to reducing family vulnerability. For this, the creation of emergency programs should be encouraged,” he adds.
The expert mentions that it is necessary to reactivate the economy and grow sustainably by promoting private investment. “This is fundamental for accelerating the generation of quality jobs for the benefit of vulnerable people,” he emphasizes.
