Study indicates poverty reduced in Nicaragua

The International Foundation for Global Economic Development (FIDEG) last week announced new figures from its continuing study of poverty in Nicaragua. According to FIDEG, "The results suggest that in 2010, at the national level, 44.5% of the population lived in conditions of moderate poverty [down from 44.7% in 2009] and 9.0% lived in extreme poverty," down from 9.7%. The FIDEG report said that "the wellbeing of Nicaraguans, measured in terms of consumption, has improved, principally in rural households." With reference to the rural areas, the report noted that moderate poverty was reduced from 67.8% in 2009 to 62.8% in 2010. Extreme poverty dropped from 18.2% to 15.9%. The study surveyed 1,700 households throughout the country with funding from the Netherlands and Switzerland.

FIDEG President Alejandro Martinez Cuenca emphasized that, between 2009 and 2010, in the countryside 37,200 persons emerged from extreme poverty and 124,900 were able to leave behind moderate poverty. Also, in urban areas, 50,000 people emerged from extreme poverty and 14,000 from moderate poverty. He added, "That is not to say that there weren’t people who fell into poverty, but these figures are very encouraging." He said, "People saw positive changes in their welfare throughout 2010 because they were receiving more income particularly in the countryside" with high prices for the crops farmers produce. The report noted, however, that a drop in agricultural prices would have a negative impact on rural households.

Paul Oquist, presidential advisor for national policy, said these current levels were still not acceptable and the goal was to reduce extreme poverty to zero. [The World Bank classifies extreme poverty as living on less than US$1.25 per day and moderate poverty less than US$2 per day per person.] He noted that the United Nations Food and Agriculture Organization has said that Nicaragua will achieve the U.N. Millennium Development Goals, including reductions in poverty and malnutrition, by 2015.

Economist Rene Vallecillo said, however, "The government’s assistance programs impact extreme poverty in rural areas which is where we see the drop in poverty, but we can’t say that the government is reducing poverty but what it is doing is keeping it from increasing." He added that a growth rate of 3.5% to 4% is not enough to make a significant impact; what is necessary is a growth rate of between 7 and 8%.

In related news, the government released figures on June 2 indicating that Nicaragua had generated 325,000 new jobs during the period from January 2010 to the end of the first quarter of this year, mainly in the informal sector, lowering the unemployment rate from 8.2% to 6.8%. Policy advisor Oquist said that the government had created many jobs in the rural informal sector through programs such as Zero Usury.

Labor Minister Jeannette Chavez said that more people are employed in both the formal and informal sector. She explained that in 2007, 320,000 workers were paying into the Social Security system, indicating participation in the formal labor market; by April of 2011 that number had increased to 572,000. In 2007, there were 14,000 registered employers in the country but, by April of 2011, that number had increased to 22,000. (Radio La Primerisima, June 2, 8, 11; El Nuevo Diario, June 9, 13; La Prensa, June 8)

Nicaragua News Service, Nicaragua Network