Thursday, August 06, 2015

Mexico - When "helping" doesn't help

Mexican reforms to combat poverty have failed.

Initiatives like the Programme of Direct Support for the Countryside (PROCAMPO), which shelled out some $4 billion in subsidies this year – money that will mainly benefit big agroexporters in northern Mexico, even though the programme was initially aimed at helping small-scale farmers weather the impact of the North American Free Trade Agreement (NAFTA) in effect between Canada, Mexico and the United States since 1994. $15 billion a year in subsidies for gas and electricity mostly benefit the bigger consumers. Some $7 billion dollars a year go into 48 federal programmes focused on production, income generation and employment services. A similar amount goes towards financing Prospera, a programme to foment social inclusion – formerly known as Oportunidades and Seguro Popular. Prospera is a conditional cash transfer programme which offers families cash grants conditional on school attendance and regular health checkups for children, while Seguro Popular extends health insurance to people not covered by other social security services.

The rise in poverty highlights not only the shortcomings of Prospera, but also of the National Crusade Against Hunger, conservative President Enrique Peña Nieto`s flagship programme, which targets people living in extreme poverty and suffering from malnutrition. The aim of the Crusade, which is concentrated in 400 municipalities and involves 70 federal programmes, is to reach 7.4 million people, 3.7 million of whom live in urban areas and the rest in the countryside.

Edna Jaime, the head of México Evalúa, a think tank on public policies said implementing the strategy “is a very complex task” because of its design and multisectoral structure, and the risk of falling into clientelism. “There are instruments for assisting the poor that have proven themselves to be more effective. The Crusade has not had the desired success,” she said. México Evalúa, which forms part of the Citizen Action Against Poverty network, has publicly expressed its concern about the initiative ever since it was launched in January 2013, a month after Peña Nieto was sworn in.

Official figures show an increase in the number of poor in the last two years, despite the billions of dollars channeled into a broad range of programmes aimed at combating the problem. According to the latest survey by the National Council for the Evaluation of Social Development Policy (CONEVAL), published Jul. 23, 55.3 million people live in poverty in Mexico – three million more than in 2012 – equivalent to 46.2 percent of the population of 121 million.

Of the total number of people in poverty, CONEVAL found that 12 million have incomes of less than a dollar a day, and another 12 million have incomes of less than two dollars a day. The current minimum wage of roughly five dollars a day is one of the lowest in Latin America, according to the Observatory of Wages at the Ibero-American University in Puebla.

Mexico runs counter to the general trend as one of the few countries in the region that have not been successful in reducing poverty, along with Guatemala and El Salvador, according to the United Nations Development Programme (UNDP) Human Development Report 2014.

“Mexico is one of the few countries which, instead of reducing poverty, saw the progress made in the past decade grind to a halt. The elements that have hindered progress are the not so high economic growth, and the fact that spending does not have a redistributive effect,” the coordinator of the UNDP report in Mexico, Rodolfo de la Torre, told IPS. The expert said the momentum behind some of the anti-poverty programmes has let up, “which means they have started to lose their effect on reducing poverty. 

The Economic Commission for Latin America and the Caribbean (ECLAC) downgraded its forecast for GDP growth in Mexico this year from 3.0 to 2.4 percent – too low to generate the one million new jobs needed. “If productivity and wages don’t go up, poverty won’t be reduced via the route of incomes,” said Jaime. “The provision of social services like healthcare, education and housing must be guaranteed, as well as more rational and better designed budgets for anti-poverty programmes and policies.” In the view of the UNDP, Mexico cannot wait for economic recovery to fight poverty. “The way spending is channeled towards the neediest must be modified. The funds don’t reach the poorest of the poor; the programmes are not sensitive to regional deficiencies or deficiencies affecting particular groups or individuals,” De la Torre complained.

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