POVERTY IN PERU

Poverty is a phenomenon that has many dimensions, so there is no single way to define it.
For the purposes of its practical study, most of the time, poverty has been defined as the
inability of a family to cover a basic subsistence basket with their family expenses.
Similarly, in the event that family spending fails to meet the requirements of a food basket,
the family is identified as extreme poor. Combining both definitions, a family can be non-
poor, poor or extreme poor. Although there are other very important methodological
approaches, this is the most widespread, so it will be used as the main reference for the
analysis of the problem of poverty in Peru.
In a market economy, the State has a very important role to play in the fight against
poverty, to allow a greater degree of equal opportunities. Attacking the problem of poverty
is a necessity, not only for humanitarian reasons, but also for economic reasons. Poverty is
a vicious circle that, in addition to having serious effects on the quality and living standards
of poor Peruvians, affects the possibilities of economic growth and social and political
stability. Families facing a situation of poverty are affected by sequelae in nutrition, health
and the ability to receive instruction that in many cases cannot be traced, even if income
improves. A poor population has a low life expectancy, suffers from high rates of disease
incidence, is a low-skilled workforce and, therefore, constitutes an unproductive workforce.
In the last 10 years, Peru, like other countries in the region, significantly increased the
resources allocated to numerous social programs to alleviate poverty and favor the
development of the population with less resources. Various elements of judgment suggest
that the effectiveness of these programs can be significantly improved. Even with
limitations, these programs, coupled with economic stability and general economic growth,
allowed a significant reduction in poverty until 1997.
However, it is likely that the economic recession of the last 2 years has caused a
deterioration of the situation, for which there are no indicators yet.
All of the above points to the need to analyze, in a technical manner, the magnitude of the
problem and the policy options that may be most effective in addressing this very important
problem.

Factors that motivated the momentum:

• First, there are two factors that could well match the current reality: a serious
political crisis.

• On the other hand, the 1998 El Niño phenomenon strongly contracted credit, caused
bank failures, a slowdown in the economy until 2001. For its part, CAF(The Andean
Development Corporation) estimated that the damages amounted to US $ 3.5 billion,
more than 4, 5% of GDP in 1998.

 Well, now Peru was the country with the highest percentage of multidimensional
poverty reduction in the last decade, its reduction was from 20% to 12.7%, said the
UNDP (The United Nations Development Program).