Poverty and Inequality Decline in Venezuela

Mérida, December 24, 2008 (venezuelanalysis.com)– Over the last decade, Venezuela’s poverty has decreased, and this has seen a corresponding decrease in inequality and an increase in over all development.

Poverty down by 24.5 percentage points

According to the latest statistics from the National Institute of Statistics (INE), poverty in Venezuela has dropped by 24.5 percentage points over the last decade, from 50.5% poverty in 1998 to 26% at the close of 2008.

The president of the INE, Elias Eljuri, also calculated that extreme poverty, at 7% for this year (down from 25% in 2002), continues to decrease as well. He attributed the decrease in poverty to the social programs implemented by the national government.

He also pointed out that that the statistics for poverty and extreme poverty, audited internationally by the Economic Commission for Latin America and the Caribbean (Cepal) showed a decrease of 2.5% and 0.9% respectively for 2008 compared to last year.

Further, he said the INE poverty information was obtained based on household incomes. “We didn’t take into account all the subsidies, for example the four million children who eat [for free] in Bolivarian schools, the free health services, both of which…decrease the amount of poverty.”

Lowest inequality in Latin America

Venezuela’s social inequality index (also known as Gini coefficient) this year is 0.42,where on a scale of 0 to 1, 0.49 is low, 0.49-0.70 is medium, and 0.80-1 is high inequality, making it the lowest in Latin America, including Chile and Costa Rica, which had the least inequality in 2007. The average social inequality in Latin America is 0.52.

The CIA and United Nations do not measure Cuba’s inequality.

Eljuri believes, however, that it is necessary to improve the redistribution of income even more in Venezuela.

Venezuela’s human development index higher than 118 countries

According to a preview of the annual report of the United Nations Program of Development, Venezuela has a higher index of development than 118 countries, located in 61st place.

The index measures quality of life, including life expectancy, education and purchasing power.

“Fundamentally, life expectancy has improved, enrollment [in education] has increased and purchasing power, which is measured through income, has also increased in a significant way,” said Eljuri.

Looking at all the countries of Latin America, Venezuela falls in 13th place out of 33 countries, ahead of Brazil, Peru, and Ecuador.

The index ranges from 0 to 1, where less than 0.49 suggests low human development, 0.49-0.79 is a medium level of development, and 0.8 – 1 is a high level. Venezuela has an index of 0.834, up from 0.78 a decade ago.