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Viewing cable 09BOGOTA2805, 20 MILLION COLOMBIANS LIVE IN POVERTY: GOOD NEWS

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Reference ID Created Released Classification Origin
09BOGOTA2805 2009-09-01 22:13 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Bogota
VZCZCXRO6418
RR RUEHLMC
DE RUEHBO #2805/01 2442213
ZNR UUUUU ZZH
R 012213Z SEP 09
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 0459
INFO RUEHBR/AMEMBASSY BRASILIA 9100
RUEHBU/AMEMBASSY BUENOS AIRES 2881
RUEHCV/AMEMBASSY CARACAS 2827
RUEHLP/AMEMBASSY LA PAZ 0245
RUEHPE/AMEMBASSY LIMA 0003
RUEHME/AMEMBASSY MEXICO 0612
RUEHZP/AMEMBASSY PANAMA 4263
RUEHQT/AMEMBASSY QUITO 8784
RUEHSG/AMEMBASSY SANTIAGO 2512
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
UNCLAS SECTION 01 OF 02 BOGOTA 002805 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ELAB PGOV CO
SUBJECT: 20 MILLION COLOMBIANS LIVE IN POVERTY: GOOD NEWS 
OR BAD? 
 
1. (U) SUMMARY.  In late August the GOC released 2008 poverty 
figures showing 46 percent of Colombians live below the 
poverty line, compared with 53.7 percent in 2002.  Extreme 
poverty declined from 19.7 percent to 17.8 percent over the 
same period.  Urban poverty reduction far outpaced that of 
rural poverty, and inequality remained unchanged.  While the 
poverty trendline is moving in the right direction, critics 
note that the GOC will not meet its poverty goals and lament 
that the Uribe years of high economic growth have only 
translated into modest gains against the scourge of poverty. 
 END SUMMARY. 
 
WHAT DOES IT MEAN TO BE POOR IN COLOMBIA? 
----------------------------------------- 
 
2. (U) The 2008 figures were published along with results of 
a joint effort by the National Statistics Agency (DANE), the 
National Planning Department (DNP) and several noted 
economists to make 2008 statistics comparable to 2005 and 
earlier figures that used a different methodology.  (NOTE: No 
poverty statistics are available for 2006 or 2007.  END 
NOTE.)  The poverty line of 270,000 pesos monthly 
(approximately USD 135) per family member is based on a 
traditional measure of income required to purchase a basket 
of basic goods and services, as is the extreme poverty line 
of 117,000 pesos (approximately USD 59). 
 
3. (U) Based on these measures, Colombia's poverty rate 
dropped from 53.7 percent in 2002 to 50.3 percent in 2005 and 
to 46 percent in 2008.  The extreme poverty rate fell from 
19.7 percent in 2002 to 15.7 percent in 2005, but ticked back 
up to 17.8 percent in 2008, primarily due to inflated food 
prices in the first half of 2008. 
 
4. (U) DNP Director Esteban Piedrahita noted that Colombia's 
poverty and extreme poverty lines are among the highest in 
Latin America.  According to Piedrahita, using the region's 
average poverty line would yield a poverty rate in Colombia 
of 40 vice 46 percent. 
 
URBAN POVERTY ERODES FASTER THAN RURAL 
-------------------------------------- 
 
5. (U) The poverty rate in Colombia's 13 largest urban areas 
(which account for 45 percent of the total population) 
dropped from 40.3 percent in 2002 to 30.7 percent in 2008. 
Extreme poverty in the largest urban areas dropped from 9.4 
percent to 6.8 percent over the same period.  While rural 
poverty dropped at a significantly slower rate, income-based 
poverty measures tend to overstate rural poverty, since they 
do not account for food produced for one's own consumption. 
 
INEQUALITY REMAINS UNCHANGED 
---------------------------- 
 
6. (U) The latest numbers indicate a Colombia with the same 
level of inequality it had when President Uribe took office. 
Colombia's Gini coefficient (where 0 means absolute equality 
and 1 means absolute inequality) in 2008 was the same 0.59 it 
was in 2002.  This continues to rank Colombia among the 
highest levels of inequality in Latin America. 
 
POVERTY DECREASE MODEST COMPARED TO HIGH GROWTH 
--------------------------------------------- -- 
 
7. (SBU) During the period 2002-2008, Colombia's economy grew 
an impressive 37 percent.  However, this growth has not 
translated into the decrease in poverty many economists and 
policy-makers had hoped for.  Alejandro Gaviria, Chair of the 
Economics Department of Los Andes University noted that, 
given these recent statistics, the GOC will not meet its goal 
of reducing poverty to 29 percent by 2010.  Fedesarrollo 
think tank director Roberto Steiner criticized Uribe's 
flagship anti-poverty program "Familias en Accion" for its 
emphasis on urban poverty.  He told us the program created a 
"welfare dependence" among poor people that "served certain 
electoral interests, but did not offer long-term solutions to 
poverty." 
 
 
BOGOTA 00002805  002 OF 002 
 
 
8. (SBU) Defending GOC efforts, Piedrahita pointed to a 
marked increase in access to government services and the 
provision of direct food assistance to the extreme poor as 
two significant steps in fighting the effects of poverty, 
which, by definition, would not appear in income-measured 
poverty statistics. 
Brownfield