Poverty has not dropped in Peru, former INEI Director says

LivinginPeru.com
Isabel Guerra

The leftish newspaper La Primera printed today an interview to Farid Matuk, former Director of the National Institute of Statistics and Informatic (INEI), who claims that the economic figures “are being manipulated” by the government.

Matuk affirms that INEI is deliberately adding 2 points to the growth figures and lowering the poverty indicators since 2008, in order to enhance the government's alleged achievements.

“INEI is manipulating the statistics to create a false growth” he said, adding that “the growth and poverty figures are pretty much the same as the ones of the 80's”

Matuk claims that once he was removed from the INEI, the methodology he had setup was discarded, and replaced for a new one that allows the government to alter the statistics, and that “INEI has become a pro-governmental propaganda agency”.

According to Matuk, the Gross Domestic Product (GDP) would be impossible to be measured monthly, so he dismisses the INEI monthly GDP figures as a mere “card readings”.

Matuk, who was INEI's Director during the government of Alejandro Toledo, has a blog where he publishes his analysis and currently lives in Iraq, alleging that he is being politically persecuted by Alan Garcia in Peru.

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# Mike says :
15 May, 2009 [ 12:52 ]

It would be interesting if he would publish his exact formula/methodology for economics that he used.  And the ones they are currently using (since he seems to know that they are different).

# Isabel Guerra says :
15 May, 2009 [ 13:18 ]

One of the hyperlinks leads to Matuk's blog, where he explains his opinions.

# Farid Matuk says :
15 May, 2009 [ 13:22 ]

For further reading in English:

http://www.rgemonitor.com/latam-monitor/bio/fmatuk3/farid_matuk

# Carlos says :
15 May, 2009 [ 13:48 ]

GDP is measured everywhere esle in the world, why is it impossoble here?


Politics and propoganda of the far left

# Farid Matuk says :
15 May, 2009 [ 18:54 ]

Monthly GDP is only measured in 3 countries: Canada (only one from G-7), Finland (only one from Western Europe), and Peru. What Peru does is a fake measurement of value added since 1987, when Garcia was President, and forced to the statistical agency to produce this absurdity.

# Carlos says :
15 May, 2009 [ 19:20 ]

The real facts are that all the G7 countries are now measuring GDP month to month. Do not use facts that are years old. You are stating facts that are out of date and just plan propoganda.

# Jorge says :
15 May, 2009 [ 19:23 ]

I agree read any reports from g7 countries and they are all mentioning month to month GDP numbers

# Farid Matuk says :
15 May, 2009 [ 19:38 ]

Share a link where G-7 countries report monthly GDP. All but Canada report quarterly GDP. Thanks

# Jim says :
15 May, 2009 [ 20:34 ]

I have never seen a person in an article defend themselves, farid sounds like someone on the defensive....scared of being found out to be making false statements. If you are in the right you do not need to try to defend your position especially here in a forum that has so few readers, sounds like you are scared, maybe you should just shut your mouth. I only know about Canada but yes they do monthly GDP very well when you look back at what was said and what was really done.

# Richard says :
15 May, 2009 [ 20:45 ]

Sounds like Farid has some sour grapes. Why is he no longer the director? Maybe he wants to make waves with the current government, just look at his picture he looks like a whiner.

# Quantum says :
15 May, 2009 [ 22:47 ]

I followed the link to Farid's interview and read what in my opinion can be described as uncivil language coming from this fellow.  I don't know the facts about the algorithms at issue but what's clear is that Farid needs to stop insulting people, there's no place for that in intelligent discourse. 

Calling someone, by name, a liar in response to an interviewer's question is uncalled for period.  Farid's angry response demeans his argument and weakens his response to the point of becoming a rant.  I'd venture to say that's hardly an auspicious way to make a point.

# Farid Matuk says :
15 May, 2009 [ 22:53 ]

Nice.

We move now from the fact of which countries measure monthly GDP, to the personal characteristhics of the messanger.

Great standard

# Jim says :
16 May, 2009 [ 08:41 ]

Farid,
Seem to me you have set the standard, and it is very low. No wonder you are the former director.

# Jose Lopez says :
16 May, 2009 [ 17:11 ]

A  quick googling shows most countries (if not all) produce real GDP figures quarterly (the actual number crunching).

But as the monthly figures are most beneficial for economic agents planning most bureaus release a "forecast" figure of GDP (the monthly GDP figure). The forecast is of course based on actual data (sample) , and mathematical analysis of trends, a bit like measuring the population of a country one year, then producing forecasts yearly after.

So I guess this is a matter of semantics?

I did notice a change on the data supplied by INEI after APRA came to power, I used to read the publications of INEI exports /imports, etc. which not longer are  maintained. 

I suppose the re-census of Peruvian population in 2007 has something to do with the different numbers too?

I suppose statistics figures can be "interpreted" in many ways, as long as the actual figures are real, and correct as per international standards. 

# Carlos Benavides says :
15 July, 2009 [ 01:10 ]

ALBA: A Hope for the Poor, A Challenge to Élites

August 8th 2008, by Jorge Martinez Gonzalez and Lic. Armando Chible Sandoval - Tortilla con Sal

At the end of July, Tortilla con Sal interviewed Lic. Jorge Martinez Gonzalez and Lic. Armando Chible Sandoval, President and Assistant Manager respectively of the savings cooperative Caja Rural Nacional R.L. (Caruna).

Caruna is the body that administers funds made available for development projects in Nicaragua within the framework of the Bolivarian Alternative for the Americas (ALBA). Currently, ALBA's member countries are Cuba, Bolivia, Dominica, Nicaragua and Venezuela. The Honduran government has announced that it too intends to join ALBA shortly. So Nicaragua's experience is important as an example and model of the economic alternative based on solidarity and fair terms of trade that ALBA represents. This interview highlights three fundamental aspects of Nicaragua's experience in that context.

Firstly, it shows clearly that ALBA prioritizes the needs of the sectors most affected and most marginalized by twenty years of policies imposed by the rich countries and the international financial institutions they dominate. Secondly, one notes the threat represented by the success of the ALBA agreements to the system of economic domination established via the ruthless economic policies of the rich countries. Finally, one can see also the key role played by local news media in defence of the imperialist model of economic, financial and cultural domination by denigrating, undervaluing and dismissing the dramatic, encouraging alternative ALBA represents for the region's impoverished majority.

TcS : Perhaps you could give us a general overview of Caruna's work within the ALBA framework?

JM : We have an agreement with PDVSA to hold and administer funds. An agreement that frees up 25% of the oil invoice traded via an oil distribution company in Nicaragua. We use that 25% to channel credit to the farming and production sectors in our country and of that, up until May this year we had placed C$440 million córdobas, a bit more than US$22 million dollars to be more exact. And we had benefited about 50,000 people in 57 cooperatives of producers, cattle farmers and small farmers throughout the country.

Those C$440 million, those US$22 million, have been placed at an interest rate of 8% on the balance, with different payment dates and periods depending on the activity financed. If it is basic grains, rice or beans or vegetables then those have a payment period of one year. if the activity is plantain or similar plants then the payment period is two years. If it is to develop cattle production or small businesses then the credit is given over three to five years.

That has benefited those 57 cooperatives and 10,000 individual small farmers. And Caruna reaches  from Bilwi, or Puerto Cabezas, to Somotillo on the Honduran border with 25 branches throughout the country. As well as that we use the country's network of cooperatives to make loans with Caruna  so that credit reaches small farmers.

We have alliances in Chontales through the Caja Rural de Chontales, in Nueva Guinea with the Banco de San Antonio, a cooperative, and we are working also with the Fundación El Rama. These are the remotest parts of the country. And we are about to open an agency in Bluefields in the Southern Autonomous Region where we used not to have any branches.

That is what the funds are used for, from 25% of the oil receipts. The other 25% freed up goes to the common fund of the ALBA member countries, Bolivia, Cuba, Nicaragua and Venezuela. Those countries decide how those resources are invested  and we have an agreement with them to administer those funds. So it is ALBA-Caruna that manages that ALBA fund.

Both funds originate from the oil receipts but the agreements are with PDVSA, or PDVSA-Caruna to hold and administer those funds correctly. Of those funds that have been used, US$20 million has been assigned to the Streets for the people programme,  that's about C$400 million. And for improvements to public transport initially US$2 million have been assigned but that will reach US$5 million. That is to say a little more than C$100 million to modernize transport. And we are also supporting the construction project Houses for the People, with a first stage of 400 houses for a sum reckoned at US$5 million.

So all that money is going into the country's basic infrastructure, streets, highways, houses so the least well-off people can... for example, the houses are available via a credit programme with a maximum interest rate of 8% with a maximum payment period of 20 years so that producers or in this case the beneficiaries of the Houses for the People programme can acquire these houses and be able to pay for them. The houses have three rooms, with a false ceiling, a porch, a kitchen, a washing area ... they are about 200 square metres. The sites are located in high value areas.

Those are the main programmes. The total number of families benefited....because within the global amounts of credit we have talked about some programmes are quite specific.

We have a programme of artisanal fishing for the Northern and Southern Autonomous Regions that benefits 830 artisanal fishing workers. We have a programme of cattle rearing worth US$6 million scheduled to rear 24,000 calves and benefit 1675 producers. We have a programme of agricultural inputs benefiting 8000 farmers via the distribution of urea at a fair price, Urea for the People. And in coordination with the Agriculture Ministry, MAGFOR, we have a programme to distribute seed and inputs to a total of 87,000 families in that small farmer programme.

And with that 91,720 who are being benefited, we have a total of about 170,000 Nicaraguans benefiting directly from those funds, the ALBA fund and the ALBA-Caruna fund. Between the two we have 170,000 Nicaraguans benefiting. So that is the coverage. While it is true that we are still not in every municipality, with the upcoming result of credit programmes in collaboration with BANDES, we now have US$10 million for the Zero Hunger programme which are going to go into the Food Production Bonus.

And we have US$10 million for a credit programme for women, for women owners of small businesses in the country's urban centres. That should benefit 43,000 individuals. 33,000 women with a loan of up to US$300 per person and 10,000 women via the Food Production Bonus. And the financial mechanism for this is BANDES, the Social Economy and Solidarity Bank of Venezuela. They have an office of representation here in Nicaragua.

TcS : And in Nicaragua BANDES channels its funds through ALBA-Caruna.

JM :  To a value of US36,958,000.

TcS : And that is in addition to the ALBA funds.

JM : Exactly

TcS : Is that a donation?

JM : Part of the funds are non-returnable, the Zero Hunger programme which is US$10 million and the US$2,958,000 which are for artisanal fishing. Those are non-returnable for people in Nicaragua, so as to capitalize impoverished Nicaraguan families. And the rest, some US$24 million, are a credit to strengthen the productive capacity of the agricultural sector, to increase employment opportunities and also opportunities for women in the country's urban centres to have productive employment via Zero Usury.

TcS : It would be interesting to know something about the kinds of agreement Caruna has with PDVSA and BANDES.

JM : Well, with BANDES the relation is one of equitable credit, reasonable payment periods, up to ten years to pay, annual interest rates of one to three per cent. That is in relation to the loans. The credit via Zero Usury does not pass 4%. And in the case of credit to cooperatives for production or cattle rearing, it's the same, interest is never more than 5%. And for individual producers interest rates don't exceed 8%. It is a relation of equitable credit.

On the agreement to hold and manage money from the ALBA fund, basically what we have is an agreement to hold and administer those funds so as to place them correctly with fair, accessible interest rates that differentiate them from the conventional banking system and other financial outfits in the country. And that agreement to hold and manage the ALBA funds, the ALBA signatory countries decide on how to use it for the purposes of social investment.

TcS :  How is the executive that decides on the use of the ALBA fund made up?

JM :  Requests come from society in an organized way via the Citizens' Power Councils for example to the Association of Democratic Mayors  who are responsible for the street improvement programmes. They make the request via 102 municipal authorities throughout the country so as to access the benefits of the ALBA funds. They present the projects to Caruna. We sign an agreement with them and that project is being implemented throughout the country.

TcS : But you cannot take the decision just like that. Don't you have to consult with someone?

JM : The ALBA signatory countries decide. From requests from over a hundred municipal authorities throughout the country both Liberal and Sandinista. 87 of the country's municipal authorities are Sandinista. The rest are Liberal. And 102 of those municipal authorities  benefiting from the Streets for the People programme. So they make a request via their organization which is the Association of Mayors and each one states the number of blocks to pave, how much it will cost. They make the proposal for the bidding and issuing of contracts to the companies who will undertake the work.

It generates employment. It employs local labour for laying the paving blocks and the pavements and doing all the work involved in that. And what we do is pay the contractors on the basis of the contracts for the work they carry out. They have a supervisory system for the work, to follow up the work, because it would be impossible for us to go to each municipality. So the municipal authorities participate in the supervision, follow-up and control.

TcS : Just to be completely clear about this point. You receive the requests from the municipal authorities. You pass those requests to whoever says yes or no. But what is the body that authorizes you to disburse funds for this or that project?

JM : The ALBA Presidents have a meeting. The countries that have signed up to ALBA on terms of extraordinary cooperation decide. There is an executive body that takes decisions on the social projects. It is at the highest level.

TcS : So these decisions get taken at Presidential level?

JM : Yes. For example, the public transport subsidy is via the ALBA fund. The famous US$1.30 . And we are also talking about 17,000 pairs of tyres of the 25,000 that were agreed. The automatic barriers for control of bus passengers too. They are being processed normally. And likewise the batteries, the lubricants and other inputs. That is a support fund for the transport sector with credit at rate completely unknown in the country. Because those tyres are being financed over two years at 4% interest. That's less than the international rate, less than the London Inter-Bank Offered Rate, Libor.

TcS : One of the doubts the news media raise, without answering it, is on the agreement ALBA-Caruna has with PDVSA to pay those loans.

JM : What we are going to pay is 25% of the oil invoice. We're going to pay over 25 years. We have two years' grace and 23 years to pay with an annual interest rate of 2% on the balance which depends on the invoicing procedure. That is what we are going to pay. Because for the other fund the payment plan is agreed.  It is a debt of ALBA-Caruna in accordance with an agreement signed by Asdrubal Chávez, Vice-President International of PDVSA and by Jorge Martinez Gonzalez, that's me, President of Caruna.

That is the agreement for the fund relating to the first 25% and this is the other one on the other 25% also signed by Asdrubal Chávez and Jorge Martinez. So in this case this 25% we are placing with a rate of 8%. With 2% we manage to cover our operating costs and get credit to people out in the countryside and also cover other contingencies that can occur in managing these finances. We have provision for bad debt that we add on, apart from the 8%. In the end, in the period available to pay the credit since the funds are freed in cash by agreement with the oil distributor to Caruna's account as stipulated by PDVSA, we are the ones who are going to pay PDVSA. It is not a debt of the Nicaraguan State, nor of any institution of the Nicaraguan State.

TcS : That is a point on which some Nicaraguan economists have remarked. For example, Nestor Avendaño has suggested that when money is loaned to IRTRAMMA or ENATREL or GECSA, then that money could turn into a public debt.

JM : Not at all. I want to say the following on that. In Nicaragua, during the previous government energy distribution was privatized and now a multinational company has it, Union Fenosa, a Spanish company. And what was beforehand a single company was broken up into generators, transmission operators and distributors. The generators are GECSA, some private companies, like Corinto, Tipitapa Power, AMSFEL and others. Those are the generators. The transmission operator is ENATREL which is a State company. And the distributor is Union Fenosa which charges for consumption.

We could say that people are trying in bad faith to sell the idea that the resources freed up from the oil invoice and that we have made available to the generating and transmission system is a public debt. But really it is not a public debt because in parallel we have a contract with Union Fenosa where they recognize that all the resources handed over to the petrol companies or to the generators is on behalf of Union Fenosa.

Union Fenosa receives a subsidy from the Nicaraguan State derived from the fact that all Nicaraguans consuming less than 150 kilowatt hours a month get a subsidy. That subsidy is paid out by the Treasury Ministry to Union Fenosa. So then Union Fenosa has an agreement signed with Caruna saying that they pass that to Caruna so as to pay what was spent on generating and transmitting by Caruna. The debt relationship is that Union Fenosa owes Caruna. because Union Fenosa receives the benefit of services from ENATREL and ENEL and from its system of generation and transmission because they distribute that energy and charge for it.

So then, the one responding for that debt is Union Fenosa and those critics know it and have kept quiet about it. Even the private generators like Empresa Generadora Energética de Corinto of Cesar Zamora, AMSFEL,Tipitapa Power, Puerto Cabezas Power too, they are all private generators. There is no public debt.

TcS : So Caruna has no loan agreement with public bodies in the energy sector or in any other sector?

JM :  No. The Nicaraguan State via a law passed in the National Assembly has an agreement to subsidize all Nicaraguans consuming 150 kilowatt-hours or a month. Since that money is budgeted in the  Republic's General Budget, it has to be released via the Treasury Ministry. But because that is sometimes somewhat slow and sometimes Unión Fenosa urgently needs resources, then they signed an agreement with us. For example, if we give money to pay ESSO  and confirm to the Treasury Ministry that Union Fenosa has signed an agreement with us then the money we pay to Esso for fuel needed for electricity generation and subsequent transmission of that power Union Fenosa states that it releases and endorses that payment from the government to them in favour of Caruna.

TcS : No one has explained that in the news media. It is a constant strategy of the right wing media to raise doubts they then leave hanging without an answer. They don't follow up their own questions. Have you had other experiences of that kind of media manipulation?

JM : Almost all our experience of the media, whether it be with regard to credit or with regard to the ALBA country funds, the media have tried to misinform or undermine and cast doubt on the transparency of their implementation. For example they said the street improvement programme only benefited Sandinista municipalities.

But as I explained to you earlier, there are 87 Sandinista municipalities in the country and the street improvement programme is being carried out in 102 municipalities. A good number of the municipalities benefiting are not necessarily Sandinista. And they say the ALBA projects only benefit Sandinistas. But where they are doing those thousand or so streets across the country it's not just Sandinistas that live there. Liberals and Conservatives do as well, the whole people live there. Whether they vote for or support the Revolution is another matter. But no one asks who lives there. The only thing we know is that on those streets live low-income people, hard working people, people who spend the summers in clouds of dust and the winter with great puddles of water and now things are different for them.

There they try and say they don't understand the contract procedure, but basically all the country's construction companies are working on that program even the biggest ones. Private companies like Llansa, de Guerrero, Oirsa, small ones, medium sized ones, as well as the biggest ones, are all working. And they all say the mechanisms are transparent, that they have applied for contracts, offered their services and been been awarded contracts  to pave the streets. That is one example of the disinformation those news stories wanted to give.

They have tried to demonize the relation Caruna has as ALBA-Caruna with the Venezuelan cooperation programme. But we have agreements of collaboration and administration contracts with another 23 organizations, private ones, national ones and international ones. For example we have agreements with Holland's Rabobank Foundation, with foundations in Italy and in Wisconsin in the United States, with Swiss Workers Aid, with BECU, with OXFAM-UK, OXFAM-Belgium, OXFAM-Canada, with the European Union in COSUR in Rivas. So we can say we have a broad range of agreements, contracts and lines of credit with other organizations.

But that is never mentioned. All that gets mentioned and demonized is the relation and cooperation with Venezuela because they want to say the funds are badly used, that there's no transparency and that they accumulate debt. Even the figures that they give, in the alleged figures they give, they always give inaccurate information which is the information they themselves suppose.

TcS : Have you had requests for interviews from local journalists?

JM : Within the framework of our public relations and media relations we have developed information for national media on what we do, for example, when we open a new branch or when we hand over a new loan. The information is public.

But some media, like El Nuevo Diario or La Prensa, have come asking for information and ask questions in bad faith. We had an event in the PAEBANIC centre to talk about the agricultural cycle with 63 cooperatives and 100 leaders. We were talking about interest rates, loans, the sectors we support. And one of those journalists came up to me and said "Caruna manages the ALBA money......don't you think that money comes from shady sources?" So when someone starts to talk like that, I have to say, "Look, excuse me I cannot discuss the matter with you because you are presupposing things that don't exist or exist only in your imagination...."

AC : In that event we were explaining the different programmes we had with Wisconsin, Alba Caruna and so on.

JM : We were presenting via Datashow.

AC : So they are watching, all those news media but... they are not seeing. We put everything on the screen. But the journalists don't see, What they see is the dark side. They see the words ALBA-Caruna and are prejudiced. So there's good reason not to help that along when the journalist concerned is in bad faith and only wants to find something bad. They just have to see that it's Chavez, that it's ALBA, that it's ALBA-Caruna and there, it's bad.

JM : What's happened is that our experience with these news media has been that they misreport the information. If one sets out in good faith to talk about our programmes about amounts of money or the number of people benefiting, the headlines they put are "Caruna moves from being modest cooperative to being a nice little earner" or "Caruna's nice little earner" and in Nicaragua that means something that smacks of fraud.

TcS : But Caruna has been around for twenty years.

JM :  Fifteen years, and in those fifteen years we have now got 15,500 individual members and 25,000 members in the cooperative network with 40,000 affiliates. We are holding C$80 million in our members savings.

TcS : Your experience is mainly in agriculture.

JM : Yes. Our members have those C$80 million. We have C$40 million plus in capital. We have C$20 million in subscriptions. So we are talking about more than C$140 million belonging to the cooperative's members. We process more than C$2 billion a year. In transfers, we transfer funds both nationally and internationally. We change bankers cheques. We buy and sell foreign exchange. We carry out all those financial operations as a cooperative legally authorized to do so and it's worth noting that we carry them out with operating costs only 30% of which are generated by interest charges. 70% are generated by the other financial services that Caruna offers throughout the country.

TcS : So the legal framework for you is the Law of Cooperatives.

JM : Yes. Law 499, the General Law of Cooperatives that makes us a cooperative body working throughout the country to which we can affiliate any man or woman prepared to accept Caruna's statutes and by-laws and also in the case of different bodies, we administer funds on their behalf in accordance with their interests.

For example we have an agreement with Los Pipitos. Los Pipitos gives credit to parents of children with disability. So we signed an agreement and we release to Los Pipitos or to the  parents they instruct us to. They don't have to be members of the cooperative. We have an administrative agreement with Los Pipitos so Los Pipitos tells us to give so much to such and such a family who have children with disability.

Or for example, a support program for war victims called Provictima. So Provictima tells us to give such and such a citizen who was wounded in the war, either of the army or of the Contra, whatever may be their background, and we pay out against their identity card. That support carries zero interest. They give us separately two per cent to cover Caruna's operating costs in making those loans.

These administered funds assist different sectors in the nation's life and the funds' owners tell us they are interested in offering loans to this or that group or sector and that's how we work. It is not from one day to the next that Caruna that has sprung into life. Of course, the support the Unity and Reconciliation Government has given the cooperative sector and the productive sector in general is an extraordinary effort. We judge it in that way.

It is an extraordinary effort via the rural credit fund, via the Agriculture Ministry MAGFOR, via the Institute for Rural Development, via the National Investment Fund, via the agreement BANDES has with Caruna. If it were not for the relationship President Ortega has with Venezuela, probably we would not have that credit relationship with BANDES and that has helped us a lot in reaching the small farmer. And very probably if another government had been in power we would not have had access to those funds nor to the funds freed up from the oil invoice.

Naturally, the relationship existing as regards coverage, both in terms of Caruna's seriousness and the transparency of its controls mean the government can permit us to have a direct relationship with PDVSA with regard to the funds they have made available. And naturally it is also important that we enjoy a relationship of cooperation and alliance with the government that is using its power in favour of impoverished people.

TcS :  One can suppose that increasing production in the country by means of a broad supply of credit to sectors previously excluded is one of the aims of this big effort on behalf of people on very low incomes. And perhaps another objective is to create conditions that oblige other entities offering credit in the country to adjust their lending practice to the new reality brought about by government policies in favour of low income people. How do you see that process and what changes do you hope to see in the future?

JM : We hope Caruna's impact in the agricultural sector and in the small business sector will contribute to helping the banks and financial outfits not regulated by the banking sector make a serious analysis leading to decisions that improve financial services. And above all to reduce the cost of accessing credit, because many costs are added on to the interest that have to do with the way they calculate their operating costs, their running costs and their collateral costs. And what we seek is to be an alternative for the sectors that have traditionally not had access to credit because that was the idea we started out with in 1994.

Prior to the closure of the National Development Bank, agricultural credit was available throughout the country and that was when we founded Caruna, precisely to create other alternatives for farmers. Now we aim to deepen and consolidate Caruna's leadership as a cooperative, improve our services, keep our whole system up to date, train people well, hand back surpluses to the cooperative members, make sure they are using their membership cards and encourage them to grow as members of the cooperative.

And more than anything we hope the big business people who are bank shareholders might be able to, although this is something that one way or another has been happening, since interest rates have dropped from an average of more than 20% to 16% or 18%. Credit costs have fallen. But that we are expecting the finance sources to drop interest rates without proposing it openly? No. We are going ahead, like the poet said, we are making our way by walking it.

AC : This is very important. Because if we are talking about the play of the free market then there are a couple of important things. First that these 130,000 people once they have an alternative, some economic sectors, where they were paying and paying without any possibility of playing a real role in the economy. They are receiving help. A big percentage did not get any help before. In other words we are moving from quasi-employment to a real employment for a small business person. So that makes it more possible for Nicaragua to close the gap a little, not much but to start closing the gap caused by emigration to other countries.

Now. That family remittances are a great boon? No. Family remittances are not a blessing at all . For me quite the opposite. They are dreadful because they leave our gross domestic product in other countries. There they leave US$5000. Here they place barely US$300. And these are Nicaraguans who could be producing US$800 or US$1000 for Nicaragua. Our gross domestic product would be increasing and our per capita income too. It is something important that hardly anyone sees. Or at least , those who don't want to see.

On the other hand if we are talking about free markets, as Jorge said, it is not that we are pressing for interest rates to drop. How is there any pressure for interest rates to drop? There lies the big concern of  the other micro-credit outfits. If our interest rate was already averaging 16% or 12 % that has been substantially what we have been working with, then people realize that there is strong exploitation from the other financial entities. that is going to make the producer, the small business person stop and choose. "Pay me 20, 30, 40 per cent"......."No, why should I if there they are offering at 10%." So one way or another those lenders have to readjust too and lower the interest rate.

TcS : In other words people are empowered....

AC :  They're empowered. Now they have a chance. Now they have an opportunity. And that of course helps a lot. And what does that mean here? For example those 130,000 people benefiting now what is happening is that things are freeing up resources for them so they have more income, because if I sow an acre of beans and before I was paying C$200 in interest from that acre, now today I am only paying C$40 or C$50 and I keep C$150 extra to improve other things. It's true that's not much in the national economy but we are going to see that what benefits the members of the cooperatives benefits the national economy too.

http://www.venezuelanalysis.com/analysis/3704

# Carlos Benavides says :
15 July, 2009 [ 01:51 ]

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# Carlos Benavides says :
15 July, 2009 [ 01:58 ]

Despite Peru’s economic performance being among the best in Latin America poverty remains high and widespread. Peru had the fastest growing economy in the region in 2002 but unemployment was still very high and poverty reduction strategies have not had sustainable results. Peru’s poverty levels are above those of Argentina and Brazil based on US$2/day poverty line.

Crecer (Grow) is the latest government initiative which focuses on child malnutrition.

25 percent of children under five years have stunted growth in relation to their age and this rises to 66 percent in the seven poorest regions. The aim is to reduce the average to 20 percent by 2011.

Almost half the population is poor, significantly higher in the rural areas, and 20 percent are classed as extremely poor. In the urban areas poverty is the most unequal.

More than 39 percent of the total population and two thirds of the rural population in Peru live below the poverty line.

Inequalities in human development can be seen between urban and rural areas, Spanish and non-Spanish speakers and across the climate zones. Most of the extreme poor live in rural areas in the highlands and the rural jungles and have Quechua, Aymara and other languages as their native tongue rather than Spanish. They have fewer opportunities to progress through life due to the obvious discrimination caused by language barriers.

Despite National trends showing a reduction in child mortality and an increase in school enrolment since the mid 1990s chronic rates of under – nutrition prevail in rural areas. Children’s growth and development are affected by poor nutrition. Despite progress in access to services for the poor, disparities between urban and rural areas and across different regions mortality remains high. A quarter of the population has no access to health services despite free health care since 2002.

Children are the most vulnerable and unprotected. Of the 3.8 million people living in extreme poverty 2.1 million are children. Of the 10.2 million under 18 population 6.5 million live below the poverty line. Poverty remains high and the proportion of children who live in poverty is much higher than figures for the population as a whole often indicates.

Socio – economic disparities and exclusion continue to affect children and adolescents who are not benefitting from the economic growth. Enrolment for school declines with age due to the expense of keeping a child in school. Child labor is a factor here as nearly 90 percent of children help out at home or work on the family farm.

Levels of poverty, mortality rates and malnourishment among indigenous groups are twice as high as national averages. Peru has one of the highest levels of income inequality and the gap between the rich and poor is widening.
http://www.articlesbase.com/economics-articles/poverty-in-peru-1018333.html

# Chris says :
2 September, 2009 [ 16:41 ]

i think that this guy is stupid and that perus poverty has dropped alot since 2004 

# Carlos Benavides says :
2 September, 2009 [ 16:48 ]

I totally agree with Federik Matuk.
Peru needs a Leftist Goverment & President  to address the Poverty situation.

# Carlos Benavides says :
4 September, 2009 [ 11:12 ]

On April 30 in Lima, Peru, over 2,000 women protested against rising food prices. This recent outburst is part of a food crisis that is sweeping the globe, from Kazakhstan to Haiti. In Lima, women from poor communities and soup kitchens beat on empty pots and carried signs in front of the congress, chanting to President Alan Garcia: "The pot is empty, Garcia!"

The recent price hike for food has led to an approval rating for Peruvian President Alan Garcia of 26%, the lowest since he was elected in 2006. "Food prices keep on rising and the government doesn't pay attention to the eating halls," Maria Bozeta, a director of one of three associations that represent eating halls in Lima, told Reuters. Protester Soledad Requena asked, "Where will we go to eat?"

The extensive wheat shortage in Peru has even forced the military to bake bread with potato flour. Potato is a native crop of Peru.

After slashing taxes on imported food, Garcia sent the military to poor neighborhoods in Lima to hand out food. Yet instability continues to spread throughout the nation as citizens demand increased assistance from the government in order to cover the rising food costs.

Government subsidized eating halls in Peru are being flooded with hundreds of thousands of people per day. According to Reuters, 42% of the Peruvian population, or 12 million people, live in poverty. The women protesting in the capital demand that the government increase its subsidies to the eating halls by 30%.

The Real News reported that just a few days before the Lima protests, Brazil announced it would ban the exportation of rice due to concerns that rising prices and dwindling supplies could further deplete food for national consumption. Other countries, primarily in Asia, have also banned rice exports, worsening the global food shortage.

Video Report: Brazil Bans Rice Exports, Protests in Peru


http://upsidedownworld.org/main/content/view/1269/76/



Poverty Amid Progress in Peru
http://www.globalenvision.org/2008/05/09/poverty-amid-progress-peru

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