Poverty in developing countries

Peru: Current Development Status by POVCAL and Capabilities Analysis and Future Recommendations

Though far from the most poverty-stricken and underdeveloped country in South America, Peru is certainly a country in need of further economic growth and development and has long had a sizeable portion of its population living at or beneath the country's poverty line. As of 2006, the last year for which complete and comprehensive data is available, nearly half -- forty-four percent -- of the nation's population was surviving on less than $1.25 in 2005 purchasing power parity dollars, the measure currently used by the World Bank as a global estimate of the poverty line (CIA World Factbook 2010; POVCAL.net 2010). Though the unemployment rate that the country is experiencing during the global recession is not excessively high in comparison with many other nations, especially in the developing world, Peru has a long and consistent record of extreme underemployment, which is a contributing factor in the country's developmental situation (CIA World Factbook 2010). Other measures, however, show an increased development.

The POVCAL estimate of poverty in the country shows the mean income of fifty percent of the population as twice that of the poverty line, at approximately seventy-six dollars a month as of 2006 (POVCAL.net 2010). It can be assumed that this number has decreased during the recession, data for which is unavailable on the World Bank's POVCAL website. Still, this and other information (especially the decile breakdown) provided by the POVCAL analysis suggests that there is a great disparity between the nation's poor and its middle- and upper-classes, with sizable minorities living well above the poverty line (POVCAL.net 2010).

Utilizing Amartya Sen's capabilities approach to poverty assessment rather than the purely statistical and financial approach of a traditional poverty analysis shows Peru to be somewhat more developed and progressive than the POVCAL results. The disparity of wealth distribution is still a major source of poverty according to the capabilities assessment, but the unemployment and underemployment rates as well as the economic poverty threshold are all improved by the understanding that many rural Peruvians, which still make up a sizeable portion of the nation's overall population, practice subsistence farming and have traditional economies in place that allow for a greater access to basic needs than economic and currency indicators suggest (CIA World Factbook 2010). At the same time, the main exports of the country include natural gas, oil, and the products of mining operations that are primarily profitable only for the owners and direct shareholders of these endeavors, leaving lessened opportunities for other Peruvians and generally increasing the disparity of wealth in the country -- and thus the lack of capability for many of the impoverished citizens of Peru to alter their situation.

Again, Peru is far from being the most impoverished country in South America, and its export capabilities as well as the rural practices of many of the country's citizens suggest higher levels of development than might be accurately measured through statistical means alone. There is still definitely a poverty situation in the country that needs to be addressed, however. The disparity of wealth distribution amongst the country's population and the consistent underemployment faced by many are situations that require attention.