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DE RUEHME #0046/01 0082226
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O R 082224Z JAN 10
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0015
INFO ALL US CONSULATES IN MEXICO COLLECTIVE

UNCLAS SECTION 01 OF 03 MEXICO 000046 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON PGOV SOCI UNDP AID MX
SUBJECT: MEXICO BROADENS AND MODERNIZES POVERTY INDICATORS 
 
¶1.      (U) Summary. Mexico has revised how it officially measures 
poverty, in collaboration with the UN Development Program (UNDP). 
The new set of indicators reduces Mexico's overall poverty rate 
from 47.4% to 44.2%, a change explained by the new measurements' 
focus on factors other than income. The indicators, prepared by 
Mexico's public but independent National Council for the Evaluation 
of Social Development Policy (CONEVAL), will permit a broader, 
multidimensional understanding of Mexican poverty. This improved 
understanding should help the government better target conditional 
cash transfer programs to the neediest recipients. Furthermore, the 
new indicators will help Mexico and the UNDP track Mexico's 
progress on Millennium Development Goal #1, the eradication of 
extreme poverty and hunger. Mexico is among the first countries to 
implement a multidimensional poverty measurement based on eight 
indicators. The change in indicators and results has sparked some 
vocal objections from scholars, but the GOM and international 
bodies are optimistic. End summary. 
 
 
 
CONEVAL AND INEGI 
 
----------------- 
 
¶2.      (U) CONEVAL was founded in May 2006 under the Fox 
Administration, as provided for in the Social Development Law 
enacted on January 20, 2004. CONEVAL is an independent public 
organization under the coordination of the Secretariat of Social 
Development, and its role is to study and measure the impact of 
Mexico's social development programs. Laboff contact at CONEVAL 
stressed the importance of directing scarce resources towards 
progressive rather than regressive programs and suggested that 
CONEVAL's research and reports have begun to inform policymakers' 
decisions. Thanks to the participation of six independent 
researchers on its board, who join through a transparent public 
invitation, CONEVAL has managed to stay independent in spite of 
depending on an executive secretariat for its budget. CONEVAL gets 
its data from the Households Income and Expenditures Survey 
(ENIGH), conducted every two years and every five years for 
municipalities, by the National Institute on Statistics and 
Geography Information (INEGI). For the new poverty measurements, 
CONEVAL, in coordination with INEGI, conducted a new survey on 
socio-economic conditions within the ENIGH. The UNDP performed the 
same tests on the data presented and achieved the same results as 
CONEVAL, lending credibility to the process. 
 
 
 
NEW DATA AND RESULTS 
 
-------------------- 
 
¶3.      (U) Mexico's Social Development Law requires the 
Secretariat of Social Development to implement a multidimensional 
system to measure poverty, and this new framework responds to that 
requirement. Previously Mexico measured poverty at three levels, 
all related to income: 1) food-based poverty, 2) capabilities-based 
poverty, and 3) asset-based poverty. Those poverty measurements 
were based purely on income: a person needed to earn 64 (urban) or 
40.10 (rural) pesos per day to live above the poverty line. The new 
poverty measurements are based on eight indicators, which allows 
analysts to see not only numbers and percentages reflecting 
Mexicans' living standards, but also the number and the nature of 
the shortages they face. CONEVAL determined that lacking three of 
the eight basic needs puts a person in extreme poverty. The eight 
indicators include seven income-related and one social cohesion 
related factors. They are: 
 
 
 
-   Income 
 
-   Access to health care 
 
-   Access to social security programs 
 
-   Quality and space in housing 
 
-   Basic services in the home 
 
-   Access to sufficient food 
 
-   School drop-out rates 
 
-   Degree of social cohesion 
 
 
 
¶4.      Some scholars and civil society leaders criticize Mexico's 
 
MEXICO 00000046  002 OF 003 
 
 
new measurements for "erasing" 3.6 million poor people by changing 
definitions of what Mexicans need in order to survive. While an 
expanded list of indicators would normally suggest a larger 
population, Mexico's numbers have actually gone down from 47.4% to 
44.2%, making several leaders nervous about the statistics, the 
real situation of Mexican poverty, and the social policy 
ramifications of the news. Others, however, applaud Mexico for 
implementing a very advanced poverty measurement system: Mexico is 
among the first countries in the world to adopt a multidimensional 
poverty measurement framework. The UNDP will help measure Mexico's 
progress on the Millennium Development Goals, and eradication of 
extreme poverty is the first goal. 
 
 
 
DATA 
 
---- 
 
¶5.      (U) Under the new measurements, on average, Mexico's poor 
lack 2.7 of the eight basic needs described by the indicators 
listed above. CONEVAL considers extreme poverty the lack of three 
or more basic needs. Over 82 million Mexicans (77.2%) experience at 
least one form poverty, and 47 million Mexicans (44.2%) experience 
some form of multidimensional poverty (lacking two or more of the 
eight basic needs). Of the 47 million Mexicans who lack two or more 
basic needs, 36 million people (33.7% of the entire population) 
experience moderate poverty, lacking on average 2.3 of the eight 
basic needs identified by the new indicators. The other 11.2 
million people (10.5% of the entire population) live in extreme 
poverty, lacking an average of 3.9 basic needs. 
 
 
 
The following are 2008's lack of basic needs broken down by the 
first six indicators: 
 
-   Lack access to basic health services: 40.7% (43.9 million 
people) 
 
-   Lack access to social security programs: 64.7% (68.9 million 
people) 
 
-   Have insufficient quality of and space in home: 17.5% (18.62 
million 
 
-   Lack basic services in the home: 18.9% (18.9 million people) 
 
-   Lack sufficient access to food: 21.6% (23.06 million people) 
 
-   School drop-out rates: 21.7% (23.2 million people) 
 
 
 
¶6. Degree of social cohesion is measured by four factors: 1) 
economic inequality, 2) social polarization, 3) social networks, 
and 4) income equality. Mexico's Gini coefficient (World Bank 
data), currently 48.1, has floated between 46 and 53 since the 
early 1990s and shows a "high concentration" of wealth. 
 
 
 
¶7.      (U) CONEVAL has also ranked Mexican states based on their 
percentage of poverty and the average number of basic needs that 
are not met. 
 
 
 
Poorest states: 
 
-   Chiapas, 76.7% in poverty, average lack of basic needs is 3.1 
 
-   Guerrero, 68.1%, average lack is 3.4 
 
-   Puebla, 64%, average lack is 3.0 
 
-   Oaxaca, 62%, average lack is 3.5 
 
 
 
Richest states: 
 
-   Baja California Sur, 21.1%, average lack is 2.3 
 
-   Nuevo Leon, 21.5%, average lack is 2.3 
 
-   Baja California Norte, 26.3%, average lack is 2.2 
 
-   Sonora, 26.7%, average lack is 2.4 
 
MEXICO 00000046  003 OF 003 
 
 
SHINING THE LIGHT, BUT ON WHAT? 
 
------------------------------- 
 
¶8.      (U) Comment. The newly released indicators signal the 
urgency of poverty alleviation and redistributive policies. They 
also suggest that many moderately poor Mexicans are closer to 
extreme poverty (lacking three of the eight basic needs) than they 
are to economic security. CONEVAL's mandate is to show the GOM how 
successful its social development programs are in meeting its 
stated goals. This year, the GOM acknowledged that some of its 
programs were not achieving the expected results, and those 
programs are expected to be eliminated or redesigned. The GOM's 
star program, Oportunidades, appears to accomplish its mission to 
help the rural poor, and may be expanded to urban areas, probably 
with significant changes. If the new measurements prove robust and 
more clearly define the situation, the GOM may choose to rethink 
its existing cash transfer programs, including Oportunidades, and 
incorporate them more effectively into a holistic social, economic, 
and political framework. The GOM has thus far not found the formula 
for job creation and greater economic growth, elements that are 
vital to alleviating poverty in a more sustainable way. End 
comment. 
PASCUAL