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URUGUAY: A Chance to Leave Poverty Behind

Pablo Alfano

MONTEVIDEO, Sep 3 2009 (IPS) - Nilda Barboza gets up at 3:00 AM every day to make it on time to her new job in an upscale neighbourhood in the Uruguayan capital from her home in an outlying area. But she does so with a sense of pride, for being one of tens of thousands of people who is no longer among the ranks of the poor, thanks to a government anti-poverty programme.

 Credit: Alejandro Arigón/IPS

Credit: Alejandro Arigón/IPS

Her daily commute from a low-income neighbourhood in the satellite city of Las Piedras, 22 km north of Montevideo, to Carrasco, the wealthiest district in the capital, involves a ride on two different buses and a nearly one-kilometre walk.

Despite the long commute, the 46-year-old mother of four is upbeat about the direction her life has taken, after almost a year working at a nursing home for the elderly in Carrasco.

"I'm working, I earn a decent wage, I have no complaints. I can pay my bills and I even have cable TV," Barboza told IPS, clearly pleased about having had the chance to "start over again."

Before she got this job, she spent three years barely scraping by with odd jobs, altering or fixing the clothes of people in her neighbourhood, cleaning houses, or cutting grass in people's yards.

She had signed up for the government's National Plan to Address the Social Emergency (PANES), which included an income transfer programme for extremely poor households, a temporary workfare scheme with a training component, a food purchase card and other benefits.

But she said the monthly cash transfer of around 75 dollars and the food purchase card were not enough for her family to survive on.

After participating in community work like cleaning sidewalks and plazas in exchange for modest wages (on top of the basic cash transfer), as part of the workfare scheme, Barboza registered with the new anti-poverty programme that built on and replaced PANES in late 2007 – the "Plan de Equidad" (Plan for Social Equity), also designed by the Ministry of Social Development.

Under the new programme, Barboza took a six-month skills training course last year to become a kitchen assistant, along with 29 other female heads of households with small children.

After earning the highest possible marks on her exams, Barboza said to herself "If at the age of 45 I could go back to studying and for the first in my life I have a certificate in some area, I can probably land a stable job." And she did.

After so many years of occasional work and barely getting by, she was hired at the nursing home in Carrasco.

Steady decline in poverty

Barboza is one of 181,000 people in this South American country of 3.2 million who pulled out of poverty in 2008, according to the latest statistics, released in July by the National Statistics Institute (INE).

The INE study shows that one out of five Uruguayans who were living below the poverty line in 2007 are no longer poor. At the same time, one out of four people in extreme poverty are no longer in that category. In the last four years, 383,000 people – nearly 12 percent of the population – left poverty behind.

The poverty rate thus shrank from a record high of 32 percent in 2004 – after the 2002 financial collapse and the 2002-2003 economic crisis – to under 21 percent today.

The extreme poverty rate was also reduced sharply, from nearly four percent in 2004 to 1.5 percent in 2008, and it is still falling.

The statistics show that since March 2005, when the left-wing Broad Front government of President Tabaré Vázquez took office, "one-third of Uruguayans who were poor, in terms of income, are no longer poor today," Christian Mirza, the Ministry of Social Development's national director of social policies, told IPS.

Mirza, a social worker, said the downward trend has been steady and continuous since early 2005.

The recession that began in 1999 in this small South American country sandwiched between Argentina and Brazil culminated in the 2002 financial debacle – triggered by the crisis in Argentina – when foreign reserves were virtually exhausted, exports and wages plunged, and unemployment climbed to 21 percent, the highest rate since 1985.

Today, unemployment stands at around eight percent.

Although there is still a long way to go to meet some of the Millennium Development Goals (MDGS) – specific targets adopted by the United Nations member countries in 2000 – by the 2015 deadline, Uruguay has already more than halved the proportion of people living in extreme poverty in 1990 (3.4 percent).

Only 20 days after socialist President Vázquez's term began in March 2005, the law creating the Ministry of Social Development was passed – with the support of the main opposition force, the National Party – with the aim of coordinating the government's social policies.

Shortly afterwards, the government created the so-called "social cabinet" to create greater links between the health, education and social development ministries, as well as the National Council on Social Policies (CNPS), which was put in charge of coordinating all social policies along with other ministries, state institutions and provincial and municipal authorities.

Mirza, who presides over the CNPS, said it was unfortunate that the public believes PANES and its successor, the "Plan de Equidad", have been limited to "mere cash transfers to the poor.

"Many people would appear to have forgotten initiatives like the food purchase card, new homeless shelters, the expansion of free health coverage, literacy and social inclusion programmes, and programmes for generating decent, stable employment, improving housing, providing free dental care, and offering free eye operations through the creation of the Eye Hospital" with the collaboration of Cuban doctors, he said.

"These are all strategies to overcome poverty and social inequality, improving the distribution of wealth, which go beyond a mere cash transfer," said Mirza.

The government's aim is "to put social services and assets at the service of the citizens," he said, while stressing – in response to criticism from the opposition – that the strategy is not "welfare-oriented."

Not just specific anti-poverty policies

But the indicators showing that poverty has been sharply reduced are not only the result of the success of the Ministry of Social Development's programmes and other social policies.

Mirza said the economic policies followed by the Vásquez administration have played a decisive role in the reduction of poverty. GDP grew 10.5 percent in 2005 and expanded by an average of seven percent a year from 2006 to 2008.

"Social policies by themselves do not eliminate poverty; they were accompanied by economic policies geared towards solving the problem," he said.

In his view, the revival of the tripartite wage boards – made up of representatives of government, employers and trade unions – to negotiate wages contributed decisively to the overall 18 percent rise in real wages and 30 percent increase in household income in the past four years.

Another factor, he said, was the overhaul of the tax system since July 2007 which, among other things, reduced the Value Added Tax, especially on basic food items. It also created a new tax on the incomes of the wealthiest households, which replaced the tax on wages, thus benefiting 77 percent of formal sector workers, who pay no income tax at all because of their low incomes.

An additional element that played a role in the reduction of poverty was the expansion of the family allowance system, which provides a stipend to low-income families with children. Under the new system, families receive the payments monthly, rather than every two months, and the allowance is paid per child up to the age of 18, rather than only until they complete primary school.

In addition, all children up to 18 now have free coverage in either the public or private health systems.

Perhaps she is not familiar with all of these statistics and their impact on the daily lives of many Uruguayans, but Barboza does know that she now has a steady, decent-paying job.

Unfortunately, not all of the women in the kitchen assistant course with her were so lucky, as IPS found out by contacting others who took the course.

Barboza also receives monthly family allowance payments for her children, is paying into her retirement pension fund, and has complete health coverage for herself and her children.

The oldest, who is 19, is completing the sixth year of secondary school and is thinking about going on to the public university, which is tuition-free in Uruguay. "I'll see what happens," he said.

One of her daughters is studying business administration, and the other is studying gastronomy at the main vocational institute, formerly known as UTU and now named the Consejo de Educación Técnico Profesional.

"Today I work in a pleasant setting with the elderly. One of the old men is 100 years old and one of the old women I take care of is 103. I like what I do and I'm thinking of taking a cooking course. Who knows, maybe I'll end up working one day with my daughter in what we like to do," she said.

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