The controversy over the new Colombian methodology to calculate the number of poor is far from settled. The newly adopted Multidimensional Poverty Index (MPI) factors in health, housing, living standards, and government subsidies, alongside income. The problem is, regardless of the “methodological rigor,” there are many doubts over whether the new methodology actually captures the magnitude and scope of the problem.
According to the new MPI, the number of families living between extreme poverty and poverty, with incomes ranging from 330,000 to 750,000 Colombian Pesos a month (about $183 to $416), amounts to 37% of the population. That means we have about 37% of the population living on close to $3.50 a day per person.
Two important issues must be considered by any serious measurement that is designed to direct public spending and policy:
1. In a country where three to four million were displaced, how is the MPI capturing this variable? This is critical because most of these people lost their lands and very little is known about how are they surviving.
2. How does the MPI reflect Colombia's core problems of land concentration? With a land Gini coefficient of 0.87, Colombia has one of the highest land consolidation rates in the world.