Understanding the BOP From Opportunities

8/22/2019 Understanding the BOP From Opportunities

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A Publication by:


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A Publication by

CINI

Authors:Dr. Fernando Casado CaequeDr. Pablo SnchezMr. Jordi Vives

Graphic Design: Marta Gualtero SorianoEdition: Michael StrelowPublished in Barcelona, January 2013

Copyright 2013 by GlobalCAD and CINI. All rights reserved.


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1. PROLOGUE 8

2. EXTENDING THE CONCEPT OF POVERTYFOR THE BOP DOMAIN 14

2.1. From ulflling needs to enabling capabilities 17

2.2. Towards a ramework o access to humanbasic needs or the BoP domain 18

3. STATE OF THE ACCESSTO BASIC NEEDS IN LATIN AMERICA 20

3.1. BoP access to needs in Latin America:a benchmark analysis beyond income 223.2. Growth and economic developmentin need to address basic needs 233.3. Challenges addressing the needor qualitative and comparative inormation 27

4. COUNTRY PROFILES 34

4.1. ARGENTINA 364.1.1. Water 384.1.2. Energy 40

4.1.3. Housing 404.1.4. Education 424.1.5. ICT 434.1.6. Summary 44

4.2. BRAzIL 464.2.1. Water and Sanitation 484.2.2. Energy 494.2.3. Housing 504.2.4. Education 514.2.5. ICT 52

4.2.6. Summary 53

4.3. COLOMBIA 564.3.1. Water and Sanitation 584.3.2. Energy 604.3.3. Housing 61

4.3.4. Education 624.3.5. ICT 634.3.6. Summary 64

4.4. MEXICO 664.4.1. Water and Sanitation 684.4.2. Energy 704.4.3. Housing 714.4.4. Education 724.4.5. ICT 734.4.6. Summary 74

4.5. PERU 76

4.5.1. Water and Sanitation 784.5.2. Energy 794.5.3. Housing 804.5.4. Education 81

4.5.5. ICT 824.5.6. Summary 83

5. CHALLENGES AND OPPORTUNITIESFROM AN ACCESS TO BASIC NEEDS APPROACH 86

6. THE ROLE OF GOVERNMENTS CREATINGAN ENABLING ENVIRONMENT FOR THE BOP COMMUNITY 100

7. BIBLIOGRAPHY 106

INDEX


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6 7

BOPBase of the Pyramid

ECLACEconomic Commission for Latin America and the Caribbean

FAOFood and Agriculture Organization

GDPGross Domestic Product

HDIHuman Development Index

ICTInternet and Communications Technology

LACLatin America and the Caribbean

MDGMillennium Development Goals

OECDOrganisation for Economic Co-operation and Development

PPPPrice Purchasing Parity

SEDLACSocio-Economic Database for Latin America and the Caribbean

UNDPUnited Nations Program for Development

ACRONYM LIST


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Since Professors C.K. Prahalad and Stuart L. Hart.rst dened the concept Base of the Pyramid in 1998,there has been a big progress in how organizationsand companies are incorporating the same conceptinto their mainstream strategies.

#1

PROLOGUE


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10 11

PROLOGUE

Since Professors C.K. Prahalad and Stuart L. Hart rst dened the con-cept Base of the Pyramid in 1998, there has been great progress in howorganizations and companies are incorporating the same concept intotheir mainstream strategies. Today, governments, international organiza-tions, civil society organizations and especially companies from all over

the world have adopted the concept and are trying to develop frameworksand management systems that bring them closer to the real needs of BoPcommunities so they can work together with them as partners to developsocial value.

Through the development of inclusive businesses, low-income commu-nities have the potential to achieve greater access to goods and services, awider range of choices and better opportunities to improve their presentand future, while companies are exposed to new growth markets than canstrengthen their competitiveness and innovative capacity.

However, despite the interesting potential of such mechanisms, ensuringsuccessful business models within these frameworks has proven to bechallenging and there is a general lack of proven substantive, quantitativesuccessful results. There are still many methodological and managementvoids that need to be addressed, such as developing proper co-innovationprocesses with BoP communities, understanding and enhancing the fullpotential of generating social and economic value through the full lifecycle of product and service processes, and exploring upscaled and repli-cated models of successful pilot cases.

Essentially, it is necessary to ensure that business models are framed un-der specic concepts: availability, addressing challenges in distribution asBoP markets can be fragmented or non-existent; affordability, address-ing low income needs and matching the cash ows of customers whofrequently receive their income on a daily rather than weekly or monthlybasis; awareness building, promoting awareness and education in envi-ronments with limited media access and non-existent traditional mediaexposure; and acceptability, which implies adapting products and servicesto BoP demand and responding to socio-cultural dimensions.The Centre of Innovation for Inclusive Business (CIIB) was created as aplatform to respond to such challenges, with the aim of generating and

transferring knowledge to promote sustainable development through in-clusive business models. The CIIB works with universities, internationalorganizations, government agencies, businesses and business associa-tions to broaden their experience and knowledge of inclusive businessprojects that are benecial to society as a whole. Our work is focused on

the following three action areas:

Knowledge Generation and Transfer: Promoting research and develop-ing knowledge generation platforms with different stakeholders to gatherinsight on how to create tools, new mechanisms and management sys-tems that lead to the design of successful inclusive business models.

Incubation processes: Offering our experience and knowledge to compa-nies and organizations in their innovation processes and implementationof inclusive business projects. Additionally, we aid in the creation of evalua-tion frameworks and provide management for results driven schemes thatincrease the potential for the development of successful business models.

Communication and dissemination: Developing communication strate-gies that promote the dissemination of results and increase the replica-tion of successful projects.

As part of our interest in expanding knowledge and contribution to createa more enabling environment for inclusive business, we have producedthe report Understanding the BoP from an access to opportunities per-spective. The key intentions of this are: rstly, to illustrate how the con-sideration of BoP communities exclusively through their income levels islimiting and can be misleading for practitioners; and secondly, to developa series of recommendations to governments and public institutions onhow to create an enabling environment for inclusive business models.We have approached such objectives by discussing the meaning of pov-erty and recognizing the multidimensionality and complexity of its impli-cations, and by identifying a list of basic needs that encompass a broadercomprehension of the access to opportunities BoP communities need,namely: water, energy, housing, education, and information and com-munication technologies (ICT). This small group of needs has a broadconsensus as basic needs since they play a central role in policy frame-


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12 PROLOGUE 13

works, assessment indicators and poverty reduction initiatives such asthose promoted by UNDP, the Human Development Index or the Millen-nium Development Goals. Additionally, we have selected the top 5 popu-lated countries in Latin America Argentina, Brazil, Colombia, Mexicoand Peru - which account for over 400 million inhabitants (almost fourfths of the total population) and quantied their access to basic needs

from the BoP approach.

As concluding remarks we highlighted a set of challenges and opportuni-ties per each of the ve needs that BoP initiatives will have to sort out andleverage from if they want to truly create impact in poverty alleviation. Wealso suggested a series of recommendations to governments and interna-tional organizations to develop a better enabling environment for guaran-teeing more access to opportunities for BoP communities.

It is commonly accepted that new types of business models are needed inorder to improve current inequity levels as well as to solve humanitys sus-tainable challenges. Working with the BoP on innovative frameworks hasthe potential to address such challenges. This report aims to contribute tothe broader reection on the implications of going beyond understandingBoP communities exclusively through income parameters by adopting abasic needs approach and helping governments and international organi-zations dene their role to encourage the transition to a more equitable,sustainable and inclusive society.

Dr. Fernando Casado CaequeDirector of Centro de Alianzas para el Desarrollo (www.globalcad.org)Associate Director of BOP Global Network (www.bopglobalnetwork.org)Twitter: @Fernando_Casado


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#2EXTENDING

THE CONCEPTOF POVERTYFOR THE BOPDOMAINThere are two dominant ways of understanding

poverty: either as a lack of a certain level of income (or eco-nomic means) or as a deprivationin basic human needs.


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2. EXTENDING THE CONCEPT OF POVERTYFOR THE BOP DOMAIN

There are two dominant ways of understanding poverty: either as a lackof a certain level of income (or economic means) or as a deprivation inbasic human needs. Most of the research and work done in the eld ofthe BoP assumes that poverty is mainly an economic problem. In fact, theBoP has been repeatedly dened as the socioeconomic demographic seg-ment living below $ 3,260 a year in purchasing power parity terms. This

economic conception restricts the idea of poverty to the consumption of acertain basket of goods and services for reaching a minimal physiologicalwell-being.

However, apart from not having access to certain goods or lacking in-come, poverty also has social, political, emotional, and even cultural as-pects. Therefore, the basic needs approach offers a richer basis for analys-ing the multidimensionality of poverty, understanding its causes and thesituation of the poor, and allowing the formulation policies that aim toalleviate its implications directly.

To understand poverty in terms of basic needs it is important to recognizethat poverty is more than just a lack of income. In this case, poverty meanslacking food, clean water and education; suffering from ill-health and hav-ing a low life-expectancy rate and high mortality rate; or not having access tosanitation. To this end, poverty is not measured exclusively monetarily, butincludes social or process indicators. The basic needs conception of povertyalso captures the idea that various dimensions of life are not isolated fromeach other: they determine and affect each other in substantive ways.

Amartya Sen contributed to this approach by establishing that develop-ment is a fundamental right for human beings, and access to it has to bein a condition of freedom. Under this principle, Sen proposes a new ap-proach to development, based on the evaluation of possibilities for access-ing to opportunities that are required to achieve self-fullment and thusleads to a decent life. This is an innovative approach founded on freedomof individuals to access to opportunities necessary to live with meaningand dignity.

Thus, Sen evaluates development through the capabilities of people have toperform functions in complete freedom. Though he was reluctant to pro-vide a list of those freedoms, based on the principle that each communityshould propose the type of basic freedoms that must be guaranteed, his

work with the United Nations Program for Development (UNDP) and thedenition of Human Development Index (HDI) begins to establish the es-sential basic needs that every human being should have fullled to accessto a decent life. In this case, the provision of certain goods and services areimportant to achieve capabilities, but does not constitute and end by itself.

2.1. From fullling needs to enabling capabilities

There are several alternatives to conceive the multidimensionality of pov-erty, such as focusing on the deprivation or failure in basic capabilitiesto function in elementary human ways (Nalagon 2003). According to allthese conceptions, the mainstream view of the BoP in monetary termsshould be complemented with a basic needs approach which delivers amore complete framework for formulating policies and business strate-gies that aim to alleviate poverty.

However, needs are an ambiguous concept that has a considerable levelof normative assumptions. Several authors have formulated different listsof basic needs (Naussbaum, 2005; Pearce, 2006), although there is not auniversal common agreed list. Differences among social status, religionsor cultures have a great inuence to assess which are the ends needed foreach community.

In policy terms, needs satisfaction is translated into the provision of cer-tain goods and services (foodstuff, housing, clothing, clean water, healthclinics, educational facilities, etc.), which in the end is the main criterionfor monitoring and assessing poverty reduction programs. However, apolicy program can be judged successful independent of how and to whatextent people use these goods and services and how successful they arein their use. Therefore, there is a gap between having available goods andservices deemed essential and people being able to use them in ways thatimprove their lives. For this reason, the basic needs approach has beencomplemented with the capability approach.

Some of the capabilities required to achieve an individuals freedom maybe quite elementary, such as being adequately nourished and escapingpremature mortality, while others may be more complex, such as havingthe literacy required to participate actively in political life.Therefore, the foundations of the capability approach focuses on human


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18 EXTENDING THE CONCEPT OF POVERTY FOR THE BOP DOMAIN 19

ends and respecting the individuals ability to pursue and realize the goalsthat he or she values. There is a rejection of the economic model whereinindividuals act to maximize their self-interest heedless of relationshipsand emotions; an emphasis on the complementarities between variouscapabilities and recognition of human diversity, which draws attentionto the role played by ethical principles in the design of the good society

(Sen, Stiglitz, Fitoussi, 2008).

2.2. Towards a framework of access to human basic needs for the BoPdomain

The practical implementation of managing a common framework con-sidering an access to opportunities approach requires taking a numberof steps, the rst being a selected list of priority dimensions. After an in-depth analysis and selective approach of potential dimensions, a selectionof basic needs has been done answering the following (see Figure 1):

What are the crucial dimensions enablers to development that are rel-evant to the promotion of inclusive business?

What are existing lists of indicators that have achieved some degree ofpolitical legitimacy?

What type of data is actually available for each basic need?

This approach does not pretend to be a substitute of the BoP conceptu-alization, but proposes to expand its approach when considering the BoPand quantifying its population. This focus makes it possible to emphasizethe impact on people by considering what they value as important fortheir daily life and the environment in which they develop themselves.In addition, it will allow focusing on ends of various human activities,while recognizing that their achievement can matter both intrinsicallyand instrumentally. Moreover, it recognizes diversities and inequalities inhuman conditions, implying that societal well-being depends on both theaggregate level of what is relevant for peoples lives and also on how theyare distributed in society. Finally, it also calls attention to the multidimen-sionality of poverty, considering the broad variety of factors that povertydepends on, without claiming absolute priority of one over the others.

In this effect, on practical terms, the private sector faces a twofold chal-lenge: knowing what are the poor peoples true needs; and enhancingthe communitys capabilities and resources to give equal responsibilityfor imagining, piloting, and evolving a value proposition and new busi-ness. This conception requires moving from a basic needs fullmentperspective to an approach of capability development, which should en-able people to co-create business opportunities along with the rm whiledening their own aspirations and vision for the future.

Figure 1. Five basic needs for BoP quantication in terms of access to opportunities

EDUCATION

TIC

ENERGY

HOUSING


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#3STATE OF THEACCESS TOBASIC NEEDSIN LATINAMERICA

Ten percent of the worlds BOP population live in LatinAmerica and the Caribbean (LAC); nearly 370 million

people according to data published at the World EconomicForum (World Economic Forum, 2009).


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3. STATE OF THE ACCESS TO BASIC NEEDSIN LATIN AMERICA

3.1. BoP access to needs in Latin America: a benchmark analysis beyondincome

Ten per cent of the worlds BoP population lives in Latin America and theCaribbean (LAC); nearly 370 million people according to data publishedat the World Economic Forum (World Economic Forum, 2009). Income

levels within the BoP segment vary, with three being commonly distin-guished. The lower level comprises people living in extreme poverty andearning under US$1 per day; this population often struggles to meet ba-sic needs. The middle level refers to people living in poverty and earningbetween US$1-2 per day. The upper level consists of individuals earningUS$ 2-8 per day. In LAC most of the BoP population corresponds to theupper level. With 225 million, LAC is the worlds second largest region inthe world in terms of BoP population at this level. It is also worth men-tioning that the BoP segment represents the 62.4% of the LACs totalpopulation (588.5 million) (World Economic Forum, 2009).

All these gures clearly show that poverty is an obvious problem in LAC,but also a good testing ground for developing inclusive businesses at theBoP that promote economic development, social empowerment and en-vironmental protection.

Needless to say, LAC is also well known for its rampant inequity index-es across all countries. The share of income by quintiles follows a verysimilar pattern in the 5 countries analyzed Argentina, Brazil, Colombia,Mexico and Peru-. The richest quintile controls over 30% of the incomeshare, while the lowest remains between 10% and 11%. Little progresshas been made in the last two decades. The top quintile has slightly lostweight and, overall, the poorest one has remained equal, which denotesthat the emerging middle class has improved its living conditions (WorldBank, 2012).

There exists a common pattern of inequalities and income distributionacross Latin American countries. In this section we will argue that suchsimilar income distribution patterns do not necessary lead towards simi-lar basic needs scarcity. In fact, basic needs greatly differ from one countryto another. Therefore, it is essential to avoid generalizations and necessaryto screen basic needs on a country-by-country basis.

Due to the deep discrepancies among international organizations statisti-cal databases and country national bureau of statistics, we have decidedto favour some selected international sources (basically CEPAL, SEDLACand The World Bank), in order to ensure the most accurate and consistentpicture available, with the possibility of performing benchmarks amongcountries. However, given such discrepancies among sources, we highly

suggest that both international and national institutions join efforts toclose such big differences in the data reporting. This task will enable con-sistent policy actions and benet all the stakeholders interested in the ad-vancement of the quality of life among those most deprived.

Therefore, except where indicated, the gures used below come mainlyfrom the following sources: CEPAL statistical yearbook, The World Bank in-dicators, SEDLAC and FAO. Additionally, and due to the disparity of waysinto which data is presented, we decided to use two different approaches toillustrate the state of needs in the 5 selected countries based on data avail-ability. On one hand, we provide the quintiles approach (data segmentedby splitting countrys population into 5 even parts where the rst quintilerepresents the poorest and fth the richest). On the other, we offer the tra-ditional BoP threshold, segmented by people earning below $8 a day. Thisis just an additional argument to exemplify the need for homogenization ofdata among international agencies and national statistics bureaus.

3.2. Growth and economic development in need to address basic needs

Latin America has experienced sustained and constant growth over thelast decade. This is considered a big success from a broad number of fac-tors, especially given the fact that most developed economies are strug-gling through nancial crisis and recession. This period is considered therst time that Latin America has proven its independence from westerneconomic cycles, experiencing the crisis as an innocent bystander, not aprotagonist (although at the cost of a certain Chinese trade dependency).Some of the core factors that have characterized this success are: highcommodity prices, a growing middle class, solid macroeconomic man-agement and increasingly sophisticated nancial markets.

So despite the global economic downturn, the Latin American region grew5.9% in 2010 (5.63% in 2011). The direct consequences of this economic


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24 STATE OF THE ACCESS TO BASIC NEEDS IN LATIN AMERICA 25

growth have been the fact that tens of millions of Latin Americans haveclimbed out of poverty and joined a swelling lower-middle class. Accord-ing to World Bank studies, over the past decade, 73 million people werelifted out of moderate poverty on the heels of Latin Americas unprec-edented growth and economic stability1 (CEPAL/OECD, 2012).For the ve countries analyzed in this study, this decade has showed a

constant and sustained GDP growth, and in 2010, all economies weregrowing above 4% of GDP (see Figure 2).

Figure 2. GDP Growth of ve core economies in Latin America

In addition, considering GDP per capita at Purchasing Power Parity (PPP)from constant 2005 international dollars, all countries analyzed also expe-rienced a signicant increase, some of them more than 2000 US$ in thedecade, which represents more than 25% in only ten years (see Figure 3).

2000 2005 2010

10,00

8,00

6,00

4,00

2,00

0,00

-2,00

18000

16000

14000

12000

10000

8000

6000

4000

2000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

Source: Socio-Economic Database for Latin America and the Caribbean

(CEDLAS and The World Bank), 2012

Source: Source: Socio-Economic Database for Latin America and the Caribbean (CEDLAS and

The World Bank), 2012

Figure 3. GDP growth per capita of ve core Latin American economies

This implies that Latin American has undoubtedly become richer, and itscitizens, from an aggregated perspective, have a higher purchasing powerand enjoy a more active role in the economy.

However, despite the progress in economic growth and their ability toattract foreign direct investment, Latin Americas countries are still themost unequal economies in the world in terms of income distribution.Actually, the impact of the debt crisis has recently widened income gaps,and it was only in the past decade that this trend was reversed, thanks tomore inclusive labour market dynamics.

ARGEnTInAbRAZIlCOlOmbIAmEXICOPERulAC Aerage

ARGEnTInAbRAZIlCOlOmbIAmEXICOPERulAC Aerage

%GDPGROWTH

GDPGROWTHPERCAPITA

YEAR

YEAR


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1990-20080,70

0,65

0,60

0,55

0,50

0,45

0,400,40 0,45

CR EC

PYvE

uY

sv

AR

bO Cl

PA

mXlATIn AmERICA

nI

GT CO HnbR

0,50 0,55 0,60 0,65 0,70

This distributional disparity can be appreciated by comparing income lev-els between the richest decile and the four poorest deciles, and betweenthe fth quintile and the rst quintile. Taking the rst of these indices,the average per capita income of households in the tenth decile is around17 times that of the poorest 40% of households. This ratio varies greatlyfrom one country to the next, ranging from nine times in the Bolivarian

Republic of Venezuela and in Uruguay to 25 times in Colombia (2005data). The per capita income of the richest quintile is on average 19 timesthat of the poorest quintile, ranging from a factor of less than 10 (in coun-tries such as Venezuela and Uruguay) to 25 in Colombia or 33 in Hondu-ras2 (see Figure 4).

Figure 4. Distribution disparity on Gini index between 1990 and 2008

Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis ofspecial tabulations of data from household surveys conducted in the respective countries, 2011.

As many decision-makers have formulated, if the challenge of equality isto be properly addressed, there is an urgent need of extending private and

public participation and decision-making to broad sectors of society thathave been marginalized for centuries and enhance an effective ownershipof economic, social and cultural rights.

In this sense, access to opportunities for all means that governance sys-tems fully endow citizens with the right to access certain minimum levels

of social welfare and recognition, especially in elds such as education,health, employment, housing, basic services, environmental quality andsocial security. Therefore, besides progress experienced, Latin Americahas no time for complacency. Favourable external conditions will providebroader opportunities but tough decisions will have to be made in orderto ensure broader access to a better development.

3.3. Challenges addressing the need for qualitative and comparative information

One of the challenges faced performing this study was the lack of solid,veriable and comparable data systems on social indicators in the region.There is an urgent need to strengthen the statistical capacities of the re-gion and the inter-institutional co-ordination of organizations generatinginformation for development results in order to create a broader consen-sus, information coherence and a more dynamic relationship within thedifferent countries. A study performed by United Nations3 identied that58% of the series in MDG National Reports do not report values for MDGindicators and only 21% of all indicators provide 3 or more data in theseNational Reports (see Figure 5).

Source: United Nations, 2011.

70

60

50

40

PERCEnTAGE

AvERAGE ObsERvATIOns PER InDICATOR

nATIOnAl InsT.

InTER ORG.30

20

10

00 1 OR 2 mO RE T HA n 3


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Source: United Nations, 2011.

Figure 5. Average data availability for countriesSimilarly, comparing data between national statistic institutions and in-ternational organizations reect several discrepancies that jeopardize thepossibility of gathering information and performing benchmarks amongcountries. Only 8% of the total data series reported by National Reportsmatches the information reported within the UN Millennium database;45% did not have any data and 47% of data had discrepancies and was notcomparable among institutions (see Figure 6).

Figure 6. Comparison between national institutions and international or-ganizations on MDG information tracking

nO DATAsAmE vAluEDATA DIsCREPAnCYOR nOT COmPRAblE

Accordingly with the diagnostic of the main causes for the divergencesin the values of MDGs indicators between national and internationalsources, there is no doubt that building statistical convergence is a middleand long term process, progressive in nature. It implies a commitment ofinter-institutional work and coordination, which gradually becomes rou-tine, receives sufcient resources both in the national and internationalagencies domains, and is aimed to a common objective to which all par-ties involved contribute and from which they also benet.

Therefore, it seems obvious there is a strong need in promoting statisticalconvergence and monitoring development results, national policies and

regional initiatives not only in terms of a systematic monitoring, but alsoto undertake analyses and create reports on the status of goals and targets,usually employing supranational scales.

The main difculties of availability, comparability, and convergence of dataare related with the characteristics of the sources used. As identied by stud-ies of ECLAC4 the key challenges aiming to data convergence are weak-

ness of administrative registries, use of census projections for computationof some of the indicators, diversity of sampling-based surveys and periodsconsidered, lack of unication for certain denitions (in particular, unem-ployment), and lack of unication in procedures, sources, and correctionamong national statistical ofces and international organizations.

Some of the needed adjustments and procedures that need to be taken intoplace in order to harmonize the data available are the improvement of in-formation collection procedures, agreeing that data projections should beundertaken by one single organization (either from the country or fromUnited Nations system), unify denitions and collection of procedures, orincreasing in simultaneity or opportunity to report corrections applied topopulation projection, change of population framework of surveys, and oth-er modications applied to previously reported indicators, among others.

Therefore, in order to build the statistical convergence, it is crucial to pur-sue the following three action areas:

Development of Inter-institutional coordination as to strengthen statisticalprocesses among different ofcial institutions, both sectorial and by area;as well as the ones in charge of statistical control within the countries.

Articulation between statistical processes among agencies and countriesis required as it usually operates in separated spaces per area and withscarce coordination with the National Statistical Ofces.

Inter-agency coordination and regional and global areas within the Unit-ed Nations System (an element that can be a constitutional part of theguideline one UN) should be worked upon as to statistically strengthenthe organizations which work in the production and use of indicators fordevelopment, in particular, for MDGs along with the entities of statisticalcontrol organizations at regional and global scale.

8%

45%47%


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Access to improved water source is dened as one that is protected fromoutside contamination, in particular from fecal matter. The World HealthOrganization/UNICEF Joint Monitoring Program (JMP) for Water Sup-ply and Sanitation dened improved drinking water sources as: pipedwater into dwelling; piped water into yard/plot; public tap /standpipes;tube well /boreholes; protected dug wells; protected springs; rainwatercollection; and bottled water, if the secondary source used by the house-hold for cooking and personal hygiene is improved.

InDICATOR TWO:ACCEss TO sAnITATIOn fACIlITIEs (1) PERCEnTAGE Of POPulATIOn

The rst category of access to improved sanitation is measured as thosehouses that have a bathroom inside the house. This category includes thefollowing conditions: ush toilet; piped sewer systems; septic tank; ush/pour ush to pit latrine; ventilated improved pit latrine (VIP); pit latrinewith slab; composting toilet. This does not include the following: ush/pour ush to elsewhere; pit latrine without slab; bucket; or hanging toiletor hanging latrine.

InDICATOR THREE:ACCEss TO sAnITATIOn fACIlITIEs (2) PERCEnTAGE Of POPulATIOn

This second category of access to sanitation facilities includes houses thathave a bathroom in the house with ush toilet connected to sewage.

3.4. Indicator framework evaluation access to opportunities of BoP in Lat-in America

Given the constraints and limitations described, for the purpose of thestudy, ve key dimensions have been selected, quantied through a totalof 10 indicators:

FIRST DIMENSION: WATER AND SANITATION

InDICATOR OnE:ACCEss TO ImPROvED WATER sOuRCE PERCEnTAGE Of POPulATIOn

Access to electricity is dened as the percentage of the total population

that has electrical power in their home. It includes commercially soldelectricity, both on and off the grid. For those countries where access toelectricity has been assessed through government surveys, it also includesself-generated electricity.

THIRD DIMENSION: ACCESS TO HOUSING

SECOND DIMENSION: ENERGY

This variable records low quality of the materials used for the walls, roofand oor. Countries signicantly differ in the materials used for housesand in the coverage of these questions in the surveys. Materials that are aclear indicator of poverty in one country (or region) may not be related topoverty in other country. Comparisons based on these variables should bemade with care.

This indicator measures the quality of a countrys housing nance systemand the capabilities of its population to have a formal house, which guar-antees them not only a place to live but also property rights and access toproperty. Although denitions and measurements differ by country, it isnormally regarded as a house, an apartment, a mobile home, a group ofrooms or a single room that is occupied as separate living quarters with aregistered street address.

InDICATOR fIvE:DWEllInGs WITH lOW-quAlITY mATERIAls PERCEnTAGE Of POPulATIOn

InDICATOR fOuR:ACCEss TO ElECTRC EnERGY - PERCEnTAGE Of POPulATIOn

InDICATOR sIX:PERCEnTAGE Of POPulATIOn WITH fORmAl HOmE-OWnERsHIP


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FIFTH DIMENSION: ACCESS TO TECHNOLOGY

InDICATOR nInE: ACCEss TO InTERnET PERCEnTAGE Of POPulATIOn

The means in which a country can have access to internet by way of in-dividual terminals, computers, mobile devices, and local area networksconnected to the global Internet.

The percentage of population aged 20 years and over who can bothread and write with understanding a short simple statement on his/her everyday life. Generally, literacy also encompasses numeracy, theability to make simple arithmetic calculations. Adult illiteracy is denedas the percentage of the population aged 20 years and over who cannotboth read and write with understanding a short simple statement onhis/her everyday life.

FOURTH DIMENSION: ACCESS TO EDUCATION

InDICATOR sEvEn:lITERACY RATE (PERCEnTAGE Of POPulATIOn AGEs AbOvE 20)

This indicator measures the enrolment of the ofcial age group for sec-ondary education expressed as a percentage of the corresponding popula-tion. The indicator aims to measure the extent of coverage in secondaryeducation of children and youths belonging to the ofcial age group.

InDICATOR EIGHT: nET EnROlmEnT RATIO In sECOnDARY EDuCATIOn

InDICATOR TEn: ACCEss TO CEll PHOnE PERCEnTAGE Of POPulATIOn

As cell phones have become such an important tool for human develop-ment, poverty reduction and improved quality of life, the opportunity tohave access to cell phones reduces transport and transaction costs, whileit increases the opportunity to access information and assistance in caseof an emergency.

This indicator measures the percentage of population that have access tocell phones in each country.


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#4

COUNTRYPROFILES


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36 COUNTRY PROFILES 37

One of the most urgent matters in Argentina is the growing gap between the rich and the poor.Since 1974 the gap has followed a spiralling pattern with three periods of marked, strong increasesin income inequality: the mid to late seventies, late eighties and during a greater part of the nine-ties. When income is considered in terms of quintiles, the data suggest that the gap between the toprichest quintile and the bottom poor quintile has widened in Argentina between 1992 and 2005.(SEDLAC, 2011)

The number of Argentineans comprising the countrys BoP population was measured at 19 millionin 2010, representing a total of 47% of the total Argentinean population living below the US $8 a daylevel (SEDLAC, 2011).

ARGENTINA

POPULATION BELOW $8 PER DAYBASIC NEED

WATER &sAnITATIOn

GDP ANNUAL GROWTH

POPULATION

PERCENTAGE OF POPULATION LIVING WITH LESSTHAN US $8 PER DAY

YEAR 2000 0.7 %

YEAR 2010 9.1 %

40.5iio peope

47%

HOusInG

EDuCATIOn

EnERGY

37%

99%

95%

5%

of population with less than US $8 per daydont have access to a bathroom inside thehouse connected to sewage.

of people living with less than US $8 has ac-cess to electric energy.

of people living with less than US $8 lives onhouses with low quality material dwellings.

of people living with less than US$8 are literate.


20/56


Access to improved sources of water and sanitation facilities is apparentlyguaranteed for the vast majority of the Argentinean population (97.86%for 2010) (World Bank, 2012). Although access is also widely guaranteedfor the BoP Population, with rates around 96-98%, the evolution fromthe early 2000s to todays situation has slightly worsened.

Thus, access to an improved water source in Argentina is widespread,higher than the ve countries analysed and broadly above the Latin Amer-

ican average. Currently, 97.86 % of Argentinians living among BoP com-munities have access to improved water sources. However, it is worth not-ing that the level from 2 to 8US$ and the one from 4 to 8US$ experienceda slight decrease from 2000 to 2010 (almost around 1% decrease, fromabove 98 to above 97% respectively). Although this does not represent asignicant decrease, it is worth highlighting, considering the consequenc-es it could have if it becomes an increasing gap trend.

When it comes to needs regarding sanitation at the BoP, the picture looksgloomier. In 2010, still more than 25% of the BoP population did not en-joy sanitation facilities with a bathroom inside the house. Although thisgure is still above LAC average, it is a worrying factor that access to abathroom inside the house has decreased by almost 8% from 2000 to2010 for the population between 2 and 8US$ a day. Furthermore, andmore worrying, households with bathrooms connected to sewage has notonly decreased, suffering a serious backlash from 2000 (once again, forpopulation between 2 and 8 US$), but has dropped below the LAC aver-age and actually now has the lowest access to sanitation conditions fromthe ve countries analysed. Of the total Argentinian BoP community,more than 60% dont have a bathroom in the house connected to sewage.Contrasting this information with the high access the country has to im-proved water sources and to the averages of the region, it would be highlyrecommendable to prioritize access to sanitation in Argentina.

100,00

95,00

90,00

85,00

80,00< us $ 8 2 to 8 us $84 to 8 us $8 A ll

ACCEssTO ImPROvEDWATERsOuRCE- % POPulATIOn

ARGEnTInA 2000

ARGEnTInA 2010lAC 2000lAC 2010

90,00

80,00

70,00

60,00

50,00

ACCEssTO sAnITATIOnfACIlITIEs- % POPulATIOn (1)

ARGEnTInA 2000ARGEnTInA 2010lAC 2000lAC 2010 < us $ 8 2 to 8 u s $ 8 4 to 8 u s $ 8 A ll

65,00

20,00

25,00

30,00

35,00

40,00

45,00

50,00

55,00

60,00

< us $ 8 2 to 8 u s $ 8 4 to 8 u s $ 8 A ll


ARGEnTInA 2000ARGEnTInA 2010lAC 2000lAC 2010

Source: Socio-EconomicDatabase for Latin America

and the Caribbean (CEDLASand The World Bank), 2012



Source: Socio-Economic

Database for Latin Americaand the Caribbean (CEDLASand The World Bank), 2012

4.1.1. Water

PER

CEnTAGEOfPOPulATIOn

PERCEnTAGEOfPOPulATIOn


InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls


21/56


Access to electricity in the countrys 28 main cities varies little across in-come quintiles, with almost 98% of the lowest quintile in those areas hav-ing access to electricity and almost 100% of the highest quintile havingaccess. Electric power consumption rate is also promising with one of thehighest kWh per capita rates among the Latin American continent. Witha sustained yearly growth around 6% in the electric power consumptionper capita, Argentina consumes energy signicantly higher than the othermajor Latin American economies studied. (SEDLAC, 2011).Access to energy for the BoP population was almost universal in the year2000 and actually one of the highest of the whole region. However, herewas not information available for the year 2010.

Both indicators analyzed to measure the housing conditions of the BoPin Argentina indicate that on one hand, there is a rather low populationliving in dwellings with low-quality materials (a total of 5.17% comparedto the LAC average of 23%, and one of the lowest in the region jointlywith Brazil), and on the other, a big percentage of that same populationwith formal ownership of their households (again, way above LAC aver-age and one of the biggest of the region, jointly with Mexico). However,it is worth noting how both indicators have worsened signicantly since2000 (dwellings with low-quality materials increased by almost half, andpercentage of formal home ownership decreased by a total of 10%). Onceagain, it is worth considering these facts in order to ensure they do notbecome an increasing trend gap in the conditions of BoP population inthe country.

Nevertheless, on the positive side, the proportion of those living in ur-ban slums in Argentina has continuously decreased from 30.5% in 1990down to 26.2% in the latest information gathering of this indicator takenin 2005, (UNHABITAT, 2008).


DWEllInGsWITH lOW-quAlITYmATERIAls-% POPulATIOn

ARGEnTInA 2000ARGEnTInA 2010lAC 2000lAC 2010

25,00

30,00

15,00

20,00

10,00

5,00

-< us $ 8 2 to 8 us $8 4 to 8 us $8 All

% fORmAlHOmE-OWnERsHIP-% POPulATIOn

ARGEnTInA 2000


65,00

70,00

75,00

55,00

60,00

50,00

45,00

40,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All

4.1.2. Energy

4.1.3. Housing



Source: Socio-EconomicDatabase for Latin Americaand the Caribbean (CEDLASand The World Bank), 2012




InCOmE lEvEls



InCOmE lEvElsInCOmE lEvEls

ACCEssTO ElECTRICEnERGY- % POPulATIOn

100,00

90,00

80,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All


22/56


Indicators related to youth and adult literacy of BoP communities in Ar-gentina score signicantly high, reaching almost universal access (98.11%literacy rate of people ages above 20) way beyond the LAC average and high-er than any of the countries analysed. Additionally, net enrolment ratio insecondary education is also considerably high in relation to its neighbourcountries and the LAC average (with 77.4% of enrolment ratio, Argentina ishighest among countries analyzed and way beyond the 53.73% of the LACaverage).

However, as stated with other dimensions, there is a slight decrease in thenet enrolment ratio percentage of the population between 4 and 8US$ a day(from 83.37 to 81.41%) from 2000 to 2010.

Furthermore, the disparities in literacy rates are still apparent when the datais considered by income quintile. The countrys net secondary and tertiaryeducation enrolment rates vary signicantly by income quintile. In thesecases of secondary and tertiary education, the lowest quintiles net enrol-ments in 2009 were 71.7% and 17.2%, respectively; whereas the net enrol-ment rates among those in the highest quintile were 95.7% and 57.1%.

4.1.5. ICT

Argentina, as any other emerging country in the region, is experiencinghigh growth rates in both number of mobile cellular subscriptions and ab-solute number of Internet users. In 2010 Argentina performs better thanthe Latin American average and the other selected countries in all ICT re-lated indicators. For example, per every 100 Argentinean citizens 36 are In-ternet users (34 in Latin America) and 10 have access to broad land Internetconnexion (6.6 in Latin America). Unfortunately, data for the BoP group ofthe population is still not available.

ARGEnTInA 2000ARGEnTInA 2010lAC 2000lAC 2010 80,00

82,00

84,00

86,00

88,00

90,00

92,00

94,00

96,00

98,00

100,00

< us $ 8 2 to 8 us $8 4 to 8 us $8 All

nET EnROllmEnTRATIOn InsECOnDARYEDuCATIOn

ARGEnTInA 2000ARGEnTInA 2010lAC 2000lAC 2010 40,00

45,00

50,00

55,00

60,00

65,0070,00

75,00

80,00

85,00

90,00

< us $ 8 2 to 8 us $8 4 to 8 us $8 All

4.1.4. Education

PERCEnTAGEOfPO

PulATIOn


InCOmE lEvEls

InCOmE lEvEls





lITERACY RATE(% Of PEOPlEAGEs AbOvE 20)


23/56


The following conclusions can be obtained from the analysis:

Having access to qualitative information concerning the BoP is chal-lenging. No information has been obtained on the indicator of energyfor 2000 and for ITC (either for 2000 nor 2010).

Argentina has the highest access to improved water in the region, andalthough access for people living on less than US $8 per day has de-creased slightly since 2000, it is almost universal.

More than 25% of for people living on less than US $8 per day do not haveaccess to a bathroom inside the house and more than 60% of the BoPdoes not have a bathroom connected to sewage. Although this gure isstill above the LAC average, it highlights areas of needed improvement.

Energy access offor people living on less than US $8 per day in 2000was of 99.25 %, one of the highest in the whole region.

Argentina is one of the countries analyed with lowest percentage ofpopulation living in dwellings with low-quality materials (jointly withBrazil). Formal home-ownership is rather low in Argentina for for peo-ple living on less than US $8 per dayand has actually decreased in thelast ten years (from 63.74 to 54.18%).

Argentina is by far the highest country in literacy rates (97.42% of for peo-ple living on less than US $8 per day is literate, almost 10 percentile abovethe rest of the countries analyzed) and also enjoys the highest net enrol-ment ratio to secondary education.

4.1.6. Summary

Argentina has made signicant progress in several development dimen-sions and is above the LAC average, as well as above several of the coun-tries analysed. Nevertheless, one aspect that surprises in Argentina is thelack of information for some of the indicators selected for 2010 (such as

access to energy or access to cell phones and Internet). Additionally, it isalso surprising how some indicators have actually worsened since 2000.

WATER &sAnITATIOn

HOusInG

ICT

EDuCATIOn

EnERGY nA

nA nA

nA

nAnA

Access to improved watersource - % population

ACCEss TO ImPROvED WATER

EnERGY (AlTHOuGH lACk Of InfORmATIOn)

EDuCATIOn

Access to sanitationfacilities - % population (1)


Access to electric energy- % population

Dwellings with low - qualitymaterials - % population

% formal home ownership- % population

Literacy rate (% of peopleages above 20)

Net enrollment ratioin secondary education

Access to internet- % population

Access to cellphone- % population

DIMENSIONS INDICATORS

DIMENSIONS OF GOOD PERFORMANCE DIMENSIONS NEEDED OF IMPROVEMENT

INFORMATIONAVAILABLE

2000 2010

RELATION TOLAC AVERAGE

PROGRESSSINCE 2000

ACCEss TO sAnITATIOn, sPECIAllY bATHROOmsCOnnECTED TO sEWAGE

DWEllInGs Of lOW quAlITY mATERIAls AnDfORmAl OWnERsHIP Of HOusEs

PROvIDE bETTER ACCEss TO InfORmATIOn


24/56


Brazil is the most populated country in Latin America, with over 190 million people. Although theBrazilian economy is one of the largest in the world, income disparities are still very high. In 2007,the richest 10% of households represented 45% of the income, while the poorest 10% had only0.9% (SEDLAC, 2010). In 2009, Brazilhad more than 103 million people living with less than 8dollars a day .

Despite this high-income concentration, the Brazilian economy has achieved important develop-ments since the early nineties. Economic stability, with the end of high ination rates, was one ofthe main economic conquests that allowed a more sustainable growth. Other relevant factors such

as growth of formal jobs and minimum wages, social programs, and the increased participation ofwomen in the economy have also been essential to the ease of poverty in the last decades. Neverthe-less, there are still many issues concerning access to basic needs in the lower economic classes thathave to be addressed.

BRAzIL

GDP ANNUAL GROWTH

POPULATION


YEAR 2000 4.31%

YEAR 2010 7.53%

190.7iio peope

54%


WATER &sAnITATIOn

HOusInG

EDuCATIOn

ICT

EnERGY

41%

99%

84%

75%

3%

of people living with less than US $8 donthave access to a bathroom inside the houseconnected to sewage.

of people living with less than US $8 has ac-cess to electric energy.

of people living with less than US $8 live onhouses with low quality material dwellings.

of people living with less than US $8 are literate.

of people living with less than US $8 has accessto a cell phone.


25/56


In Brazil, access to water is almost universal, with 97% of the total popula-tion having access to clean water (The World Bank, 2012). However, if welook at the percentage of population having access among the BoP popu-lation, we nd only 87.5% of those l iving on less than $8 dollars a day haveit (among them, 93% with income between $4 and $8 and 90% of thosebetween the $2 and $8). Notwithstanding, the evolution of this indica-tor is positive with relevant improvements on the availability of improvedsources of water from 2000 to 2010.Concerning indicators related to sanitation, the availability of sewage sys-

tems and bathrooms among BoP communities is signicantly lower, mak-ing Brazil actually among the countries with lowest access to a bathroominside the house and to a bathroom connected to sewage among the vecountries analyzed. Only 44% of the Brazilian population earning below$8 per day enjoy a bathroom connected to the sewage network. However,it is fair to say that in the last decade, access to sanitation has experienceda signicant improvement increasing its access by 5 percentage points forthe population having a bathroom inside the house.

4.2.2. Energy

In Brazil access to energy is well spread across the entire population. Forinstance, the access to electricity rate for the entire population is 98.3%,5% higher than the Latin American average (World Bank, 2012) and joint-ly with Mexico, it is a country that enjoys broader access to energy amongits population. Furthermore, ratios of access to energy among the BoPhave improved to almost complete accessibility across all segments. Inyear 2000, 93.8% of the households below the $8 income had access toelectricity while in 2010 the ratio increased to 98.1%. Figures for the high-end segments of the BoP (from $4 to $8) enjoy almost absolute access.








4.1.1. Water

65,00

70,00

75,00

60,00

55,00

50,00


bRAZIl 2000bRAZIl 2010lAC 2000lAC 2010

< us $ 8 2 to 8 u s $ 8 4 to 8 u s $ 8 A ll

58,00

40,00

42,00

44,00

46,00

48,00

50,00

52,00

54,00

56,00

< us $ 8 2 to 8 us $8 4 to 8 us $8 All



ACCEssTO ElECTRICEnERGY- % POPulATIOn

96,00

98,00

100,00

94,00

92,00

90,00

88,00< us $ 8 2 to 8 us $8 4 to 8 us $8 Al l






InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls InCOmE lEvEls

90,00

92,00

94,00

88,00

86,00

84,00

82,00

80,00


bRAZIl 2000

bRAZIl 2010lAC 2000lAC 2010

< us $ 8 2 to 8 us $8 4 to 8 us $8 All


26/56


Concerning the differences in housing quality, data shows a decrease inthe population living in dwellings with low-quality materials, which sets thegures way below the average in LAC. For example, 1.33% of the populationearning between $4 and $8 a day lives in poor quality dwellings, whereasthe average for Latin America is 16.84% (SEDLAC, 2011). Furthermore,only 2.06% of population between 2 and 8 dollars in 2010 lived in dwell-ings with low-quality materials versus the Latin American average 20.9%.

However, it is worth mentioning that ratios of formal home ownershipdo not have the same positive trend, due to the fact that progress in thelast 10 years has stagnated or even signicantly decreased in the case ofthe to $2 to $8 level. In 2010, the BoP population in Brazil performed onsimilar standards as the BoP LAC average, which experienced a decreasefrom 71% in 2000 to 66% in 2010 (SEDLAC, 2011).

4.2.3. Housing 4.2.4. Education

Brazils education ranks amongst the lowest in the LAC region, falling be-hind other countries in both literacy rates and net enrolment ratio in sec-ondary education. The number of functional illiterates in Brazil is extreme-ly high. In 2010, only 84.4% of the population above the age of 20 withincome lower than $8 per day was literate. This percentage is the lowest ofthe ve countries analyzed and ranks considerably below the LAC average.However, it must be highlighted that Brazil made a successful effort in thelast ten years (and the 5% increase in literacy rates can be appreciated).

With regard to net enrolment ratio in secondary education, Brazil alsounderperforms compared to its regional partners, having by far the coun-try the least access to secondary education. Although access to secondaryeducation has increased considerably, Brazil still faces great challenges toovercome the current situation and provide better options for its unders-erved BoP communities in terms of access to education.


bRAZIl 2000

bRAZIl 2010lAC 2000lAC 2010

25,00

30,00

15,00

20,00

10,00

5,00

-< us $ 8 2 to 8 us $8 4 to 8 us $8 All

nET EnROllmEnTRATIO InsECunDARYEDuCATIOn


53,00

58,00

63,00

43,00

48,00

38,00

33,00

28,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All



88,00

90,00

92,00

84,00

86,00

82,00

80,00

78,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All



72,00

74,00

68,00

70,00

66,00

64,00

62,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All














27/56


4.2.5. ICT

Brazils use and spread of technology is rising rapidly at a double-digitrate in gures such as Internet users, mobile phone subscriptions or per-sonal computers. Case in the point, its number of mobile phone subscrip-tion increased 25% in 2008 and 15% in 2009 (World Bank, 2012) andits internet users almost doubled in 5 years (between 2005 and 2010) up

to 40.65%, broadly above the Latin American average (34.12%). Brazilsgrowth in number of Internet users and cellular subscriptions is by farthe highest among the main Latin American economies (World Bank,2012).

The use of cellular phone technology also spread throughout the BoP withstrong emphasis on the upper level of $4 to $8 dollars per day and withan overall increase of more than 50% in population having access to cellphones from 2000 to 2010.

ACCEssTO CEll PHOnEs- % Of POPulATIOn


70,00

80,00

90,00

50,00

60,00

40,00

30,0020,00

10,00< us $ 8 2 to 8 us $8 4 to 8 u s $8 All

WATER &sAnITATIOn

HOusInG

ICT

EDuCATIOn

EnERGY

nA nA











DIMENSIONS INDICATORSINFORMATION

AVAILABLE2000 2010


PROGRESSSINCE 2000

4.2.6. Summary

People living with less than US $8 market in Brazil consists of 103 mil-lion people, which demographically represents a considerable productiveand entrepreneurial potential, as well as untapped demand for services. Asit can be appreciated by the data analysed, dimensions such as sanitation,education and percentage of formal house ownership are below the LAC

average, although all of the areas have improved signicantly since 2000.


InCOmE lEvEls




28/56



Brazil enjoys fairly good access to information of people living with lessthan US $8. The only indicator without information has been percent-age of population with access to Internet.

The country has enjoyed general widespread improvement in all vedimensions analyzed since 2000.

Brazils population living with less than US $8 has an 87.5% access toan improved water source. Although it is still lower than some of thecountries benchmarked, it has experienced a signicant increase since2000 (more than 7%).

Its access to a bathroom in the house, as well as connected to sewageis among average in the region, and it experienced an increase from2000 with exception of the upper BoP level, which experienced cer-tain backlashes.

Brazil enjoys almost complete accessibility across all segments in termsof energy.

In terms of access to housing, Brazil is the country with lowest percent-age of population living in dwellings with poor materials and 66.14% ofBoP population enjoys formal home-ownership.

However, Brazil is very poor in literacy rates (21% of people living withless than US $8 was illiterate in 2000, although that percentage hasbeen reduced to 14% in only ten years) and has the lowest net second-ary enrolment ratio of all countries analyzed and way below the LACaverage.

Brazil, as all the other countries analysed, has increased signicantly itsaccess to Internet and cell phones and its access to internet and mobilephones is slightly higher than the LAC average.

ACCEss TO ImPROvED WATER

EnERGY

DWEllInGs Of lOW quAlITY mATERIAls

ACCEss TO CEll-PHOnEs


ACCEss TO sAnITATIOn AnD bATHROOmsCOnnECTED TO sEWAGE

IllITERACY RATEs AnD EDuCATIOn


29/56


From 1970 to 1996 Colombia witnessed a high and sustained growth resulting in major pov-erty-reduction achievements. Particular attention is drawn to the period between 1978 and1995 where the average economic growth rate was about 4%, unemployment did not exceed10%, (with a few exceptions), and the income per capita nearly doubled. Thanks to these fac-tors, the percentage of Colombians below the poverty line decreased by 20 percentage pointsand abject poverty was reduced from 45% to 21% in that same period (World Bank, 2012).

However, despite the progress that Colombia has made in the previous decades, there are still

considerable and challenging income disparities among its population. The share of nationalincome represented by the richest quintile was 60% in 2010, while the poorest quintile rep-resented 3% that same year. The population living with less than US $8 reached 28.6 millionpeople in 2010, which represents 62% of Colombias population.

COLOMBIA

GDP ANNUAL GROWTH

POPULATION


YEAR 2000 4.4%

YEAR 2010 4%

66,4%


WATER &sAnITATIOn

HOusInG

EDuCATIOn

ICT

EnERGY

65%

95%

89%

85%

65%

of population living with less than US $8 perday dont have access to a bathroom inside thehouse connected to sewage.

of population living with less than US $8 perday has access to electric energy.

of population living with less than US $8 perday lives on houses with low quality materialdwellings.


of population living with less than US $8per day has access to a cell phone.

45.5

iio peope


30/56


4.3.1. Water and Sanitation

Regarding access to improved clean water, 10% of Colombian populationand only 13% of the BoP population did not have formal access to water in2010. These indicators become more worrisome considering the fact thatthey have worsened since 2010 (between 1 and 4% increase depending onthe population category).

Concerning improved sanitation facilities indicators, Colombia scores quitehigh in comparison with other Latin American countries and broadly abovethe LAC average. In the case of population with access to a bathroom insidethe house with connection to sewage, 61.32% of Colombian BoP popula-tion had access, representing almost 20% more than the rest of countriesanalyzed and the LAC average. However, the trend of this indicator has de-creased 4% since 2000 (specically, it was of 65.51% in 2000).

BASIC NEED AREA INDICATOR PERIOD COLOMBIA

< US $ 82 US $-US $8

4 US $-US $8

WATER &sAnITATIOn

ACCEss TO ImPROvEDWATER sOuRCE- % POPulATIOn

CIRCA 2000 88.6487.03

80.89

84.25

65.51

61.32

92.3788.80

87.25

87.75

72.51

66.32

94.6491.48

92.56

91.62

80.79

74.36

CIRCA 2010

CIRCA 2000

CIRCA 2010

CIRCA 2000

CIRCA 2010

ACCEss TO sAnITATIOnfACIlITIEs - %POPulATIOn (1)

ACCEss TO sAnITATIOnfACIlITIEs - %POPulATIOn (2)

65,0070,0075,0080,0085,0090,0095,00

60,0055,0050,00


COlOmbIA 2000COlOmbIA 2010lAC 2000lAC 2010 < us $ 8 2 to 8 u s $ 8 4 to 8 u s $ 8 A ll


COlOmbIA 2000COlOmbIA 2010lAC 2000lAC 2010

85,00

40,00

45,00

50,00

55,00

60,00

65,00

70,00

75,00

80,00

< us $ 8 2 to 8 us $8 4 to 8 us $8 All

90,00

92,00

94,00

96,00

88,00

86,00

84,00

82,00

80,00


COlOmbIA 2000

COlOmbIA 2010lAC 2000lAC 2010

< us $ 8 2 to 8 us $8 4 to 8 us $8 All




InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls



Source: Socio-Economic Da-

tabase for Latin America andthe Caribbean (CEDLAS andThe World Bank), 2012


31/56


4.3.2. Energy

Access to energy at the BoP reached 95% for the total population withincome below the $8 threshold (slightly higher for population from $2to $8, and for the population from $4 to $8 per day). However, similarto the case of access to sanitation and water, one can observe a consistentbacklash on the ratios of accessibility (from 96.76% in 2000 to 95.44% in2010 for BoP population). Its current gures, though, are in line with theLatin American averages and the other countries analyzed for the samepopulation segments.

4.3.3. Housing

Colombia has a high proportion of its population living in poor dwell-ings or dwellings with low-quality materials which is concentrated inthe bottom three income quintiles: 81% of the poorest quintile and 71% ofthe second poorest quintile in 2010 (SEDLAC, 2011). On the bright side,the number of those living in urban slums in Colombia decreased by ap-proximately 8 percentage points between 1990 and 2005, falling from26% to 17.9% (UNHABITAT, 2008).

ACCEss

TO ElECTRICEnERGY- % POPulATIOn

94,0095,0096,0097,0098,00

99,00100,00

93,0092,0091,0090,00

< us $ 8 2 to 8 us $8 4 to 8 us $8 All


Concerning the BOP, Colombias housing needs is facing a worrying sit-uation compared to other LAC countries. The percentage of populationwithin the BOP living under poor quality material dwellings is doublethe average of Latin America. Figures worsened signicantly in the last10 years to the point that 51.55% of the community living with $4 to $8dollars a day lives in poor quality dwellings. This is a sharp contrast to the16.84% average for Latin America.

The situation with formal home-ownership is even worse, where all levelsof the BoP suffered a serious regress of more than 10 percentage points.In 2000, 58.28% of households owned their homes formally. Ten yearslater this ratio went down to 44.42%.



65,00

70,00

75,00

55,00

60,00

50,00

45,00

40,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All


COlOmbIA 2000COlOmbIA 2010

lAC 2000lAC 2010

60,00

70,00

40,00

50,00

30,00

20,00

10,00- < us $ 8 2 to 8 us $8 4 to 8 us $8 All




InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls

Source: Socio-Economic Da-tabase for Latin America andthe Caribbean (CEDLAS andThe World Bank), 2012



Source: Socio-Economic Da-tabase for Latin America andthe Caribbean (CEDLAS andThe World Bank), 2012


32/56


4.3.4. Education

Colombia has a high variance among income quintiles with respect toboth youth and adult literacy rates. The 96.4% of those in the lowestquintile had achieved literacy in 2010, compared to 99.2% of those in thehighest quintile (SEDLAC, 2011). With regards to adult literacy, the vari-ance among income quintiles was even higher, with 85.5% of those in thelowest quintile having achieved literacy and 99.0% of those in the highestquintile having done so for 2010 (SEDLAC, 2011).



92,00

94,00

96,00

88,00

90,00

86,00

84,00

82,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All

The BoP literacy rates have not improved when 2000 standards are com-pared with the latest gures available from 2010. The BoP communitysliteracy rate among those older than 20 was 90% in 2000 and slipped to89.4% in 2010. On a positive note, net enrolment in secondary educa-tion did improve signicantly for the overall BoP (from 65% in 2000 toalmost 76% in 2010) and remarkably for those in the lowest levels. These

increases are more moderate for the $4 to $8 income level; although itsaccess is rather high (81.76% of the segment from 4 to 8 dollars was en-rolled in secondary education).

4.3.5. ICT

Broadly speaking, the access to cellular phones in Colombia is widespread

with 96 per 100 inhabitants having cell phones in 2010 (World Bank,2012). However, only 18.1% seemed to have internet access in 2010 (only7.84% of BoP population). That said, when compared to other coun-tries analyzed, Colombia has one of the highest rate of access to cellularphones and Internet access, signicantly above the LAC average, and aswith other countries, growth rates and numbers of users of both Internetand cellular phones have rocketed in the last decade.

nET EnROllmEnTRATIO InsECunDARYEDuCATIOn


53,00

58,00

63,00

43,00

48,00

38,00

33,00

28,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All



60,0070,0080,0090,00

100,00

40,0050,00

30,0020,0010,00

-< us $ 8 2 to 8 us $8 4 to 8 us $8 All

ACCEssTO InTERnET- % Of POPulATIOn


12,0014,0016,0018,0020,00

8,0010,00

6,004,002,00

-< us $ 8 2 to 8 us $8 4 to 8 us $8 All




PERCEn

TAGEOfPOPulATIOn

InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls








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Colombia enjoys fairly good access to information of the population liv-ing with less than US $8 per day. The only indicator without informationhas been percentage of population with access to Internet in 2000.

Given the high trending economic growth in Colombia during the lastdecades it is concerning how a lot of the access to the dimensions ana-

lysed has actually worsened since 2000. This is the case with access towater, access to sanitation facilities connected to sewage, access to elec-tricity, percentage of dwellings with low-quality materials, percentage ofpopulation with formal home ownership and literacy rates.

Colombia has a high access to improved water sources and is the coun-

try in the region with the highest access to sanitation facilities, almost20% higher than the LAC average and broadly above all other countriesanalyzed. However as mentioned, their access as of 2010 has decreasedsince 2000.

Similarly with energy, Colombia has a high level of access for its popula-tion living with less than US $8 per day, reaching 95%, but with a slightdecrease in the last 10 years. Paradoxically, Colombia is the country thatscores highest in percentage of dwellings with low-quality materials andlowest in percentage of formal homeowners. This situation has also wors-ened since 2000 and is the area that needs the most immediate action.

Interestingly, literacy rates have decreased slightly since 2000 (but arerather high compared to the region and second highest of countriesanalyzed) while secondary education has reached 75.95% for the popu-lation living with less than US $8 per day, which again, is consideredone of the highest in the region.

In terms of connectivity and access to ICT, Colombia scores higher thanany other country and is actually the country with the highest popula-tion with access to Internet and cellular phones.

WATER &sAnITATIOn

HOusInG

ICT

EDuCATIOn

EnERGY

nA

nA











DIMENSIONS INDICATORSINFORMATION

AVAILABLE2000 2010


PROGRESSSINCE 2000

4.3.6. Summary


DWEllInGs WITH lOW quAlITY mATERIAl AnDPERCEnTAGE Of fORmAl HOmE OWnERsHIP

ACCEss TO sAnITATIOn AnD COnnECTIOn TOsEWAGE (bEsIDEs DECREAsE)

ACCEss TO EDuCATIOn

ACCEss TO ICT(InTERnET AnD CEllulAR PHOnEs)


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From 1970 to 1996 Colombia witnessed a high and sustained growth resulting in major pov-erty-reduction achievements. Particular attention is drawn to the period between 1978 and1995 where the average economic growth rate was about 4%, unemployment did not exceed10%, (with a few exceptions), and the income per capita nearly doubled. Thanks to these fac-tors, the percentage of Colombians below the poverty line decreased by 20 percentage pointsand abject poverty was reduced from 45% to 21% in that same period (World Bank, 2012).

However, despite the progress that Colombia has made in the previous decades, there are still

considerable and challenging income disparities among its population. The share of nationalincome represented by the richest quintile was 60% in 2010, while the poorest quintile rep-resented 3% that same year. The population living with less than US $8 per day reached 28.6million people in 2010, which represents 62% of Colombias population.

MEXICO

GDP ANNUAL GROWTH

POPULATION

PERCENTAGE OF POPULATION LVING WITH LESSTHAN US $8 PER DAY

YEAR 2000 6.6%

YEAR 2010 5.5%

63%


WATER &sAnITATIOn

HOusInG

EDuCATIOn

ICT

EnERGY

42%

98%

89%

17%

39%

of population living with less than US $8 perday population dont have access to a bath-room inside the house connected to sewage.

of population living with less than US $8 perday has access to electric energy.

of population living with less than US $8 perday lives on houses with low quality materialdwellings.


of BOP population has access to a cell phone

102.3iio peope


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4.4.1. Water and Sanitation

The proportion of Mexicos total population having access to improvedwater sources reached 91% in 2010, with a small increase from its 89.9%gures of 2000, and is considerably above the LAC average. On thecontrary, although access to water of the BoP population is fairly lower(roughly 88%), but still a signicant near 3% increase from its gures in2000 (which was at 85.91%). Today Mexico is the second highest coun-

try in access to water of the ve countries analyzed. Although, it is worthnoting that the income level from $4 to $8 has experienced reductions inaccess to water during that same period (from 94% to 92%). From this itis assumed that progress has occurred in the lower BoP (from $1 to $4)but not in the highest level.

In relation to the access to sanitation and to bathrooms connected to sew-age, Mexico is worryingly with lowest access to a bathroom inside thehouse and one of the lowest with bathrooms connected to sewage. Inter-estingly enough, we can observe a similar pattern as with the indicatorsderived from access to water: in general, the trend for the overall popula-tion and for the BoP population has improved since 2000, but the levelfrom $4 to $8 has worsened (from 63.58% to 59.45 % for access to abathroom in the house and from 56% to 52.48% for access to bathroomwith sewage).


90,00

92,00

94,00

96,00

88,00

86,00

84,00

82,00

80,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All


50,00

55,00

60,00

65,00

70,00

75,00

45,00

40,00< us $ 8 2 to 8 u s $ 8 4 to 8 u s $ 8 A ll


35,00

40,00

45,00

50,00

55,00

60,00




InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls






mEXICO 2000mEXICO 2010lAC 2000lAC 2010



< us $ 8 2 to 8 us $8 4 to 8 us $8 All


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4.4.2. Energy

Mexico has a broad access to energy, performing above the average ofcountries selected and above the LAC average, enjoying a high degree ofaccessibility to the grid. Access to energy has increased signicantly since2000, reaching 98.8% of access for the population living with less than

US $8 per day in 2010.

4.4.3. Housing

Mexico has successfully decreased its number of dwellings made withlow-quality materials in the last decade (from 46.9% in 2000 to 39.41%in 2010). However, this score is still very high compared to the LAC aver-age and other Latin American countries. Additionally, Mexicos percent-age of population formally owning a home has experienced a worrisomebacklash from 2000 to 2010. In 2010, Mexico had the highest percentageof property owners among the BoP population, broadly above the LACaverage and all countries analysed. Unfortunately, that same year it ex-perienced a 9% decrease of ownership in the population living with lessthan US $8 per day, positioning it at 68.13%.

ACCEssTO ElECTRICEnERGY- % POPulATIOn 98,00

100,00

96,00

94,00

92,00

90,00< us $ 8 2 to 8 us $8 4 to 8 us $8 All

DWEllInGsWITH lOW-quAlITY

mATERIAls-% POPulATIOn

25,0030,00

35,00

40,0045,0050,00

20,00

15,0010,00

5,00-

< us $ 8 2 to 8 us $8 4 to 8 us $8 All


70,0072,00

74,00

76,0078,0080,00

68,00

66,0064,00

62,0060,00

< us $ 8 2 to 8 us $8 4 to 8 us $8 All

PERCEnTAGEOfPOPulATIOn P

ERCEnTAGEOfPOPulATIOn


InCOmE lEvEls

InCOmE lEvEls

InCOmE lEvEls









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4.4.4. Education

Mexico has a high variance among income quintiles with respect to bothyouth and adult literacy rates. Regarding youth literacy, 96.0% of those inthe lowest quintile had achieved literacy in 2010, compared to 99.2% ofthose in the highest. With regards to adult literacy, the variance among in-come quintiles was even higher, with 82.7% of those in the lowest havingachieved literacy and 99% of those in the highest having done so (SED-LAC, 2011), with both indicators above the LAC average.

Concerning the BoP community, Mexico enjoys a signicant higher de-gree of literacy than 10 years ago with an improvement of 4.3% for thoseabove 20 years old. The enrolment in secondary schooling has also rock-eted, increasing more than 10 points from 60% to 70%.

4.4.5. ICT

In 2010 Mexico had 31 internet users, 80.5 mobile cellular subscriptionsand 17 land telephone lines per every 100 people (World Bank, 2012).Such gures are slightly below the Latin American average (34, 98 and18 users per 100 inhabitants in 2010 respectively) (World Bank, 2012).The picture for the BOP in terms of use of communication and Internettechnologies is rather ambiguous. When compared to the Latin American

average of those with incomes below $8 per day the situation in Mexicois slightly better in terms of access to Internet (7.43% vs. 3.74% in LatinAmerica) but considerably worse in respect to cellular phones access (57%vs. 64.91%).


88,00

90,00

92,00

94,00

84,0086,00

82,00

80,0078,00

< us $ 8 2 to 8 us $8 4 to 8 us $8 All

nET EnROllmEnTRATIO InsECunDARYEDuCATIOn 50,00

60,00

70,0080,00

30,0040,00

20,00

10,00-

< us $ 8 2 to 8 us $8 4 to 8 us $8 All

ACCEssTO InTERnET- % Of POPulATIOn

15,00

20,00

25,00

10,00

5,00

-< us $ 8 2 to 8 us $8 4 to 8 us $8 All


50,00

60,00

70,0080,00

30,0040,00

20,00

10,00-

< us $ 8 2 to 8 us $8 4 to 8 us $8 All









mEXICO 2010lAC 2000lAC 2010

mEXICO 2010lAC 2000lAC 2010









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4.4.6. Summary


Mexico enjoys fairly good access to information of the population livingwith less than US $8 per day and the only indicator without informationhas been percentage of population with access to Internet in 2000.

Mexico has experienced a high increase in most of its indicators of ac-cess to development since 2000. The only indicator that has decreasedsince is the percentage of population having formal home ownership(similar to t

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