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close this bookNational Experiences with Shelter Delivery for the Poorest Groups (HABITAT, 1994, 140 p.)
close this folderII. HOUSING THE POOR
View the documentA. The case-study countries
View the documentB. National shelter policies
View the documentC. Housing needs
View the documentD. Shelter delivery
View the documentE. Actors and programmes
View the documentF. Financing shelter

A. The case-study countries

The experiences of shelter delivery for the poor in Mexico, Indonesia and India are presented below. The focus is on the following cities: Mexico City, Jalapa, Jakarta, Bandung, Bombay, Calcutta and Delhi. It is evident from table 5 that Mexico is an upper-middle-income country, while Indonesia is a lower-middle-income and India a low-income country. There is, furthermore, a good correlation between the level of economic and social development.

For the purpose of underlining the countries' status as developing countries, the OECD average GNP per capita (at purchasing power parity) is $US 18,000. UNDP (1993), in its categorizing of countries according to their level of “human development”, places Mexico in the high human development group, and Indonesia and India in the middle and low groups respectively. “Absolute urban poverty” is assessed to be 20 per cent of the urban population in Indonesia (rural poverty, 16 per cent). The figures for India are 40 per cent (and 49 per cent). Data are not available for Mexico from the same source. Carmona (1993), estimates that at least 25 per cent of the urban population in Mexico has no or very low incomes, i.e., they are earning one minimum wage or less (one minimum wage was equal to $US 140 monthly income in 1990).

1. Mexico

According to Lombera (1993), research shows that 30 per cent of the Mexican population are extremely poor, i.e., unable to satisfy their nutritional others regarded as too high. By using a wide-ranging definition of basic needs, including cultural and recreational consumption, a very low percentage of the population is not poor. The minimum wage in 1992 constituted only 13 per cent of this “basket of food and services.” The figure a few years back was 38 per cent. Undoubtedly, poverty is rising both in absolute numbers and in the relative sense of an increasing percentage of the population, in rural as well as urban areas. Due probably to rapid urbanization, urban poverty is now increasing more rapidly than rural poverty. Still, the poor constitute a larger proportion of the rural population than they do in urban areas. It may thus be reasonable to assume that the above figure of 30 per cent of food poverty is on the high side for cities. For the present report, it can thus be justified to use 20 per cent of the urban population as an approximate cut-off point for the category “poor”, in a narrow basic needs understanding of the concept.

Table 5. Basic information on the case-study countries

GDP growtha percentage

GNP/capita growtha percentage

GNP
($US)

GNP/capita PPPb
($US)

Gini index

Infant mortality ratec

1980-1991

1980-1991

1991

1990

1980s

1990

Mexico

1.2

-0.5

3,030

5,918

0.50

36

Indonesia

5.6

3.9

610

2,181

0.31

74

India

5.4

3.2

330

1,072

0.42

90

a: Average annual growth
b: Purchasing power parity
c: Per 1000 live births

Sources: The World Bank, 1993b; UNDP, 1993.

Table 6. Percentage of population in Mexico with low income

Income level
(minimum wages)

1960

1970

1977

1987

£ 1

56

39

30

21

1.1 - 2

19

22

25

30

Total

75

61

55

51

Note: The source does not have equivalent data on the level of income of the minimum wage through time. An index gives the following information on the declining real value of the minimum wage: 1970 = 100, 1980 = 109, 1988 = 57, 1989 = 50.

Source: Based on Lombera Gonzalez, 1993.

Table 7. Income levels in Mexico, 1990 (economically-active population)

Income level
(minimum wages)

Monthly income
$US

Share of population



Mexico

Mexico City

Jalapa



Percentage

Cumulative

Percentage

Cumulative

Percentage

Cumulative

No income

-

7

7

1

1

10

10

< 0.5

< 70

7

14

20

21

28

38

0.5- 1

70 - 140

13

27

20

21

28

38

1.1 -2

141 - 280

36

64

42

63

35

73

2.1 - 3

281 - 420

15

79

16

79

12

85

3.1-5

421 - 700

10

89

11

90

8

93

5 +

701 +

12

101

10

100

7

100

Source: Based on Carmona, 1993.

Real wages in Mexico peaked in 1976. After 1982, the economic depression - combined with restrictive monetarist policies - has eroded the living conditions of working people to pre-1970 levels (Connolly, 1990). The real urban minimum wage declined, on average, by 7.1 per cent annually between 1981 and 1989 (Cardoso and Helwege, 1992). In 1990, 27 per cent of the economically-active population had incomes of one minimum wage or less (see table 7). Those with half a minimum wage or less constituted 14 per cent. Furthermore, the 20 per cent of families lowest on the income distribution scale controlled only 4 per cent of the total income. The shelter problem for the poor in Mexico is growing. In addition to lack of housing, there is a downgrading of housing stock. It is estimated that 45 per cent of the housing have a deficient standard. The prices on building materials are very high. The minimum wage rose 21 times in nominal terms between 1974 and 1985, whereas the price of building materials rose 33 times. The inadequacy of basic services is pronounced. There is insecurity of land tenure and the distribution of subsidies favours the non-poor.

2. Indonesia

The Central Bureau of Statistics in Indonesia calculates that poverty affects 21 per cent of the urban population (Yoewono, 1993). The urban poverty line was in 1990 set at Rp. 20,614 per capita and month. This is a non-wide basic-needs definition. During the 1980s the total number of poor people has been fairly constant, giving a substantial decline in the proportion of the population in poverty, according to official figures (see tables 8 and 9). The low-income groups are estimated to comprise 40 per cent of the population (see table 10). This includes also those without any permanent source of income. For the purpose of this report, it makes sense to define the “poor” as the lowest 20 per cent and the “lower-income group” those between 20 and 40 per cent on the income ladder. The relative size of the categories “poor” and “lower-income” in urban areas in Indonesia and Mexico are thus the same.

Table 8. Official poverty line and number of poor in Indonesia

Urban areas

Rural areas

1980

1990

1980

1990

Monthly income (Rp.)

6.831

20,614

4.449

13,925

Population (million)

9.3

9.4

32.8

17.8

1980: $US 1 = Rp. 627
1990: $US 1 = Rp. 1,860

Source: Based on Yoewono, 1993.

Table 9. Poverty in Indonesia (percentage)

Year

Urban areas

Rural areas

Total

1976

39

40

40

1980

29

28

29

1984

23

21

22

1987

20

16

17

1990

17

14

16

Source: Based on Herlianto, 1993.

Table 10. Income levels, Indonesia (1992)

Income group

Percentage of population

Monthly income
(Rp. thousands)

Poor

20

< 100

Lower-income

20

100 - 449

Lower middle

40

450- 1,249

Upper middle

15

1,250 - 3,500

Rich

5

> 3,500

Rp. 2000 = US$ 1

Source: Based on Herlianto, 1993.

The majority of the urban poor in Indonesia live in unserviced so-called kampungs. The Kampung Improvement Programme (KIP) is directed to assist them. The lower-income group, many of whom are the lowest paid government officials, have access to sites-and-services housing. The poor on the other hand, eke out a meagre living through a number of strategies. These are similar for urban slums in most developing countries. They build their shacks on riverbanks, sides of railways, swampy lowlands and pavements. The diets they can afford and the places in which they live, make them prone to most kinds of illness. Yet, the internal variation of living conditions among the poor is great, from utmost destitution to fairly stable livelihoods in community-organized slums.

3. India

In a huge country such as India poverty rates may vary extensively geographically. The proportion of the urban population below a food (balanced diet) poverty line was for instance in Punjab 51 per cent in 1974 (65 per cent in 1964); in Maharashtra 60 per cent (72 per cent in 1964); and in West Bengal 72 per cent (62 per cent in 1964). The overall Indian average was 65 per cent (65 per cent also in 1964) (Rao and Chandrashekar, 1984). According to official figures, there has been a decline in poverty in India generally, from 55 per cent in 1971, to 46 per cent in 1983 and 43 per cent in 1988 (Minhas and others, 1991).

The figure on poverty in urban areas is estimated to be between 30 and 40 per cent of the urban population on average (Ribeiro, 1993). According to Kundu (1993), the Planning Commission is underestimating the level of urban poverty. By aggregating state estimates, he finds that in 1988 the figure was above 35 per cent. There has been a decline from 1971 (46 per cent) to 1988 (38 per cent) of urban poverty proportionally. Pugh (1990) finds that the range in urban poverty in different surveys and studies is from 35 to 45 per cent. The definition of poverty allows only for some essential non-food expenditures. It is thus a narrow basic-needs concept like the one used in this report. Research shows that about 80 per cent of the urban slum population is below the “poverty line.” They use approximately 80 per cent of their income on food alone. Generally, urban households between the 30th and 40th percentiles on the income distribution spend on average 21 per cent on nonfood items. For households in the lower percentiles the figure is lower (Kundu, 1993). The incidence of poverty in urban slums is very high - Indore (68 per cent), Bangalore (73 per cent), Calcutta (89 per cent) and Madras (90 per cent). The figure for Greater Bombay is only 40 per cent. This figure does not include pavement dwellers who are numerous in Bombay. The above data are, unfortunately, from the mid-1980s or earlier. Yet, according to general economic circumstances and trends, substantial changes in the figures are unlikely to have occurred. It should be remembered that the reliability of poverty data is always somewhat questionable. The figures should be taken as indicators of magnitude only.

In sum, the urban poor in India cannot meaningfully be limited to those 20 per cent lowest on the income distribution scale. The discussion on shelter delivery in this report will focus on the 35 per cent with the lowest income, as constituting the poor. This group's range of standard of living will then be comparable to the poor groups (lowest 20 per cent) in Indonesia and Mexico. The lower-income group in India will in this report include those from 35 to 45 per cent on the income scale.

The basic problems of the urban poor in India, as elsewhere, are lack of employment or inadequate income opportunities forcing them into overcrowded and unhygienic areas. These areas lack basic amenities such as sufficient water supply, sanitation facilities and other physical and social infrastructure. The poor are unable to provide themselves with suitable shelter. Housing conditions are today the most visible sign of urban poverty in India, more so than malnutrition and disease.