Multidimensional poverty in Latin America and the Caribbean: trends and projections prior to the COVID-19 pandemic

16 June, 2021

By Héctor Moreno (OPHI Research Officer) and Mónica Pinilla-Roncancio (OPHI Director of Outreach)

The repercussions of the current COVID-19 pandemic are presented to us daily in multiple ways. The adverse social effects of the crisis are chief among these and have already disrupted many aspects of poverty reduction. Against this new backdrop, an OPHI Briefing analyses recent trends and projections of multidimensional poverty in Latin American and Caribbean (LAC) countries.

The analysis is based on the best available information prior to the emergence of this health crisis. This type of information reveals a clear and progressive trend in the reduction of multidimensional poverty for most countries in the region. This diagnosis can be the starting point for mapping out the necessary path towards an inclusive post-pandemic reconstruction.

The recent picture of pre-pandemic multidimensional poverty

The global Multidimensional Poverty Index (MPI) is a useful tool to get back on track for poverty reduction in the region. The most recent calculation of the global Multidimensional Poverty Index (MPI) provides information on 107 countries worldwide. In the case of Latin America and the Caribbean, this measure is available for 21 countries. This index reflects the multiple deprivations of those who cannot achieve minimum levels in the dimensions of health, education, and living standards.

Currently, the 21 LAC countries included in the global MPI are home to 38 million people who lived in multidimensional poverty (pre-pandemic), representing 7.2% of the regional population. It is important to bear in mind that this percentage refers to acute poverty, using an internationally comparable measure. In the same terms, the region contributed 9.1% to global poverty.

Before the pandemic, the incidence of multidimensional poverty in the region was already quite heterogeneous. Haiti had the highest incidence with 41.3% of its population being multidimensionally poor, based on the DHS 2016–2017 survey. Guatemala had the next highest incidence of 28.9% based on the DHS 2014–2015 survey.

This diagnosis can be the starting point for mapping out the necessary path towards an inclusive post-pandemic reconstruction.

In contrast, the two countries with the lowest incidence were Cuba (0.4%), and Trinidad and Tobago (0.6%). The vast majority of countries had an incidence of MPI below the regional average of 7.1%, which was similar to the incidence observed in Peru (7.4%). El Salvador, Nicaragua, Honduras, Bolivia, Guatemala and Haiti had an incidence above the regional average.


Recent trends prior to the pandemic

Trends in poverty reduction show that poverty reduction is feasible despite the high and widespread levels of poverty that have characterised the region.

In fact, these trends show three important features for LAC:

1. The poorest countries in the region showed the largest reductions in poverty in recent years, with the data available for each country.

2. Rural areas recorded the largest decreases in terms of multidimensional poverty.

3. Some of the traditionally poorest subnational regions had significant reductions (ten of them with reductions of at least 4 percentage points per year in the proportion of people).


Vulnerability and risk factors

We also analysed the proportion of the population at risk of becoming infected with the SARS-Cov2 virus. Following Alkire, Dirksen, Nogales and Oldiges (2020), this vulnerability measure considers the population experiencing simultaneous deprivations in key indicators in the global MPI (that may lead to a more acute case of the disease): nutrition, access to safe drinking water, and type of cooking fuel.

The analysis distinguishes between two degrees of risk: 1) people who are at ‘risk’ if they are deprived in at least one of these indicators; and 2) people who are at ‘high risk’ if they are deprived in all three indicators simultaneously.

Overall, the results confirm that the LAC region has a very uneven distribution of vulnerability to the pandemic according to the global MPI. The percentage of poor people who are at ‘high risk’ from COVID-19 ranges from 1.2% to 41.2% in the countries of the region. This population faces simultaneous vulnerabilities in key indicators that may lead to a more acute course of the disease.

Projections based on pre-pandemic data

Poverty reduction trends prior to the current COVID-19 pandemic suggest that all countries in the region were already on track to halve multidimensional poverty by 2030 if pre-pandemic trends were to continue. This means that the region as a whole was clearly on track to meet the goal set by Target 1.2 of the Sustainable Development Goals (SDGs).

To complement this scenario, Alkire, Nogales, Quinn and Suppa (2020) used the global MPI and simulation techniques in 75 countries around the world to determine the impact of the current pandemic on poverty.

Their results confirm that the current COVID-19 pandemic has disrupted progress in global poverty reduction, with a potential reversal in multidimensional poverty reduction of about 3–9 years. These trends are only available at the global level, yet they are useful to illustrate the potential effects in the region.

The case of Haiti

The case of Haiti is a clear example to illustrate that poverty reduction is feasible, despite high and widespread initial levels of poverty.

On the one hand, Haiti was the country with the highest incidence of multidimensional poverty in the LAC region, according to the most up-to-date data (2016/17), and is home to the poorest subnational region in LAC (Grand’Anse).

However, Haiti shows some of the largest reductions in multidimensional poverty, and had the most encouraging projections for reduction by 2030 (if observed trends were to continue).

Hope for the future

To summarise, according to the projections reviewed, and in line with Target 1.2 of the SDGs, most LAC countries would have halved multidimensional poverty levels between 2015 and 2030 if the trends observed prior to the pandemic had been maintained.

Therefore, the region was on track to halve the MPI by 2030.

The case of Haiti is just one example, but other useful lessons can come from countries such as Honduras, Bolivia and Nicaragua, which were also on track to reduce their MPI by more than 50% between 2015 and 2030.

The information analysed constitutes a minimum reference horizon for resuming the path to recovery.



This article was published in Dimensions 12



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