Poverty Lines in Greater Cairo: Under-estimating and Misrepresenting Poverty

The way in which poverty is defined and measured influences who is considered as poor, how the state responds and how successful the state responses are judged to be. As this paper shows, if the definition is incorrect or based on inaccurate data, the scale and nature of poverty can be greatly underestimated. This paper engages with the global debate about the validity and reliability of income-based poverty lines by examining their use in Egypt in relation to the reality of the lives of the urban poor in Greater Cairo. It reviews the accuracy of Egypt’s various poverty lines, and the data which inform them, and then questions their validity in relation to the real costs of basic food and non-food needs in eight of Greater Cairo’s informal areas in 2008. The paper concludes that the incidence of poverty is considerably underestimated in Greater Cairo. This is because poverty lines are set too low in relation to the costs of even the most basic of needs, and because the household survey data that inform poverty line studies under-sample people living in informal settlements (and under-count the populations of informal settlements).

The paper is divided into four main sections. Section 1 reviews the literature about poverty lines and their weaknesses, especially in urban contexts. This includes a discussion of the inaccuracies of povery lines used in Egypt; according to one widely used poverty line, only 2 per cent of Egypt’s population were “poor” in 2004, which is in stark contrast to the millions of people living in Egypt’s urban slums and informal settlements and the scale of poverty in Egypt’s rural areas. Section 2 assesses what poverty line studies tell us about poverty in Greater Cairo. Different studies (and data sources) produce different and, at times, contradictory conclusions about the scale and distribution of poverty and about trends in poverty incidence over time. Section 3 discusses the flaws in the data on which poverty line studies draw, including how slum populations are undercounted, and the inconsistencies between statistics provided by different authorities. Section 4 questions the validity of various recent poverty lines in relation to the costs and conditions of living in eight of Greater Cairo’s informal settlements. Costs of food and non-food needs in these settlements are assessed and compared with the poverty lines (which are supposed to indicate the income needed to afford these food and non-food needs). The methodology used to calculate the food allowance in poverty lines makes inadequate allowance for the real costs of food. Poverty lines do not make sufficient allowance for housing costs (half of the households living in slums and informal settlements rent accommodation), keeping children at school, transport (for income earners and students) and health care. Raising the value of poverty lines to adequately reflect these costs would considerably increase the incidence of poverty in Greater Cairo. Meeting non-food needs could cost a family of five more than five times the allowance for non-food needs in the lower poverty line and nearly three times the allowance for non-food needs in the upper poverty line.