Poverty Analysis in Vanuatu : A Critical Review and Alternative Formulation

This paper examines the most recent analysis of poverty in Vanuatu by the Vanuatu National Statistics Office (VNSO) in 2009 using the Vanuatu 2006 Household Income and Expenditure Survey (HIES). VNSO (2009) comes to the conclusion that the urban incidence of poverty (in Vila and Luganville) is three times higher than rural poverty, a quite implausible result. This paper outlines apparent weaknesses and inconsistencies in the methodology of the VNSO (2009) study, specifically in the construction of the Food Poverty Line (FPL) using a Food Energy Intake (FEI) method, and the multiplier method to obtain the Non- Food Poverty Line (NFPL) and Basic Needs Poverty Line (BNPL) values, which are shown to be largely responsible for the incongruous results for the incidence of poverty and poverty gaps in rural and urban Vanuatu. This paper presents alternative methodologies for the construction of the FPL food baskets, and hence the BNPL values, to be arrived at by consensus amongst local stakeholders in poverty analysis. Given that there has been no social consensus on the appropriate values to use for the BNPL in Vanuatu, this paper presents data in a convenient tabular form so that stakeholders can easily estimate the incidence of poverty in rural and urban Vanuatu using their own choice of values for the FPL and BNPL. The paper explains why the statistics on income distribution given by VNSO (2009) are highly unreliable given the likely serious under-reporting of incomes and expenditures of Chinese and European ethnic minorities