Last week Mayor Michael Bloomberg traveled to Mexico City, Tepoztlan, and Toluca to view their premier anti-poverty program, named Oportunidades. Bloomberg is launching a similar conditional cash-transfer system in New York, aimed at keeping lower income kids in school by providing aid to their families.
In Mexico, this program began under the Zedillo administration in the mid 1990s as Progresa, and was continued and expanded under President Fox (renamed Oportunidades in 2002) and continues now under President Calderon. With proof of school attendance and regular doctor’s visits, families (specifically mothers) receive cash benefits, roughly US$18 a month. This program reaches some 5 million households and an estimated 25 million individuals. In fact, it is now the largest anti-poverty program in Mexico. It has achieved some success, as studies attribute a 5% decline in poverty rates to the program. This type of conditional cash transfer program is popular in other parts of Latin America as well. Brazil’s Bolsa Familia are prominent examples with similar formats.
The goal of Oportunidades “ and presumably its offshoot in New York is not just to alleviate immediate poverty but also to increase the education and health of today’s youngsters and tomorrow’s adults. In the words of development economists, it is to increase human capital, better enabling these individuals and Mexico in general to compete in a globalizing world.
But this larger goal will depend on broader reforms to the economy and particularly to Mexico’s education system. While kids may stay in school due to Oportunidades, without educational reform their time will not be used effectively. And, these anti-poverty programs can not solve the underlying and severe economic inequality and limited domestic opportunities for the working and lower classes. This type of anti-poverty program is only a first step. The more important and harder step for Mexico will be to overhaul its education system and to open up its economy, providing real skills and greater opportunities to individuals within the working and lower classes.