**_Table 1: Social Indicators for Cali and other Colombian cities, 1994 and 1998_**

|_------------------------_|_Un_<br>_1994_<br>_-------------_|_employ_<br>_1998_<br>_----------_|_ment_<br>_Change_<br>_----------------_|_1994_<br>_-------------_|_Inequ_<br>_1998_<br>_--------_|_ality_<sup>_1_</sup><br>_Change_<br>_-----------------_|_Child L_<br>_1994_<br>_-------------_|_abor (_<br>_1998_<br>_----------_|_12 to 16 years)_<br>_Change_<br>_-------------------------_|
|---|---|---|---|---|---|---|---|---|---|
|Bogota|4.9|14.8|+9.9|.55|.54|-0.01|8.1|7.7|-0.4|
|Medellin|8.6|16.7|+8.1|.58|.51|-0.07|7.5|6.6|-0.9|
|Cali|11.3|19.7|+8.4|.51|.54|+0.03|7.9|9.1|+1.2|
|Barranquilla|10.1|13.0|+2.9|.76|.57|-0.19|6.1|5.9|-0.2|
|Bucaramanga|8.0|15.9|+7.9|.48|.48|0|15.8|14.9|-0.9|
|Total Urban<br>------------------------|7.4<br>-------------|15.7<br>----------|+8.3<br>----------------|.58<br>-------------|.55<br>--------|-0.03<br>-----------------|8.2<br>-------------|8.4<br>---------|+0.2<br>------------------------|
|<br>1<br>Ineq|<br>uality is d|<br>efined|<br>by the Gini c|<br>oefficient|<br>|||||
|Source:<br>San|tamaria (|1999) b|ased on Enc|uesta Na|cional|de Hogares|by DANE.|||

Poverty and misery increased strongly from 1994 to 1998. According to an evaluation of the National Household Surveys from June 1994 and 1998, Urrea and Ortiz (1999, p.22-24) find that poverty in the city increased from 29.8% to 39.0%<sup>3</sup> while the percentage of the city population in misery – defined as not even able to purchase a basic basket of food – doubled and rose from 5.3 percent to 10 percent. In 1998, more than 800,000 people lived in poverty in the city and more than 200,000 in misery.

**_Table 2: Poverty and Misery in Cali, 1994 and 1998_**

|----------|----------------------------------------------|1994<br>-------------------|1998<br>-----------------------|
|---|---|---|---|
|<br>poverty|<br>|||
||headcount rate (%)<br>absolute number (‘000)|29.8<br>571|39.0<br>807|
|misery||||
||headcount rate (%)|5.3|10.0|
|----------|absolute number (‘000)<br>----------------------------------------------|101<br>-------------------|207<br>----------------------|
|<br>Source|<br>: Urrea and Ortiz (1999, p.22-23).|||

Against this background, Cali launched a new effort to formulate a city development strategy in 1999.<sup>4</sup> Regarding the goal of policy makers to reduce poverty in the city, a number of key questions emerged which needed to be answered in the run-up to such strategy formulation:

> 3 Urrea and Ortiz (1999) use the nationally defined poverty line from the Colombian statistical institute DANE.

> 4 This was one in a continuum of efforts of the city to define it’s long-term development plan.  For example, the city’s development plan (1998 to 2010) made social investment and citizen’s participation priorities in the local management agenda, with the explicit objectives of achieving equal access to opportunities for the integral development of the population.  Departmental plans for the period 1998 to 2001 set out specific targets and goals for education, health, housing and social welfare.    Within the investment plan, one project stood out: the metro.  The light rail system was estimated to cost US$707 million (municipal costs would have been 31.5 percent; national government costs 68.5 percent).

5