POVERTY & EQUITY NOTES JANUARY 2020 · NUMBER 18 Location matters: welfare among urban and rural poor in Djibouti Gabriel Lara Ibarra and Vibhuti Mendiratta This note presents aspects of welfare of urban and rural poor in Djibouti. With only 15 percent of Djibouti’s population, rural areas host about 45 percent of the country’s poor. As such, these areas require a comprehensive strategy that invests in infrastructure and service provision and better connection to cities. The urban poor are more numerous and concentrated in the Balbala community of the capital. A policy tool kit to promote high quality of public services, better education and employment opportunities for urban poor would be critical. Djibouti is a small lower-middle income Strikingly, about 46 percent of the country’s economy that has recently experienced a period of population resides in Balbala (Figure 1). Another unprecedented economic growth of 35 percent 30 percent of the population resides in the between 2013 and 2016. It is also a highly remaining 3 districts of Djibouti city. About 15 urbanized country. With an area spanning 23,200 percent of the population lives in rural areas while square kilometers, it is divided into five regions (Ali the remaining 9 percent resides in urban areas. Sabieh, Dikhil, Tadjourah, Obock, Arta) and the city of Djibouti, the capital. Djibouti city is further subdivided into 5 districts; the 4th and 5th districts Welfare Differs Across Location in Djibouti city together comprise the area of Balbala 1. There are significant disparities in welfare between the residents of the capital and other Figure 1. Distribution of the population across regions. The estimates for 2017 based on the locations (%) national poverty line (around $2.18 a day 2011 PPP) show that a little more than a fifth of the Djiboutian 15 Djibouti city- population is living in extreme poverty and is 30 districts 1-2-3 unable to cover its basic needs. The extreme 9 Djibouti city- poverty rate in Djibouti city, which is entirely urban, Balbala is estimated at 13.6 percent, while in rural areas, it Urban in regions is more than four times higher at 62.6 percent (Figure 2). Rural areas comprise only 15 percent of Rural the population but are home to 45 percent of the 46 poor population. Another interesting facet of Source: Calculations using EDAM4-IS 2. spatial variation in welfare is that locations further away from the capital and locations hosting a 1 Most of the analysis presented here summarizes key results from a World Bank report entitled “Challenges to Inclusive Growth: a poverty and equity assessment of Djibouti”. 2 EDAM4-IS is Enquete Djiboutienne Aupres des Menages conducted in 2017 by the National Institute of Statistics, Djibouti (INSD). relatively large rural population show higher levels In particular, the educational attainment and job of deprivation. In the capital, disparities are also quality of the household heads of the extreme poor found across districts: the extreme poverty rate in population living in Balbala is similar to those of Balbala community is three times higher than that household heads residing in rural areas. The in the 1st district. The Balbala area in the capital average consumption per capita among the poor accounts for 37 percent of the poor population. in Balbala is much lower than the nonpoor in Balbala and also lower than that in rural areas. Figure 2. Extreme poverty rates, by location 70% But the poor in Djibouti city have better access 60% to public services than rural poor, because they 50% reside in the capital city. About 41 percent of rural 40% poor have access to an improved water source, 10 30% percent have access to sanitation and a mere 3 20% percent have access to electricity. A little more than 10% a third of rural poor households are close (less than 0% 1 km away) to an elementary school and only 10 percent live less than 1 km away from any health Other regions Other urban 1st district Arta 3rd district 4th district 5th district Djibouti city Tadjourah 2nd district Ali Sabieh Dikhil Rural Obock National facility. Compared to the rural poor, poor households in the capital have better coverage rates of water, sanitation, electricity and more Source: Calculations using EDAM4-IS. Note: Line across graph families live close to an elementary school and denotes the national extreme poverty rate. health facility. The urban poor also are more likely to send their children to school. Poor rural households are the most deprived group in the population (Table 1). Showing the The rough arid climate affects inhabitants of highest dependency ratios, they have the lowest rural areas in the face of increased climate participation in the labor force (among individuals change risk, highlighting the importance of aged 15 and above). The heads of rural poor location further. Due to the series of droughts households have very low levels of employment, a that Djibouti has experienced in recent years, the low likelihood of being employed in the public livelihoods of nomadic and pastoralists have come sector, and very low percentage work in formal under threat. This population is thought to have private sector. School enrolment is very low among dwindled substantially with some fleeing to rural poor too. Taking all these elements together, neighboring countries and others practicing it is no surprise that this group has one of the pastoralism becoming sedentary in the outskirts of highest multidimensional deprivation scores 3 of villages and cities. Still in 2017, more than half of 0.83. the population in Tadjourah and Obock practiced some sort of animal husbandry, as did 42, 31 and The poor living in Djibouti city share certain 25 percent of the population in Arta, Ali Sabieh and characteristics with poor living in rural areas. In Dikhil, respectively. Poverty amongst this addition, the former also display characteristics population is much higher than the national rate, similar to the those living in rural areas in general. calling for attention to this vulnerable group. 3 Following the methodology proposed in the Poverty and Shared Prosperity Report 2018 (PSPR 2018), a multidimensional deprivation score is calculated looking at deprivations along 3 dimensions- monetary poverty, education and access to services. The final score ranges from 0 to 1 wherein a score of 1 indicates deprivation on all 3 dimensions and a score 0 indicates no deprivation. Table 1. Characteristics of the population by poverty status and location Non-poor population Extreme poor population Districts Districts Balbala Rural Balbala Rural 1-2-3 1-2-3 Household size 6.1 6.6 4.7 7.6 8.7 5.4 Dependency Ratio* 0.71 0.87 1.08 0.75 0.82 1.35 Average annual consumption per capita (DJF) 323,598 212,859 151,326 69,392 67,669 49,051 Deprivation Score 0.13 0.16 0.44 0.47 0.50 0.83 Individual characteristics Percentage of 6-14yo enrolled in school 84% 87% 69% 70% 79% 53% Percentage of 15+ in labor force 48% 46% 41% 49% 41% 33% Percentage of individuals employed+ 29% 25% 22% 13% 12% 13% Household head characteristics Head has no education 44% 61% 81% 87% 87% 94% Head has at least secondary education 19% 15% 3% 4% 2% 1% Head is employed 57% 61% 41% 31% 42% 26% Head is employed in public sector (as a % of all 43% 48% 45% 32% 46% 27% employed) Head is employed in private formal sector (as a % of all 19% 10% 5% 2% 3% 4% employed) Access to public services Open defecation 2% 1% 44% 12% 12% 77% Appropriate garbage disposal 94% 90% 28% 90% 72% 13% Access to sanitation 36% 33% 2% 21% 31% 1% Access to electricity 90% 68% 10% 59% 18% 3% Access to water 99% 99% 66% 92% 97% 41% Household lives <1 km away from an elementary school 39% 41% 41% 41% 47% 37% Household lives <1 km away from any health facility 26% 25% 15% 28% 29% 10% Source: Calculations using EDAM4-IS. Notes: * Only households with at least one working age (15-64) individual are included. + Includes all individuals 15 years and above. Private sector comprises all branches of activity except public administration and others (international organizations, military bases, and unspecified categories). Within the private sector, employers, contractors and independent workers are considered working in the formal sector when they have accounting records, a trading license (commonly referred to as “patente”) and registration in the chamber of commerce. Within the private sector, salaried individuals, family helpers and apprentices are considered working in the formal sector if the worker has a contract and is registered in social security. All remaining individuals working in the private sector are considered as working in the informal sector. Access to electricity is defined as the use of electricity as the main source of lighting. Access to water is defined as the availability of water in the household in the form of running water (ONEAD indoor connection), direct connection from a borehole, ONEAD outdoor connection, by pipe, public fountain and drilling (with a pump). Appropriate garbage disposal is defined as garbage collector - OVD (public dump), garbage collector - private and deposited in a special place. Access to sanitation is defined as unshared access to a water closet with flush, or latrine with slab. this group. The schools and hospital in these areas Guiding policy are accessible, thus focus would need to be placed on ensuring high quality of service delivery. There is a gap that needs to be filled in understanding Rural and urban poor face a distinct set of how the increased educational attainment reflects concerns, and separate, targeted sets of policies actual learning (Djibouti does not participate in must be considered for each of these internationally comparable testing efforts of subgroups. The urban poor are covered by basic students). Expanding employment opportunities services but have few opportunities for economic will be key to unlocking the potential of the development. The GoD should focus on ensuring Djiboutian population. that human capital accumulation is a priority for January 2020 · Number 18 3 Rural poor require a comprehensive strategy comparison, Djibouti city has all dwellings under that focuses on infrastructure and service one cluster with an estimated density of 293.3 provision. Households in these areas suffer from buildings per km2. Expanding coverage of basic low access to public services such as electricity, services in these areas will therefore require GoD to water, and sanitation. Electricity access—a key find innovative ways to reach the populations in the service that has been shown to stimulate poorest regions. Achieving universal coverage of consumption and income and enable better basic services in rural areas will certainly require education and health—especially needs to be additional resources, but they will have to be addressed, as only 6 percent of the rural population coupled with a well-crafted strategy to reach the has access to it. Meanwhile, open defecation rates neediest in an efficient manner. are high in rural areas, calling for strong investments in sanitation services as well as disease Figure 3. Clusters and density of clusters for management, especially as these areas are also regions outside Djibouti city affected by low coverage of health facilities. Achieving universal coverage of basic services in rural areas is challenging due to the dispersed population and the low population density. We illustrate this by using geospatial data and conducting the following exercise. First, we identify all the buildings in Djibouti using satellite imagery. Second, using these building as proxies for dwelling or inhabited spaces, we created a 1km radius around each dwelling. Third, we create clusters of dwellings to represent inhabited areas, like communities or villages. To build these clusters we draw a 1km radius around each dwelling and then Source: own calculations using geospatial data created by the combine (i.e. create the union) all the radii where World bank. Map is taken from OpenStreetMap. Clusters refer their areas overlap. For instance, if two dwellings to groups of 1km-radius neighborhoods around all buildings identified through a building footprint exercise. Djibouti city are near each other they will form a cluster shaped cluster not shown. like a peanut. And fourth, we calculate the dwelling density (i.e. number of dwellings per km2) for all the clusters identified. Figure 3 shows the results of this ABOUT THE AUTHORS exercise for the 5 regions. In Tadjourah, the region Gabriel Lara Ibarra is a Senior Economist at the with the highest poverty rate and lowest coverage World Bank’s Poverty and Equity Global Practice. rates of certain services, close to 60 percent of glaraibarra@worldbank.org dwellings are in extremely low-density areas (one building per km2) and almost three quarters (73 Vibhuti Mendiratta is an Economist at the World percent) are in very low-density areas (two Bank’s Poverty and Equity Global Practice. buildings or less per km2). Meanwhile in Dikhil, vmendiratta@worldbank.org where extreme poverty is 53 percent, these shares are 77 and 86 percent, respectively. As a This note series is intended to summarize good practices and key policy findings on Poverty-related topics. The views expressed in the notes are those of the authors and do not necessarily reflect those of the World Bank, its board or its member countries. Copies of these notes series are available on www.worldbank.org/poverty January 2020 · Number 18 4