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Poverty & Inequality

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Poverty Reduction Claims Under Scrutiny
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The World Bank's recent estimates on global poverty, particularly in relation to China, are being challenged by an international non-governmental organisation (NGO) which monitors poverty eradication and gender equality: the 2008 Basic Capabilities Index. By Thalif Deen.


23rd September 08 - Thalif Deen, IPS News

Link to the Basic Capabilities Index 2008

"Significant poverty reduction is happening in Asia, the region that currently concentrates the greatest number of poor people," said Roberto Bissio, coordinator of Social Watch, a network of more than 400 civil society organisations in 70 countries.

But this trend, he argues, was already in place when the U.N.'s Millennium Development Goals (MDGs), which includes a 50 percent reduction in extreme poverty and hunger by 2015, were approved in the year 2000.

"What we are saying is that we do not have the necessary data to state what is happening to poverty in China since 2000," Bissio told IPS. "Yes, there is fast economic growth happening in China, but also a lot of income concentration."

In terms of the access to basic health and education services, though, all evidence points out that this was achieved in China before economic growth started in the eighties, and in fact could even have been one of the reasons for economic growth, not the other way around, he added.

The World Bank's new poverty estimates, released last month, reveal that 1.4 billion people in the developing world (one in four) were living on less than 1.25 dollars per day in 2005, down from 1.9 billion (one in two) in 1981. The current total world population is about 6.0 billion.

"The new numbers show that poverty has been more widespread across the developing world over the past 25 years than previously estimated, but also that there has been strong, if regionally uneven progress, toward reducing overall poverty," the Bank said. According to the United Nations, which concurs with the World Bank, "most of the decline occurred in Eastern Asia, particularly China".

"Other regions have seen much smaller decreases in the poverty rate, and only modest falls in the number of poor," says a new U.N. report on MDGs released in early September.

In sub-Saharan Africa and the Commonwealth of Independent States, the U.N. study said, the number of poor increased between 1990 and 2005.

In a new study released Monday, to mark the upcoming U.N. high level meeting on MDGs Sep. 25, Social Watch said that contrary to repeated mainstream claims that global poverty is diminishing fast, the coverage of the basic needs required to escape poverty is slowing down and even regressing in many places.

The 2008 Basic Capabilities Index (BCI) released by Social Watch says the majority of the planet's population lives in countries with dormant social indicators or which are progressing too slow to reach an acceptable standard of life in the next decade, or for which there is no reliable information.

Progress in basic social indicators slowed down last year all over the world and at the present rate, the index stresses, the internationally agreed poverty reduction goals will not be met by 2015, unless substantial changes occur, it adds.

In Sub-Saharan Africa, for instance, progress in social indicators is extremely slow and, at the current rate, would only reach an acceptable BCI score in the 23rd century, the study notes.

Secretary-General Ban Ki-moon points out that the recent fuel, food and climate crises are already threatening to undermine the MDGs.

"The largely benign development environment that has prevailed since the early years of this decade, and that has contributed to the successes to date, is now threatened," he said last month.

"The economic slowdown will diminish the incomes of the poor; the food crisis will raise the number of hungry people in the world and push millions more into poverty; climate change will have a disproportionate impact on the poor," the secretary-general warned.

Ban said he expects a number of new initiatives to address health, poverty, food and climate change issues, at the upcoming high-level meeting of world leaders.

Asked if most recent estimates on reduced poverty in China are flawed, Bissio told IPS: "The actual trend of poverty in China is difficult to determine."

"We now have, as a result of a credible global survey, the income poverty figures for 2005, but all previous values are mere estimates."

On top of that, in the transition to a market economy, income may grow without people's lives actually changing, he argued.

In the commune system, where millions of peasants were self-sufficient, they now receive a salary, but they also have to pay for the food they used to get free, Bissio said: "In terms of actual food intake nothing changes, but in terms of the formal economy, total income registered increases both with the money they receive and what they pay."

Social Watch is not saying that poverty is not decreasing in China, he pointed out. "It is just saying that the situation is complex and there are not enough data to analyse it."

The World Bank erred by 40 percent in its previous estimates of the size of the economies of China and India, judging them to be much bigger than what the new estimates show, he noted.

Shaida Badiee, director of the Bank's Development Data Group, pointed out that "data are never perfect, though they are getting better over time."

"The World Bank works constantly with partners in developing countries to improve data quality and access to data," she added.


BASIC CAPABILITIES INDEX 2008

22nd September - Social Watch

Contrary to repeated mainstream claims that poverty is diminishing fast in the world, the coverage of the basic needs required to escape poverty is slowing down and even regressing in many places, says the 2008 Basic Capabilities Index (BCI) released today by Social Watch, a network of more than 400 civil society organizations in 70 countries.

Alternative poverty estimates say progress is too slow to achieve the Millennium Development Goals by 2015

The Basic Capabilities Index, made public today by Social Watch states that the majority of the planet’s population lives in countries with dormant social indicators or progressing too slow to reach an acceptable standard of life in the next decade, or for which there is no reliable information. Progress in basic social indicators slowed down last year all over the world and at the present rate –the index stresses- the internationally agreed poverty reduction goals will not be met by 2015, unless substantial changes occur. In Sub-Saharan Africa, for instance, progress in social indicators is extremely slow and, at the current rate, would only reach an acceptable BCI score in the 23rd century.

Out of 176 countries for which a BCI figure is computed, only 21 register noticeable progress in relation to how they were in 2000. Other 55 countries show progress that is slight and slow, while other 77 countries are stagnant.

Setbacks are registered in Central Asia, Latin America, the Caribbean and even in Europe (Georgia), yet the majority of countries which have regressed the most in social development are to be found in Sub-Saharan Africa where they are extremely alarming, since countries in this region were already among the lowest in the index.

A summary index, the BCI provides a consistent general overview of the health status and basic educational performance of each country and is proven to be closely correlated to the measurement of other capabilities related to countries’ social development.

The Basic Capabilities Index is a simple average of three indicators: percentage of children who reach the 5th year of primary education, mortality among children under five, and percentage of child deliveries attended by skilled health personnel. The BCI assigns a score to each country and assesses its evolution over time for those countries for which reliable data are available. Information is insufficient to show trends for 23 countries, of which China is one. As the impact of the food crisis starting in 2006 begins to be registered by incoming statistical data, Social Watch researchers estimate that the situation is likely to worsen in next months.

By not using income as an indicator, the BCI is consistent with a definition of poverty based on capabilities and (the denial of) human rights, thus free from the inaccuracies affecting income-based estimates. Last August 26, the World Bank corrected by almost 50% its estimation of the total number of people living in the world with under one dollar a day, from less than a billion to 1.4 billion.

The BCI has been calculated for 176 countries, which were then grouped into categories. The most alarming realities are to be found in countries with critical BCI scores, followed by those with very low BCI and low BCI. Only 52 countries have BCI value of 98 or 99, which implies almost universal access to basic education and health services. Such a high BCI can only be achieved without malnourishment (of children and their mothers) and when basic housing and sanitation are provided, Social Watch understands a BCI value close to the maximum to be synonymous with the “dignity for all” that the Universal Declaration of Human Rights wants to achieve.

“Such dignity is not the objective of social development”, specified Social Watch’s coordinator Roberto Bissio, “but a necessary starting point to achieve it”.

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