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Poverty & Inequality

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What is the Reality of Global Poverty?
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A new measure of global poverty suggests that 1.7 billion people live in 'multidimensional poverty', far more than the World Bank's conservative estimates, while others suggest that the number of those in relative poverty could possibly be 4 billion and rising. Does this mean that global poverty reduction is a political myth?

More of world's poor live in India than in all sub-Saharan Africa, says study - The Guardian

Is Global Poverty Reduction a Political Myth? - IPS News

Link to the Oxford Poverty & Human Development Initiative

More of world's poor live in India than in all sub-Saharan Africa, says study

14th July 2010 - Jason Burke, The Guardian

There are more poor people in eight states of India than in the 26 countries of sub-Saharan Africa, a study reveals today.

More than 410 million people live in poverty in the Indian states, including Bihar, Uttar Pradesh and West Bengal, researchers at Oxford University found. The "intensity" of the poverty in parts of India is equal to, if not worse than, that in Africa.

When the vast central Indian Madhya Pradesh state, which has a population of 70 million, was compared with the Democratic Republic of the Congo, the war-racked African state of 62 million inhabitants, the two were found to have near-identical levels of poverty.

The study is based on an innovatory "multidimensional poverty index", or MPI, developed by specialists at Oxford. To be used for the first time in the authoritative and influential United Nations Human Development Report when it is published this autumn, it will replace a simpler method of calculating poverty introduced over a decade ago.

The index uses 10 major variables including access to good cooking fuel, schooling, electricity, nutrition and sanitation. "[It] is like a high-resolution lens which reveals a vivid spectrum of challenges facing the poorest households," said Dr Sabina Alkire, director of the Oxford Poverty and Human Development Initiative and a co-developer of the index. "Before, you might know a person was poor but did not know if their children went to school, if they had a floor or if they cooked on wood."

The survey found that in Madhya Pradesh poverty levels were higher because of malnutrition. In Congo, access to schooling was a problem.

The study's conclusions will reinforce claims that distribution of the wealth generated by India's rapid economic growth – recently around 10% year on year – is deeply unequal. The prime minister, Manmohan Singh, has repeatedly said he wants to see "inclusive" development.

Poverty has long proved difficult to define. The World Bank bases its definition on household income and estimates that a quarter of the developing world lives on $1.25 (85p) a day or less. However, relying simply on money "excludes everything that is outside the cash economy and doesn't look at issues such as housing [or] access to safe water" said William Orme, a spokesman for the United Nations Development Programme in New York. "The new index gives us a much fuller portrait."

To compile the index, researchers analysed data from 104 countries with a combined population of 5.2 billion, 78% of the world total. About 1.7 billion – a third - live in multidimensional poverty, they found. This is 400 million more than are estimated by the World Bank to be in "extreme" poverty. The new index is also designed to track variations within countries much better. So while the poverty rate is more than 80% in the rural state of Bihar, it is about 16% in the southern state of Kerala.

Some countries have dropped steeply down the poverty rankings in the new list. Turkey, Egypt, Pakistan and Morocco were found to have much more poverty under the new index than when using simple household income. Others, such as Tanzania, Nicaragua, Uzbekistan, Vietnam and China were found to have less. China was ranked 46 out of 104, three places behind Brazil. India came in 63rd, just after Togo but ahead of Haiti.

"In many cases, it is probably linked to previously high levels of social investment," Alkire said. "It shows that a low per capita GDP income doesn't necessarily mean high poverty."A second index to gauge poverty in developed nations is now planned.

Link to original source

Is Global Poverty Reduction a Political Myth?

13th July 2010 - Thalif Deen, IPS News

When the United Nations hosts a summit meeting of world leaders next September to assess the current state of its Millennium Development Goals (MDGs), it is expected to single out one of the major "success stories" of the day: a reduction in global poverty.

But have there been any real, significant successes in the absolute number of people worldwide who have escaped poverty?

The United Nations is convinced the developing world as a whole remains on track to achieve the poverty reduction target (a 50 percent cut) by 2015. But the numbers may belie that.

At the global level, the number of people living under the international poverty line of less than 1.25 dollars a day declined from 1.9 billion to 1.4 billion: a reduction of about 500 million people.

The argument by most critics is that these figures are distorted because the successes are mostly in a few countries, primarily China, Vietnam and Brazil, and to a lesser extent, India.

China and Vietnam account for the largest reductions in the poverty rate, and India accounts for much of the reduction in South Asia, according to the latest international assessment released by the U.N. Development Programme (UNDP).

And the decline in absolute poverty levels in Latin America and the Caribbean - another so-called "success story" - is largely accounted for by Brazil.

According to the Brazilian Institute of Applied Economic Research, Brazil has exceeded the MDG target to cut extreme poverty by half by 2015: between 1990 and 2008, the number of Brazilians in extreme poverty has been reduced by 81 percent.

If so, is the reduction in "global poverty" a political myth?

Asked for his comments, Rob Vos, director of the Development Policy and Analysis Division at the U.N.'s Department of Economic and Social Affairs (UN-DESA), told IPS: "It is true that most of the poverty reduction comes on account of China - when measured in absolute numbers."

According to the data presented in the U.N.'s World Economic and Social Survey, the total number of poor in the world decreased from 1.9 billion in 1981 to 1.4 billion in 2005, when the last international survey was conducted.

In China alone, he said, the number of poor decreased from 835.1 million in 1981 to 207.7 million in 2005, which meant a sharp decrease of China's poverty rate, from 84.0 to 15.9 percent.

In Vietnam, the decrease in the poverty rate over the same period was staggering: from 90.4 to 17.1 percent, and much progress was made in much of East Asia, said Vos.

"India's contribution to global poverty reduction has been less impressive," he added.

In South Asia as a whole, he pointed out, the absolute number of poor increased from 548 million to 596 million during 1981-2005.

As a share of the population, South Asia's poverty rate did fall - from 59.4 percent in 1981 to 40.3 percent in 2005 - but because of population growth it was not enough to stop the increase in the number of poor, Vos argued.

A reduction of 50 percent "in extreme poverty and hunger" is the first of the MDGs, which also include universal primary education; promotion of gender equality; reduction of child mortality by two-thirds; cutbacks in maternal mortality by three-quarters; combating the spread of HIV/AIDS, malaria and other diseases; ensuring environmental sustainability; and developing a North-South global partnership for development.

A summit meeting of 189 world leaders in September 2000 pledged to meet all of these goals by the year 2015.

The upcoming MDG summit, scheduled to take place in New York Sep. 20-22, will be attended by 192 member states, mostly represented by heads of state or heads of government. They are expected to adopt a plan of action to accelerate the progress towards meeting the eight goals by the deadline.

Asked about MDG poverty reduction in the context of China, Dean Baker, co-director of the Washington-based Center for Economic and Policy Research, told IPS: "I don't know that there is any distortion."

Still, he said, China has made enormous economic progress in the last three decades and it has benefited much of its population. The situation elsewhere in Asia, he pointed out, is much more mixed, with some countries, such as Bangladesh, not faring very well.

"Africa has generally performed very poorly and Latin America is a mixed bag," he said.

"Certainly the 00s were better than the 90s. So, I think it is important what has taken place in China in terms of reducing poverty - although they certainly did not follow a neo-liberal model - but much of the rest of the developing world has not done very well," said Baker, author of 'Taking Economics Seriously'.

Roberto Bissio of the Social Watch international network is sceptical about the figures. He said the World Bank is not only systematically underestimating poverty in the world - perhaps to show some degree of success, since it claims to be an institution fighting poverty - but is also hiding it under the shadow of China to conceal the evidence. [see box below].

Vos of UN-DESA admitted that the least progress has been made in sub-Saharan Africa.

"In the world's poorest region, the absolute number of the poor increased over the past three decades: the number of people living on less than 1.25 dollars per day increased from 212 million to 388 million people," he noted.

As a share of the total population, the poverty rate remained almost unchanged in the region.

"As with any aggregate number, just looking at global poverty may hide large differences," Vos told IPS.

"There has been enormous success in reducing poverty, but we have seen a lot of it in some parts of the world and very little elsewhere," he declared. 

Box: Fuzzy Math

If you take a second look at the figures, which are the World Bank's revised estimates of people living under the poverty line of 1.25 dollars a day, says Roberto Bissio of Social Watch, "What we have is that world poverty (including China) decreased by 500 million (1.9 billion minus 1.4 billion)."

Yet, according to those same figures, poverty in China decreased by 627 million (835.7 minus 207.7).

That means that, outside China, poverty increased in that period by more than 127 million people.

And those figures refer to 2005, when an international survey on household incomes was conducted that allowed the establishment of the PPP (Parity Purchasing Power of the different national currencies, used to adjust the poverty line).

Since 2005, according to the World Bank, the food crisis and the global financial crisis have sent at least another 100 million people under the poverty line, Bissio pointed out.

"Thus, it is just a spin to convince the naive that MDG Goal 1 is being met, while the same figures show that poverty is increasing around the world, with the exception of China," he told IPS.

If you take other poverty lines - two or three dollars per day, or even better, national poverty lines based on the needs and means of each country - the actual number of people living in poverty around the world might well be some 4.0 billion, an absolute majority of the world population, and not just the bottom billion, he argued.

"It is high time we faced the truth," Bissio said.