Measuring poverty: Does a dollar-a-day work?

JOHANNESBURG – One of the rows that preceded last week’s United Nations summit centred around how the global body defines some of the world’s most basic but most intractable problems and what it wants to do about them.

But as world leaders wrangled over whether it is right to retain the ambitious goal of slashing the proportion of people who live on less than US$1 a day by 2015, some academics question whether that measurement itself is relevant. Critics say the US$1-a-day measurement of poverty does not distinguish between the widely different experiences of the poor, which cannot be measured simply by looking at income.”The …fundamental question is whether such statistical propositions as the US$1-a-day-life reflect any reality that real people live in,” asked Canadian philosopher John Ralston Saul in his recently published book ‘The Collapse of Globalism’.”After all, people at US$3 a day could be living a life of pure despair in a savage slum of Lagos, a life far worse than that at US$1 a day in a stable slum like Klong Toey in Bangkok, where there is a societal structure,” he wrote.The goal to reduce the number living on less than US$1 a day by 2015 is enshrined in the Millennium Development Goals, a set of eight specific objectives on poverty, hunger, primary education, AIDS and other issues, agreed at a summit in 2000.In the pre-summit wrangling, the United States said at first it wanted to delete all reference to the words “Millennium Development Goals”.Then it said it would accept the use of the phrase provided it could be “properly defined”.Critics contend that the goals themselves set an objective on poverty that obscures the complexity of the problem and that focusing on the US$1-a-day measure can be misleading.SMOKE AND MIRRORS? The World Bank says the number of people living on less than US$1 a day fell to 1,1 billion in 2001 from 1,5 billion in 1981 – a much trumpeted trend that mostly reflects the economic rise of China and India.But it also says the number living on less than US$2 a day increased to 2,7 billion in 2001 from 2,4 billion in 1981.”The 1,6 billion people in the middle, between the US$1 and US$2 a day poverty lines, are still very poor and remain vulnerable to economic slowdowns,” it said in a recent report.So if the goal posts were moved, and US$2 a day was the benchmark – and it is the preferred measure of some analysts – it would suggest that global poverty is in fact on the rise.”The evolution from the US$1 category to the US$2 category might mean a marginal improvement or nothing at all or a worsening in poverty,” Saul wrote.”What a sensible person would say is that there are no clears signs of progress, and there may be serious slippage, except in India and China,” he added.In its global human development report released on Wednesday, the United Nations Development Programme said another 1,7 billion people could be living on US$2 a day by 2015 if current trends continue.Some observers say the data could signal rising inequality – which may or may not point to an increase in the absolute number of people living in poverty.”In really poor countries, this would not be a good sign as it can point to a deterioration of other social indicators such as health and education and nutrition,” said Carola Gruen, a professor Johannesburg’s University of the Witwatersrand.RELATIVE POVERTY The US$1-a-day figure is referred to as the extreme poverty line and is calculated on a purchasing power parity basis.This method attempts to account for inflation while also measuring the relative purchasing power of different countries’ currencies for the same types of goods and services.But it is difficult to broadly measure the impact of inflation on different income groups whose baskets of commonly purchased goods are not the same, with food a heavy component of expenditure by the world’s poorest.So a person in country A could move well above the US$1-a-day threshold but the additional income could simply be eaten up by a sharp rise in his or her staple food commodity.Africa is the one place where there is a consensus.Everyone agrees it has been getting poorer by just about any definition.Using the US$1-a-day or less measurement, the World Bank says the number of people in Africa living in extreme poverty almost doubled in 20 years, rising to 313 million in 2001 from 164 million in 1981.Recent commitments of increased aid and debt relief, such as those agreed by the world’s leading industrialised nations at a Group of Eight summit in July, have been welcomed.But Africa is still the one major region which is not expected to meet the poverty reduction goal by 2015 – and however one measures poverty, that can only be bad news.”If the Millennium Goals are not achieved by 2015, we will fail to prevent the deaths of hundreds of millions of people from hunger, poverty, AIDS and disease,” the UN Millennium Campaign said last month.”This year alone, 11 million people have died from poverty and ill-health and three million from AIDS.There is no bigger security threat to human lives and no more blatant violation of human rights than this,” it said.- Nampa-ReutersCritics say the US$1-a-day measurement of poverty does not distinguish between the widely different experiences of the poor, which cannot be measured simply by looking at income.”The …fundamental question is whether such statistical propositions as the US$1-a-day-life reflect any reality that real people live in,” asked Canadian philosopher John Ralston Saul in his recently published book ‘The Collapse of Globalism’.”After all, people at US$3 a day could be living a life of pure despair in a savage slum of Lagos, a life far worse than that at US$1 a day in a stable slum like Klong Toey in Bangkok, where there is a societal structure,” he wrote.The goal to reduce the number living on less than US$1 a day by 2015 is enshrined in the Millennium Development Goals, a set of eight specific objectives on poverty, hunger, primary education, AIDS and other issues, agreed at a summit in 2000.In the pre-summit wrangling, the United States said at first it wanted to delete all reference to the words “Millennium Development Goals”.Then it said it would accept the use of the phrase provided it could be “properly defined”.Critics contend that the goals themselves set an objective on poverty that obscures the complexity of the problem and that focusing on the US$1-a-day measure can be misleading.SMOKE AND MIRRORS? The World Bank says the number of people living on less than US$1 a day fell to 1,1 billion in 2001 from 1,5 billion in 1981 – a much trumpeted trend that mostly reflects the economic rise of China and India.But it also says the number living on less than US$2 a day increased to 2,7 billion in 2001 from 2,4 billion in 1981.”The 1,6 billion people in the middle, between the US$1 and US$2 a day poverty lines, are still very poor and remain vulnerable to economic slowdowns,” it said in a recent report.So if the goal posts were moved, and US$2 a day was the benchmark – and it is the preferred measure of some analysts – it would suggest that global poverty is in fact on the rise.”The evolution from the US$1 category to the US$2 category might mean a marginal improvement or nothing at all or a worsening in poverty,” Saul wrote.”What a sensible person would say is that there are no clears signs of progress, and there may be serious slippage, except in India and China,” he added.In its global human development report released on Wednesday, the United Nations Development Programme said another 1,7 billion people could be living on US$2 a day by 2015 if current trends continue.Some observers say the data could signal rising inequality – which may or may not point to an increase in the absolute number of people living in poverty.”In really poor countries, this would not be a good sign as it can point to a deterioration of other social indicators such as health and education and nutrition,” said Carola Gruen, a professor Johannesburg’s University of the Witwatersrand.RELATIVE POVERTY The US$1-a-day figure is referred to as the extreme poverty line and is calculated on a purchasing power parity basis.This method attempts to account for inflation while also measuring the relative purchasing power of different countries’ currencies for the same types of goods and services.But it is difficult to broadly measure the impact of inflation on different income groups whose baskets of commonly purchased goods are not the same, with food a heavy component of expenditure by the world’s poorest.So a person in country A could move well above the US$1-a-day threshold but the additional income could simply be eaten up by a sharp rise in his or her staple food commodity.Africa is the one place where there is a consensus.Everyone agrees it has been getting poorer by just about any definition.Using the US$1-a-day or less measurement, the World Bank says the number of people in Africa living in extreme poverty almost doubled in 20 years, rising to 313 million in 2001 from 164 million in 1981.Recent commitments of increased aid and debt relief, such as those agreed by the world’s leading industrialised nations at a Group of Eight summit in July, have been welcomed.But Africa is still the one major region which is not expected to meet the poverty reduction goal by 2015 – and however one measures poverty, that can only be bad news.”If the Millennium Goals are not achieved by 2015, we will fail to prevent the deaths of hundreds of millions of people from hunger, poverty, AIDS and disease,” the UN Millennium Campaign said last month.”This year alone, 11 million people have died from poverty and ill-health and three million from AIDS.There is no bigger security threat to human lives and no more blatant violation of human rights than this,” it said.- Nampa-Reuters