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The insidiousness of poverty

When the prices of food and oil on the world market eventually peak, and there is no indication that this will happen any time soon, there will be millions more poverty-stricken people, particularly in developing countries – not that this is totally unexpected. In a report released earlier this week, the World Bank said newly available cost-of-living data had revealed that poverty had been more widespread across the developing world over the past 25 years than previously estimated.

“An earlier estimate of poverty—of 985 million living below the former international poverty line of [US] $1 a day in 2004, down from 1.5 billion in 1981—was based on 1993 cost-of-living data which was the best available at the time,” the report said.

“The new poverty numbers, which show that 400 million more people lived below the poverty line in 2005 than earlier thought, are benchmarked to the revised international poverty line of [US] $1.25 a day in 2005 prices. This line is a good standard for assessing extreme poverty because it is the average of the national poverty lines for the world’s poorest 10 to 20 countries.”

The report said that the new estimate was compiled using 675 household surveys based on 1.2 million interviews in 116 developing countries, representing 96% of the developing world. The earlier estimate only took into account 22 countries. However, it noted that the new estimate did not cater for rising food and fuel prices.

Despite this though, the World Bank found that there has been strong, if regionally uneven, progress towards reducing overall poverty. And it added that despite the insidiousness of poverty, the developing world was on track to halve extreme poverty from its 1990 level by 2015, the first of the eight Millennium Development Goals set by the UN.

The report, titled ‘The developing world is poorer than we thought, but no less successful in the fight against poverty,’ by Martin Ravallion, director of the World Bank’s Development Research Group and Shaohua Chen, its senior statistician, said that although the estimated number of poor people has increased, poverty reduction had not decreased. It found that poverty had been declining at the rate of about one percentage point a year, from 52 per cent of the developing world’s population in 1981 to 26 per cent in 2005. However, even at this rate, about a billion people will still live on less than $1.25 a day in 2015.

The World Bank said it revised its poverty line from US$1 a day to US$1.25 a day to take inflation into account. However, because the data are as yet unavailable, the impact of rising food and fuel prices on poor people could not be reflected, although the authors of the report posited that it was likely to be large.

And while in total, extreme poverty would be halved by 2015, there has been/is a massive disparity across regions and within continents as some countries have made remarkable progress while others have slid even further backward. In Asia, for example, poverty has fallen from 80% in 1981 to 18% in 2005 in the eastern region and from 60% to 40% in the southern region. In east Asia, China, the prosperous new kid on the block, has had its number of poor plummet from 835 million in 1981 to 207 million in 2005 after it opened up to Western investment and its coastal regions boomed. In fact, the researchers noted, when the figures are totted up and world poverty reduction is presented as a whole, the reduced figure will be almost exclusively due to China’s miracle turnaround in fortunes. However, the disparity is obvious when one looks at south Asia, which still has the majority of poor people in the world – 595 million – of which 455 million live in India.

In Sub-Saharan Africa, the researchers found, the poverty rate fell from 58% in 1996 to 50% in 2005. Nevertheless, the actual number of poor people almost doubled, from 200 million in 1981 to 380 million in 2005.

This report follows on the heels of another which showed that despite its promises to ramp up assistance to Africa, in the wake of the ‘Make Poverty History’ campaign, the G-8 had actually reduced the amount of financing it has made available to the poverty, war, drought and AIDS-ravaged continent over the past few years. Instead, it is China with its new-found wealth that has been making overtures to some African countries with trade and aid deals.
What reports such as these serve to illustrate is that the success stories, which will always be far and few between, will come about not through debt forgiveness and never-ending aid, but by what individual countries are able to accomplish through get-up-and-go initiatives. Poverty, though, will definitely remain part of the present and the future of our world. Governments and their people can decide how they use such information.

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3 Responses to “The insidiousness of poverty”

michael tannassee
on August 30th, 2008 6:10 pm

….. the last paragraph that is giving some rather mind boggling figures of how the insidiousness of poverty is the buisness of each govt; on the planet and to bware of it’s consequences ! poverty was never lying in wait ,, it was always among us ,, even b4 the roman empire and i dare say much longer than the oldest living civilisatin ,, India ! perhaps no one cared to notice ,, until now,, that the need for skills to keep the human race in tact ,, is not on par ,, with scientific
development,, bcos of poverty ,, skilled labour becomes scarce,, the incumbency to thwart this imbalance is that of each govt,, to keep their ship on course and level keel ,, and to ensure in the face of all probabilities,, that they have a cushion to lessen the impact when required ,, failing which can result in destabilisation ,, chaos ,, mayhem ,, violence and death ! as is the case with the present govt of my country GUYANA ! now that it has bcome clear to the President that agriculture is the mandatory move for the economy ,, those who are asked to “grow more” must first b educated ,, on how to apply the best methods for the largest and healthy yield,,, the first thing tho,, is land preparation ,, where drainage and irrigation bcomes the fundamentals of farming !

[Reply to this]
drumup_change
In reply to the above comment on August 31st, 2008 12:17 am:
………………..every party in power in Guyana do understands that Guyana rich coast land have a problem with irrigation but none of them have ever put a program in place to continously handle Guyana’s Irrigation problem………………false pretenders……………….name a village that you know is not under water when there is heavy down rain fall………….now everybody gets scare when there is heavy rain fall after the great flod of 2005………..

[Reply to this]
Sarkar
on September 2nd, 2008 10:20 am

I am surprised that there are only 2 comments so far. Are the bloggers asleep?
The World Bank is certainly good with figures!!! Have anyone noticed how they are slowly squeezing the UN out of World rebuilding processes?
The UN recently got US $214 million to feed the poor of the world!!!
I wonder how long this will last????? You would want to believe (with all sincerety) that they will use this sum to benefit the POOR. Where will they be buying this food from?? We have an old saying in Guyana… GIVE A MAN A FISH AND HE WILL EAT FOR A DAY, TEACH HIM HOW TO FISH AND HE WILL BE ABLE TO EAT EVERYDAY! This paltry sum can be better spent!!
Now for the real insidiousness. Take a look at the stock markets before pronouncing on some governments, I AM NOT SAYING THAT THE GOVERNMENTS ARE FAULTLESS. THEY ARE EQUALLY TO BLAME.
In the arena of stockmarkets there is a category of bloodsuckers that are called SPECULATORS. These are the people who send prices for commodities and oil beyond the reach of most economies. It is only recently that governments have started to attempt to rein in these PARASITES, The US and Canada are trying along with a few European states, but is the effort put forward serious and clearly defined? I don’t think so!! Governments benefit tremendously from the actions of speculators, their tax collections increase 10 fold at the expense of the poor. I hope SN will do an editorial on the role played by speculators on the stockmarket and its effect on the poor. C’mon Economists, the challenge is OUT!! Explain the role of Speculators.

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