Poverty
That failure has not been across the board. There has been progress. According to the most recent Human Development Report 2003, ‘the past 30 years saw dramatic improvements in the developing world. Life expectancy increased by eight years. Illiteracy was cut nearly in half, to 25%. And in East Asia the number of people surviving on less than a day was almost halved just in the 1990s.’ But the report continues: ‘Still, human development is proceeding too slowly. For many countries the 1990s were a decade of despair.’ [UNDP, 2003, 2] More than fifty countries are poorer now than in 1990. In over 20 countries a larger proportion of people are going hungry. In quite a few countries child mortality is increasing, life expectancy is falling, and school enrolments are shrinking. The authors of the report do not hesitate to speak of a ‘development crisis’ and of ‘reversals in survival … previously rare’. [UNDP, 2003, 2] In more than twenty countries the Human Development Index declined, an alarming phenomenon because – as the authors point out – the capabilities captured by the index are not easily lost.
This means three things. First: in some places there has been progress. Development has worked. Second: in others, there has been regress. In those countries, either development policies have not worked, the countries have not been affected by international economic growth, or they have been affected, but differently: as victims of progress elsewhere, as ‘collateral damage’. Third: global inequality has increased. In regions experiencing regress this could mean that people fall below any decent level of living, slip through any safety net, lose any capacity to catch up later, lose their dignity as human beings. Indeed, that would be a crisis, a crisis in development, a crisis in societies. In so far as it would be due to the inherently dualistic character of the global economy, whereby large parts of the world’s population are condemned to poverty and despair, it would also be a crisis in world society.1
Is this too gloomy? According to the World Bank, less than 1.2 billion people now live on or less a day, compared to 1.3 billion a decade ago. [WORLD BANK, 2002a]2. Is that a reason for optimism? Yes and no. Yes, because it shows that high economic growth can lead to less poverty: the fall in the poverty figure was largely due to developments in China, where annual economic growth was 9% in the 1990s, lifting 150 million people out of poverty. No, because excluding China the overall figure increased, from somewhat more than 900 million to about 950 million people. That is a relative decrease, from less than 30% of the population of the developing countries as a whole to less than a quarter. Is that progress? It depends. In Sub-Saharan Africa the figure increased substantially, by 30% in only a decade. In South Asia it is still around half a billion people. That is disappointingly high, four decades after the beginning of coordinated national and international strategies for growth, development and poverty reduction.
In many parts of the world poverty is high and increasing, despite the fact that the 1990s saw the highest annual world average growth figures since the end of the Second World War and decolonisation. Clearly the vast accumulations of income and wealth have not been used for sustainable poverty reduction. During the last decade of the previous century an alarmingly high number of people suffered from worsening living conditions, notwithstanding political promises made at the beginning of that decade. In 1992 in Rio de Janeiro, at another global summit – the United Nations Conference on Environment and Development (UNCED) – world leaders came together to pledge adherence to a new development paradigm: sustainable development. Heads of State and Government, by adopting the new principles and policy programmes contained in Agenda 21, declared that in the future the world’s resources would be utilised in such a way that people would be at the centre and that future generations would not be deprived of the same opportunities as present generations. [United Nations, 1992] Ten years later we can only conclude that the ‘sustainable development decade’ of the nineties – the UN Fourth Development Decade – was less successful than the First Development Decade of the 1960s.
However, conventional wisdom is that poverty is on its way out, because the number of people on less than a day is decreasing. However, what is the significance of the a day criterion, which has found its way into the Millennium Development Goals? The authors of the Human Development Report do not take a position on this. They refer to critics who think that this yardstick ‘reveals little about income poverty and its trends’, but note that others call it ‘rough but reasonable’. I belong to the second group in that I believe it is of course necessary to have some global yardstick. But the a day yardstick is rough beyond reason. Why not, say, one and a half or two dollars a day? Are people who no longer figure in the poverty statistics, because they now earn one dollar a day, out of poverty for good?
As questionable as estimates of the poverty line itself are estimates of the number of people living on or below it. What about the people who did not even reach this level because they died, due to poverty, shortly after birth or at least far below the average life expectancy level enjoyed by others? Their numbers do not even reach the income statistics. Nor did they in the past, which means that these statistics alone cannot shed light on historical comparisons of income poverty. At present, annual poverty-related deaths run into dozens of millions. Such a figure would add substantially to an annual stock figure of poor people at any particular moment of time. One sign of progress is that, since the 1960s, maternal death and infant and child mortality – strong indicators of poverty – have decreased and that life expectancy has increased. But this is by no means true everywhere and the trend seems to be turning again: AIDS kills poor people in particular. In some countries, previously rising life expectancies have been reversed – sometimes by as much as a third – and have dropped back to pre-1980 levels. At present, children in southern Africa can expect to live shorter lives than their grandparents. [United Nations, 2002c, 8]
What is the significance of the concept of income poverty anyway? Poverty cannot be captured in terms of money and income alone. If poverty is seen as a lack of opportunity to acquire lasting control of resources in order to strengthen one’s capacity to acquire the basic necessities of life – water, energy, food, a safe place to eat, rest, sleep, wash, have sex and go to school, basic health services and medicine in case of illness, a job enabling all this or the income to acquire it by means of exchange, access to economic markets and social networks, knowledge to survive in this world, information and education to acquire more knowledge and to gain the necessary insights to cope with disasters, threats, violence and challenges and, when that is beyond the capacity of the individual, some protection – all that requires more than money, more than an income. It requires assets or entitlements, the value of which cannot be easily estimated in money terms. In other words: rights that ensure access to all these things.3 Rights that certainly cannot be acquired for a day.
Income poverty is only an indirect indicator of human poverty.4 Other indicators reveal that there is more stagnation in the battle against poverty than we would expect by looking at the a day yardstick only. Some examples: every day 800 million people go hungry. During the last decade the number of hungry people fell in China, but it increased in 25 other countries. [UNDP, 2003, 88] One out of every six children of primary school age in developing countries does not attend school, and only half of those who do start primary school finish it. Close to 900 million adults cannot read or write, one out of four adults in the developing world. [UNDP, 2003, 92] In Sub-Saharan Africa one in every hundred live births results in the mother’s death. In many countries the already high maternal mortality figures are on the rise. HIV/AIDS, tuberculosis and malaria are killing more people than a decade ago. [UNDP, 2003, 97] More than 1.2 billon people do not have access to safe drinking water, while 2.4 billion people do not have adequate sanitation services. [United Nations, 2002b, 7] In the words of one of the participants at this year’s World Water Forum in Kyoto: more than one third of the world’s population does not have a place to shit. In more formal terminology: they defecate in open areas or use unsanitary bucket latrines. The consequences? Diarrhoea is the world’s greatest killer of children and half of the world’s hospital beds are occupied by patients suffering from easily preventable water-borne diseases. [United Nations, 2002b, 7]
One of these indicators has been labelled in the Human Development Report a ‘shameful failure of development’. [UNDP, 2003, 97] In fact all of them are. The world as a whole has never been as rich as it is today. In the past fifteen years globalisation has accelerated without precedent. The opportunities offered by money, capital, technology and communication to enable more and more people to benefit from progress are without precedent. But these opportunities have not been used to correct this shameful failure of the past and bridge the gap between those who benefit from modernity and those without entitlements enabling them to break out of the vicious circle of malnutrition, disease, illiteracy and poverty. On the contrary: if present trends regarding the nature of globalisation continue – and there are no indications to the contrary – progress and modernity will not bridge that gap, but widen it further.
Unlike Reddy and Pogge in their recent ‘How Not To Count The Poor’ [Reddy and Pogge, 2003] I do not criticise the usual poverty yardstick because of measurement difficulties. Statistical methods of measuring income levels and comparing them between countries and over time can be criticised, but there is no reason to suspect that they have been used to influence political decisions. My criticism of the a day yardstick is not so much statistical or conceptual as political. The figures and statistics concerned have been published and quoted so often that politicians, policymakers, public opinion and world leaders have been led to believe that the trend was in the right direction. However, there is a large difference between theory and practice, between the statistics showing a decrease in the number of people below the poverty line and the realities of misery. That reality has been put out of sight. During the 1990s the degree and extent of world poverty were played down and political leaders were lulled to sleep.5 Were they fooled, or were they fooling themselves by not asking the obvious question: what kind of life can you live on a day anywhere, in Africa, Asia, in the cities of Latin America, or even in China? Has that question not been raised because of the fear that a more ambitious goal, affecting more poor people, could never be attained without far-reaching changes in the distribution of world income and entitlements, while the level would only require better governance in the poor countries themselves and a slight increase in development aid?6 The blame for not meeting a a day target level could easily be apportioned to the poor countries themselves, while failing to reach a more civilised goal could be attributable to the richer countries and their reluctance to share with the poor.
Though in terms of macro world statistics – that is, in theory – fewer people now live below a poverty line which has been selected on political grounds, in practice poverty has increased in many regions of the world and also in many countries where there has been improvement in macro terms. That can only imply that inequalities have widened. And indeed, that is what has happened: inequality across the world increased during the last part of the previous century, between as well as within nations. The distribution of income among the people of the world, regardless of national borders, has become more unequal. Nowadays incomes are distributed more unequally among the global population than in the most unequal countries. [UNDP, 2003, 39]7 Since the First Development Decade inequality has only increased: while in 1960 the top 20% received 30 times the income of the poorest 20%, at the turn of the millennium this inequality had widened to more than 70 to 1.8 In a recent address to this Institute, UNCTAD Secretary-General Rubens Ricupero, quoting a paper by Baker and Nordin [Baker and Nordin, 1999], foresaw a global quintile disparity of even 150 to 1 ‘… fraught with risks for rich and poor alike.’ [Ricupero, 1999, 6/10]
This is nothing new for an ISS audience. Since Graham Pyatt’s address on ‘Poverty against the Poor’, Ricupero, Sandro Sideri, Bas de Gaay Fortman, Hans Opschoor, Mansoob Murshed, Rob Vos and others have highlighted the economic, social, environmental and legal dimensions of the relation between dire poverty and worsening income distribution. [Pyatt, 1999] [Ricupero, 1999] [de Gaay Fortman, 2002] [Opschoor, 2003] [Murshed, 2003] [Vos, 2003] The message has been clearly heard in this hall. Why am I adding my voice? Because there is such a difference between the irrefutable facts about poverty and inequality and the political answers.
‘Poverty: declining, but still a challenge’. That has been the general message during the last decade, explicitly repeated in the most recent World Development Report from the World Bank. [World Bank, 2003b, 2] The political meaning of such a message is: we are moving in the right direction and we should continue to do so, albeit somewhat faster. However, the direction is wrong. Since 1990 the trend has been negative. The authors of the Human Development Report say this in no uncertain terms: ‘What is most striking is the extent of the stagnation and reversals – not seen in previous decades. … (T)he 1990s saw unprecedented stagnation and deterioration. … Per capita incomes fell in 54 countries … Hunger increased in 21 countries … Child mortality rates increased … in a way not seen in previous decades …’ [UNDP, 2003, 40/44]
This means three things. First: in some places there has been progress. Development has worked. Second: in others, there has been regress. In those countries, either development policies have not worked, the countries have not been affected by international economic growth, or they have been affected, but differently: as victims of progress elsewhere, as ‘collateral damage’. Third: global inequality has increased. In regions experiencing regress this could mean that people fall below any decent level of living, slip through any safety net, lose any capacity to catch up later, lose their dignity as human beings. Indeed, that would be a crisis, a crisis in development, a crisis in societies. In so far as it would be due to the inherently dualistic character of the global economy, whereby large parts of the world’s population are condemned to poverty and despair, it would also be a crisis in world society.1
Is this too gloomy? According to the World Bank, less than 1.2 billion people now live on or less a day, compared to 1.3 billion a decade ago. [WORLD BANK, 2002a]2. Is that a reason for optimism? Yes and no. Yes, because it shows that high economic growth can lead to less poverty: the fall in the poverty figure was largely due to developments in China, where annual economic growth was 9% in the 1990s, lifting 150 million people out of poverty. No, because excluding China the overall figure increased, from somewhat more than 900 million to about 950 million people. That is a relative decrease, from less than 30% of the population of the developing countries as a whole to less than a quarter. Is that progress? It depends. In Sub-Saharan Africa the figure increased substantially, by 30% in only a decade. In South Asia it is still around half a billion people. That is disappointingly high, four decades after the beginning of coordinated national and international strategies for growth, development and poverty reduction.
In many parts of the world poverty is high and increasing, despite the fact that the 1990s saw the highest annual world average growth figures since the end of the Second World War and decolonisation. Clearly the vast accumulations of income and wealth have not been used for sustainable poverty reduction. During the last decade of the previous century an alarmingly high number of people suffered from worsening living conditions, notwithstanding political promises made at the beginning of that decade. In 1992 in Rio de Janeiro, at another global summit – the United Nations Conference on Environment and Development (UNCED) – world leaders came together to pledge adherence to a new development paradigm: sustainable development. Heads of State and Government, by adopting the new principles and policy programmes contained in Agenda 21, declared that in the future the world’s resources would be utilised in such a way that people would be at the centre and that future generations would not be deprived of the same opportunities as present generations. [United Nations, 1992] Ten years later we can only conclude that the ‘sustainable development decade’ of the nineties – the UN Fourth Development Decade – was less successful than the First Development Decade of the 1960s.
However, conventional wisdom is that poverty is on its way out, because the number of people on less than a day is decreasing. However, what is the significance of the a day criterion, which has found its way into the Millennium Development Goals? The authors of the Human Development Report do not take a position on this. They refer to critics who think that this yardstick ‘reveals little about income poverty and its trends’, but note that others call it ‘rough but reasonable’. I belong to the second group in that I believe it is of course necessary to have some global yardstick. But the a day yardstick is rough beyond reason. Why not, say, one and a half or two dollars a day? Are people who no longer figure in the poverty statistics, because they now earn one dollar a day, out of poverty for good?
As questionable as estimates of the poverty line itself are estimates of the number of people living on or below it. What about the people who did not even reach this level because they died, due to poverty, shortly after birth or at least far below the average life expectancy level enjoyed by others? Their numbers do not even reach the income statistics. Nor did they in the past, which means that these statistics alone cannot shed light on historical comparisons of income poverty. At present, annual poverty-related deaths run into dozens of millions. Such a figure would add substantially to an annual stock figure of poor people at any particular moment of time. One sign of progress is that, since the 1960s, maternal death and infant and child mortality – strong indicators of poverty – have decreased and that life expectancy has increased. But this is by no means true everywhere and the trend seems to be turning again: AIDS kills poor people in particular. In some countries, previously rising life expectancies have been reversed – sometimes by as much as a third – and have dropped back to pre-1980 levels. At present, children in southern Africa can expect to live shorter lives than their grandparents. [United Nations, 2002c, 8]
What is the significance of the concept of income poverty anyway? Poverty cannot be captured in terms of money and income alone. If poverty is seen as a lack of opportunity to acquire lasting control of resources in order to strengthen one’s capacity to acquire the basic necessities of life – water, energy, food, a safe place to eat, rest, sleep, wash, have sex and go to school, basic health services and medicine in case of illness, a job enabling all this or the income to acquire it by means of exchange, access to economic markets and social networks, knowledge to survive in this world, information and education to acquire more knowledge and to gain the necessary insights to cope with disasters, threats, violence and challenges and, when that is beyond the capacity of the individual, some protection – all that requires more than money, more than an income. It requires assets or entitlements, the value of which cannot be easily estimated in money terms. In other words: rights that ensure access to all these things.3 Rights that certainly cannot be acquired for a day.
Income poverty is only an indirect indicator of human poverty.4 Other indicators reveal that there is more stagnation in the battle against poverty than we would expect by looking at the a day yardstick only. Some examples: every day 800 million people go hungry. During the last decade the number of hungry people fell in China, but it increased in 25 other countries. [UNDP, 2003, 88] One out of every six children of primary school age in developing countries does not attend school, and only half of those who do start primary school finish it. Close to 900 million adults cannot read or write, one out of four adults in the developing world. [UNDP, 2003, 92] In Sub-Saharan Africa one in every hundred live births results in the mother’s death. In many countries the already high maternal mortality figures are on the rise. HIV/AIDS, tuberculosis and malaria are killing more people than a decade ago. [UNDP, 2003, 97] More than 1.2 billon people do not have access to safe drinking water, while 2.4 billion people do not have adequate sanitation services. [United Nations, 2002b, 7] In the words of one of the participants at this year’s World Water Forum in Kyoto: more than one third of the world’s population does not have a place to shit. In more formal terminology: they defecate in open areas or use unsanitary bucket latrines. The consequences? Diarrhoea is the world’s greatest killer of children and half of the world’s hospital beds are occupied by patients suffering from easily preventable water-borne diseases. [United Nations, 2002b, 7]
One of these indicators has been labelled in the Human Development Report a ‘shameful failure of development’. [UNDP, 2003, 97] In fact all of them are. The world as a whole has never been as rich as it is today. In the past fifteen years globalisation has accelerated without precedent. The opportunities offered by money, capital, technology and communication to enable more and more people to benefit from progress are without precedent. But these opportunities have not been used to correct this shameful failure of the past and bridge the gap between those who benefit from modernity and those without entitlements enabling them to break out of the vicious circle of malnutrition, disease, illiteracy and poverty. On the contrary: if present trends regarding the nature of globalisation continue – and there are no indications to the contrary – progress and modernity will not bridge that gap, but widen it further.
Unlike Reddy and Pogge in their recent ‘How Not To Count The Poor’ [Reddy and Pogge, 2003] I do not criticise the usual poverty yardstick because of measurement difficulties. Statistical methods of measuring income levels and comparing them between countries and over time can be criticised, but there is no reason to suspect that they have been used to influence political decisions. My criticism of the a day yardstick is not so much statistical or conceptual as political. The figures and statistics concerned have been published and quoted so often that politicians, policymakers, public opinion and world leaders have been led to believe that the trend was in the right direction. However, there is a large difference between theory and practice, between the statistics showing a decrease in the number of people below the poverty line and the realities of misery. That reality has been put out of sight. During the 1990s the degree and extent of world poverty were played down and political leaders were lulled to sleep.5 Were they fooled, or were they fooling themselves by not asking the obvious question: what kind of life can you live on a day anywhere, in Africa, Asia, in the cities of Latin America, or even in China? Has that question not been raised because of the fear that a more ambitious goal, affecting more poor people, could never be attained without far-reaching changes in the distribution of world income and entitlements, while the level would only require better governance in the poor countries themselves and a slight increase in development aid?6 The blame for not meeting a a day target level could easily be apportioned to the poor countries themselves, while failing to reach a more civilised goal could be attributable to the richer countries and their reluctance to share with the poor.
Though in terms of macro world statistics – that is, in theory – fewer people now live below a poverty line which has been selected on political grounds, in practice poverty has increased in many regions of the world and also in many countries where there has been improvement in macro terms. That can only imply that inequalities have widened. And indeed, that is what has happened: inequality across the world increased during the last part of the previous century, between as well as within nations. The distribution of income among the people of the world, regardless of national borders, has become more unequal. Nowadays incomes are distributed more unequally among the global population than in the most unequal countries. [UNDP, 2003, 39]7 Since the First Development Decade inequality has only increased: while in 1960 the top 20% received 30 times the income of the poorest 20%, at the turn of the millennium this inequality had widened to more than 70 to 1.8 In a recent address to this Institute, UNCTAD Secretary-General Rubens Ricupero, quoting a paper by Baker and Nordin [Baker and Nordin, 1999], foresaw a global quintile disparity of even 150 to 1 ‘… fraught with risks for rich and poor alike.’ [Ricupero, 1999, 6/10]
This is nothing new for an ISS audience. Since Graham Pyatt’s address on ‘Poverty against the Poor’, Ricupero, Sandro Sideri, Bas de Gaay Fortman, Hans Opschoor, Mansoob Murshed, Rob Vos and others have highlighted the economic, social, environmental and legal dimensions of the relation between dire poverty and worsening income distribution. [Pyatt, 1999] [Ricupero, 1999] [de Gaay Fortman, 2002] [Opschoor, 2003] [Murshed, 2003] [Vos, 2003] The message has been clearly heard in this hall. Why am I adding my voice? Because there is such a difference between the irrefutable facts about poverty and inequality and the political answers.
‘Poverty: declining, but still a challenge’. That has been the general message during the last decade, explicitly repeated in the most recent World Development Report from the World Bank. [World Bank, 2003b, 2] The political meaning of such a message is: we are moving in the right direction and we should continue to do so, albeit somewhat faster. However, the direction is wrong. Since 1990 the trend has been negative. The authors of the Human Development Report say this in no uncertain terms: ‘What is most striking is the extent of the stagnation and reversals – not seen in previous decades. … (T)he 1990s saw unprecedented stagnation and deterioration. … Per capita incomes fell in 54 countries … Hunger increased in 21 countries … Child mortality rates increased … in a way not seen in previous decades …’ [UNDP, 2003, 40/44]