To track progress toward its goal of eradicating extreme poverty by
2030, the United Nations relies on World Bank estimates of the share ofthe world's population below the so-called International Poverty Line
(IPL). ---- In 1990, a group of independent researchers and the World
Bank examined the national poverty lines of some of the world's poorest
countries and converted these lines into a common currency using
purchasing power parity (PPP) exchange rates. PPP exchange rates are
constructed to ensure that the same amount of goods and services are
valued equally across countries. In all of these statistics, the
researchers took into account not only people's money income, but also
their non-monetary income and household production.
An IPL of $1.90 per day was derived as the median of the national
poverty lines of 15 poor countries in the 1990s, expressed in 2011 PPP.
The selection of these 15 poor countries was based on limited data at
the time. With the collection and analysis of new data from other
low-income countries, the reference group was expanded. The IPL is now
derived from the median of the national poverty lines of 28 of the
world's poorest countries, expressed in 2017 PPP.
In September 2022, the figure at which this poverty line was set was
moved from $1.90 to $2.15 per day. This reflects a change in the units
in which the World Bank has expressed its poverty and inequality data -
from international dollars given in 2011 prices to international dollars
given in 2017 prices. This means that anyone living on less than $2.15 a
day is considered to be living in "extreme poverty." Just under 700
million people worldwide are in this situation.
The World Bank estimates that the share of people living in extreme
poverty globally for 2019 - the latest year available - is 8.4%, or
about 700 million.
But this global figure is not an accurate measure of poverty. There are
poor people in every country, people living in poor housing and
struggling to afford basic goods and services such as heating,
transportation and healthy food for themselves and their families. So
the definition of poverty differs from country to country, but in
high-income countries, the poverty line is about $30 a day. Even in the
world's richest countries, a significant share of people-between one in
ten and one in five-live below this poverty line. If we apply this
$30-a-day poverty line to the global income distribution, 85 percent of
the world's population lives on less than $30 a day. That's 6.7 billion
people.
Historian Mikhail Moatsos has produced a new global data set that goes
back two centuries. According to his research, three-quarters of the
world lived in extreme poverty in 1820. That means they "couldn't afford
a small living space, minimal heating capacity, and food that wouldn't
induce malnutrition." But that share has fallen sharply since then. And
the share of the world's population living in "extreme poverty" as
defined by the World Bank has never fallen as rapidly as it has in the
past three decades.
So is global poverty almost over? It depends on whether you buy the
World Bank's index. The content of the IPL is dubious to say the least.
Unlike many national thresholds, it is not based on any direct
assessment of the cost of basic needs. It is an absolute, constant line
of value.
This measure suggests that "extreme poverty" was the norm for virtually
all humanity throughout history, until the 19th century, when
colonialism and capitalism finally came to the rescue.
Robert Allen has challenged this conclusion. He shows that the GDP data
used by the World Bank produce significant distortions when used to
measure poverty. Instead, using consumption data, Allen constructs a
"basic needs" poverty line that is roughly equivalent to the World
Bank's $1.90 line and calculates the share of people below it for three
key regions: the United States, the United Kingdom, and India. The
results show that Asia's high rates of extreme poverty are actually a
modern phenomenon-"a development of the colonial era," Allen writes:
"Many factors may have been involved, but imperialism and globalization
must have played a major role." Allen's research indicates that extreme
poverty in 20th-century Asia was significantly worse than under
13th-century feudalism. Allen notes that the $1.90/day line is below the
level of consumption of people living in slavery in the 19th-century
United States.
$2.15 a day is ridiculously low. $5 a day is what the U.S. Department of
Agriculture calculates is the minimum needed to buy enough food. And
that doesn't take into account other survival requirements, like shelter
and clothing. In India, children living on $2.15 a day are 60 percent
more likely to be malnourished. In Niger, children living on $2.15 have
a mortality rate three times higher than the global average. Less than 1
percent of Africa's population has an income higher than the average
Western income.
In a 2006 paper, Peter Edward of Newcastle University used a measure
that calculates that in order to reach the normal human life expectancy
of just over 70 years, people need about 2.7 to 3.9 times the existing
World Bank poverty line. In the past, it was $5 a day. Using the new
World Bank calculations, it is about $7.40 a day. This gives a figure of
about 4.2 billion people living in poverty today, up by 1 billion in the
last 35 years. And there is another measure of poverty, the
Multidimensional Poverty Index, which covers 101 developing countries.
This yields a poverty rate of 23%, not 8%. Between 1990 and 2015, the
number of people living below this line in sub-Saharan Africa and the
Middle East increased by about 140 million. So the living standards of
the world's poorest, who survive on just half the World Bank's austerity
line, have only increased slightly in 30 years. The world is nowhere
near ending poverty.
In fact, let's look at another way to measure global poverty. Two
centuries ago, the vast majority of people in Sweden lived in deep
poverty. Nearly 90% of the population was so poor that they could not
afford a small living space, minimal heating capacity, and enough food.
Today, the poverty line in Sweden is set at around $30 a day (on a PPP
basis). Strong economic growth over the last century has meant that most
Swedes now live above this poverty line.
Using a ridiculously low poverty line allows the World Bank to claim
that one billion people have been lifted out of poverty and to report a
global decline from 35% in 1990 to 9% in 2018. At $5 a day, 40% of the
world's population is still in poverty; at $10 a day, it's 62%; and at
$30, it's 85%. In all countries, a significant share of people live in
poverty. Even in the world's richest countries, a substantial share of
people-between one 10th and every fifth person-lives below this poverty
line. No country, not even the richest, has eliminated poverty. There
are no "developed" countries.
At a minimum, the world's capitalist economy must grow fivefold for
global poverty measured at $30 a day to decline substantially.
Inequality between all countries in the world could disappear completely
in this scenario. It should therefore be seen as a calculation of the
minimum growth needed to end poverty.
The World Bank believes that the main constraint on ending "extreme
poverty" is the failure of the transfer of resources from rich to poor
states. This means that poverty could disappear if governments decided
to do so. The World Bank explained it this way: "Suppose real GDP growth
for the developing world as a whole was 5% per year. If 10% of this GDP
growth accrued to the 21% of the developing world's population who are
extremely poor, and this 10% was distributed so that the income growth
of each poor person was exactly their distance from the World Bank
poverty line, extreme poverty would end." But no government is willing
to do this: this would probably end wars and the bloodletting of the
poorest areas, eliminating the very need for the state. Governments are
the problem, not the solution; it is not a question of convincing them,
but of abolishing them.
But there is little hope that the neocolonial economies still under the
boot of imperialism can close the income gap with the imperialist bloc.
Currently, international development assistance is just over $100
billion a year. This is only five times more than the bonus that Goldman
Sachs staff paid themselves during a year of crisis and more than five
times less than the flow of income from poor states to rich states each
year. According to UNCTAD, net transfers of resources from developing
states to developed states average $700 billion a year. It is not true
that resources are transferred from rich to poor countries to reduce
global poverty, but the opposite is true. Philip Alston concluded his
report to the United Nations on global poverty by pointing out that
"using historical growth rates and excluding any adverse effects of
climate change (impossible scenario), it would take 100 years to
eradicate poverty below the World Bank line and 200 years below a $5 a
day line (Agenda 2230!). This would also require a 15-fold or 173-fold
increase in global GDP, respectively. The poor will always be with us
under capitalism.
In reality, the productive forces that humanity has today would allow us
to satisfy these needs in a few years, without any further accumulation
or development of industry. The existing productive forces should be
redistributed on the basis of collective needs and scientific research
should be concentrated on the problems of food, clothing, housing and
health rather than for war purposes, and the majority of world
production should be reserved for underdeveloped areas.
We need to move from a mode of production oriented towards the growth of
private profit to a mode of production oriented towards the satisfaction
of social needs. The abolition of capitalism and the transition to a
communist mode of production is not a utopia, but a matter of life and
death for billions of people.
Tiziano Antonelli
https://umanitanova.org/misura-per-misura-quanto-manca-alla-scomparsa-della-poverta-globale/
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