Is the end of poverty a real possibility in our life time?

| by Dr. Ruwantissa Abeyratne

(November 01, Montreal , Sri Lanka Guardian) I wish to refer to Milinda Rajasekerea’s informative article on poverty which appeared on 31 October 2011 in the Sri Lanka Guardian and add my own views on this very important but much misunderstood issue.

So how can we make our dream a reality? Through sheer hard work of course. The first step is to make a commitment toward ending poverty. This could be done nationally, regionally or globally. To start with, the national dimension would be the initial approach.
It is reported that more than 80 percent of the global population lives in countries with wide differentials of income which are rapidly widening. Only 5 per cent of the global income is earned by a massive 40 percent of the world population and 75 percent of the global income is earned by just 20 percent of the entire population of the world. UNICEF records that 22,000 children die every day due to poverty. The same Report says that less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it has not happened yet.

United Nations statistics reveal that one third of deaths in the world - some 18 million people a year or 50,000 per day - are due to poverty-related causes. That would be 270 million people since 1990, the majority women and children, roughly equal to the population of the United States. Every year nearly 11 million children die before their fifth birthday. In 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day. 800 million people go to bed hungry every day.

According to the World Bank, extreme poverty is the condition in which a person lives on less than US$ 1 per day, and moderate poverty is when he is forced to exist on less than $2 a day. The proportion of the developing world’s population living in extreme economic poverty fell from 28 percent in 1990 to 21 percent in 2001. Much of the improvement has occurred in East and South Asia. In Sub-Saharan Africa GDP/capita shrank with 14 percent and extreme poverty increased from 41 percent in 1981 to 46 percent in 2001. Other regions have seen little or no change. In the early 1990s the transition economies of Europe and Central Asia experienced a sharp drop in income. Poverty rates rose to 6 percent at the end of the decade before beginning to recede.

I dug up the facts given below from the internet:
  • Half the world's 3,000,000,000 people live on less than $2.00 a day.
  • Over one billion people heralded the 21st century totally illiterate
  • The GDP (Gross Domestic Product) of the poorest 48 nations (of the world's countries) is less than the combined wealth of the world's 3 richest people.
  • Nearly 1,000,000,000 people entered the 21st century unable to read a book or sign their names.
  • 51% of the world's 100 wealthiest bodies are corporations.
  • The wealthiest nation on Earth has the widest gap between rich and poor of any industrialized nation.
  • The poorer the country, the more likely that its debt repayments are being taken from people who neither contracted the loans nor received any of the money.
  • 20% of the population in developed nations consume 86% of the world's goods.
  • The top 20% of people living in the richest countries enjoy 82% of export trade and 68% of foreign direct investment. The bottom 20% of people barely receive more than 1%.
  • In 1960, the 20% of people in the richest countries had 30 times the income of the poorest 20%. In 1997, that ratio increased to 74 times as much

Is the end of poverty a real possibility in our life time? If one believes the answer to this question lies in the negative, one has to think again. Jeffrey D. Sachs, Director of the Earth Institute at Columbia University and onetime Special Advisor to former United Nations Secretary General Kofi Annan on the UN Millennium Development Goals and Economic Advisor to Governments around the World, in his book, The End of Poverty – Economic Possibilities of Our Time (Penguin: New York, 2005), says it is a distinct and real possibility. Sachs quotes the prescient 1930 book of British economist John Maynard Keynes, Economic Possibilities for Our Grandchildren, where Keynes envisioned that there would be no more poverty by the end of the 20th century, attributing to the eradication of poverty the relentless march of science and technology resulting in exponential global economic growth.

Sachs follows through without reservation, by invoking the same logic as Keynes, claiming that by 2025, we could be totally poverty-free by using the wealth of the world and the power of unending repositories of knowledge that we have. Of course, as every good news has a caveat, Sachs lays down the condition that our ability to transcend global poverty would depend on our collective wisdom in using our resources prudently and with good judgment. In his book, Sachs shows the way towards charting a wiser path towards global wealth and prosperity.

I once asked a Singaporean colleague working with me in the United Nations system the reason for Singapore’s phenomenal prosperity. He quoted four basic principles followed by the Singaporeans: if you do not work, you do not eat; save at least 20 percent of your income; invest your savings; and look after your own kin and do not let them be a burden on the Government. Although these are obviously not written principles of the Singaporean Government, I am of the view that the personal estimation of my colleague, albeit simplistic, is an accurate evaluation of the reason for Singapore’s prosperity. Sachs sites similar concepts such as maximizing on savings; trade and technology, to name but a few.

To examine this issue the first thing one must do is to define the word “ poverty”. Poverty is defined as a condition in which a person or community is deprived of, or lacks the essentials for a minimum standard of well-being and life. Since poverty is understood in many senses these essentials may be material resources such as food, safe drinking water, and shelter, or they may be social resources such as access to information healthcare, education, social status, political power or the opportunity to develop meaningful connections with other people in society.

Things are not looking all that bad. Life expectancy has greatly increased in the developing world since World War II and is starting to close the gap to the developed world where the improvement has been smaller. Even in Sub-Saharan Africa, the least developed region, life expectancy increased from 30 years before World War II to a peak of about 50 years before the HIV pandemic and other diseases started to force it down to the current level of 47 years. Child mortality has decreased in every developing region of the world. The proportion of the world's population living in countries where per-capita food supplies are less than 2,200 calories (9,200 kilojoules) per day decreased from 56% in the mid-1960s to below 10% by the 1990s.

Between 1950 and 1999, global literacy increased from 52% to 81% of the world. Women made up much of the gap: However, female literacy as a percentage of male literacy has increased from 59% in 1970 to 80% in 2000. The percentage of children not in the labour force has also risen to over 90% in 2000 from 76% in 1960. There are similar trends for electric power, cars, radios, and telephones per capita, as well as the proportion of the population with access to clean water.

Although the most severe poverty is in the developing world, there is evidence of poverty in every region. In developed countries, this condition results in wandering homeless people and poor suburbs and ghettos. Poverty may be seen as the collective condition of poor people, or of poor groups, and in this sense entire nation states are sometimes regarded as poor, but euphemistically called developing nations..

When measured, poverty may be absolute or relative Absolute poverty refers to a set standard which is consistent over time and between countries. An example of an absolute measurement would be the percentage of the population eating less food than is required to sustain the human body (approximately 2000-2500 calories per day).

Relative poverty views poverty as socially defined and dependent on social context.. In this case, the number of people counted as poor could increase while their incomes rise. A relative measurement would be to compare the total wealth of the poorest one-third of the population with the total wealth of richest 1% of the population.

In many developed countries the official definition of poverty used for statistical purposes is based on relative income. As such many critics argue that poverty statistics measure inequality rather than material deprivation or hardship. For instance, according to the United States Census Bureau, 46% of those in "poverty" in the U.S. own their own home (with the average poor person's home having three bedrooms, with one and a half baths, and a garage). Furthermore, the measurements are usually based on a person's yearly income and frequently take no account of total wealth. The main poverty line used in the Development (OECD) and the European Union is based on "economic distance", a level of income set at 50% of the median household income.

It is reported that the US poverty line is more arbitrary. It was created in 1963-64 and was based on the dollar costs of the U.S. Department of Agriculture's "economy food plan" multiplied by a factor of three. The multiplier was based on research showing that food costs then accounted for about one third of the total money income. This one-time calculation has since been annually updated for inflation.

Of course, at the present time, even if poverty may be lessening for the world as a whole, it continues to be an enormous problem. This is due to various socio-economic factors.

The World Bank's "Voices of the Poor", based on research carried out over 20,000 poor people in 23 countries, identifies a range of factors which poor people consider elements of poverty. Most important are those necessary for material well-being, especially food. Many others relate to social rather than material issues such as precarious livelihoods; excluded locations; gender relationships; problems in social relationships; lack of security; abuse by those in power; disempowering institutions; limited capabilities, and weak community organizations.

So how can we make our dream a reality? Through sheer hard work of course. The first step is to make a commitment toward ending poverty. This could be done nationally, regionally or globally. To start with, the national dimension would be the initial approach. Secondly, we need a plan, which we already have in the United Nations Millennium Goals. Thirdly, we need to empower the poor. The rich nations may not be encouraged to assist in this goal if the poor nations and their citizens are silent. Sachs cites the likes of Mahatma Gandhi and Martin Luther King who did not wait for the rich and powerful but went ahead helping the cause of the poor and downtrodden.

Another important and compelling need is to empower the United Nations and strengthen it, along with raising the profiles and standing of such financial institutions as the International Bank for Reconstruction and Development (World Bank) and the International Monetary Fund. We also need to ensure sustainable development by harnessing scientific and technological advancement. The last frontier is of course individuals – all of us as separate beings, contributing to the cause and supporting our governments. We have to ensure together that democracy, the rule of law, health care and education are fostered and protected in our societies.

The wisdom of Mahinda Chintana, is profound when it tells us: “a Nation grows to its heights through unity, discipline and handwork. Honesty and good governance are essential in growth. The quality of rural economy, national human resource are new growth factors. Creating benefits for common people and improving their life are growth goals. Trusting, development and utilization of local resources are our growth aims”.