The future of global poverty: What if there were multiple horizons for aid post-2015?

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“A Brookings paper out this week (here) does something a set of papers have sought to do recently – that is make projections about the future of global poverty. These kind of papers have significant policy implications because it is only by understanding both the future scale and anticipated locations of poverty that properly informed debates can be had on the scale and objectives of future international aid. And of course the whole post-2015 debate is mushrooming (see the latest here).

In a new paper for the Overseas Development Institute, we, meaning Peter Edward and myself, add to the debate by looking across a wide range of scenarios and methods to see the level of uncertainty and bias built in to these kind of forecasts.

We have three conclusions across a range of scenarios and approaches that somewhat tally with the Brookings paper but with some quite important differences. First, ending extreme poverty is plausible but the level of uncertainty is enormous. Across a wide range of scenarios, using different assumptions and methods, we find that it is plausible that $1.25 and $2 global poverty will reduce substantially by 2030. However this is by no means certain.

Different methods of calculating and forecasting poverty numbers give very different results as do an approach which takes account of changes in inequality. Uncertainties over future, and even current, poverty levels are especially high for India and China (where half of the world’s poor people currently live).

While it is likely that poverty in those countries will reduce dramatically by 2030 it is difficult to have much certainty over just how large those reductions will be. Because of these uncertainties it is possible to conceive, under different growth scenarios and different assumptions about future inequality, that $2 poverty could be eradicated in India and China by 2030 or that it could be at or above current levels. Second, don’t get too hung up on fragile states (at least not as the OECD defines them) because global poverty may well not be concentrated in such countries in the future – at least it is not a given.”

Source: post2015

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Economic growth masks poverty

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(added 17 days ago)

Halfway into his term, the president has achieved much, including the stellar economic growth that has earned the country an investment-grade credit status from Fitch Ratings. This is why the disclosure last week by the National Statistical Coordination Board (NSCB) that the incidence of poverty has remained unchanged for the past six years was a big embarrassment to the administration.

Many believe this was the reason Economic Planning Secretary Arsenio Balisacan, who heads the NSCB, was bumped off the official delegation that flew with the president to Brunei last Wednesday for the Asean Summit. The NSCB report said poverty incidence for the first half of 2012 was 27.9 per cent. Comparing this with the 2006 and 2009 first-semester figures of 28.8 per cent and 28.6 per cent, respectively, it said poverty remained unchanged as the computed differences were not statistically significant.

The NSCB noted that in terms of income distribution, 20 per cent of the population (or the poorest segment) accounted for only 6 per cent of the total national income, while the upper 20 per cent accounted for nearly 50 per cent. All efforts to address poverty will be for naught if the government continues to neglect agriculture. In a paper written in November 2008, Balisacan presented facts that remain true to this day: despite the relatively rapid pace of urbanisation in the past 20 years, poverty in the Philippines is still largely a rural phenomenon. Two of every three poor persons are in rural areas and mostly dependent on agricultural employment and incomes. Poverty incidence in agricultural households is roughly thrice that in the rest of the population. While agriculture's share in the total labour force has dropped from about half in the late 1980s to only a little more than a third by the mid-2000s, the sector continues to account for about 60 per cent of total poverty.

Last week, Balisacan was reported as saying that the visible underemployment in agriculture was a persistent problem that always came up in labour survey results. "This means that agriculture sector workers work less than 40 hours a week, perhaps because there isn't much demand for labour in their areas, and they are looking for additional work, possibly because the wages they receive are not enough to meet their needs. If the problem of visible underemployment in agriculture is addressed, then incomes of farmers would increase, poverty incidence would decrease, and we would not be compromising food security," he said.

The government should convince the private sector to invest in agriculture. It can start with the coconut industry, where, according to National Anti-Poverty Commission chief Joel Rocamora, the 70-billion peso (US$1.7 billion) coconut levy fund is available to spur farmers' production. Also, the government can improve the agriculture sector by simply coordinating with Agriculture Secretary Proceso Alcala, who has a number of programmes and projects that need only official support to get implemented.

At a recent roundtable with the Inquirer's business section, Alcala cited a quedan system that allows coconut farmers to take part in value-added production from coco sugar to coco biodiesel through cooperative- and joint-venture-type arrangements, and the expansion of the programme under which farmers may borrow funds using an ATM card, to cover the top 20 rice-producing areas nationwide.

In the next three years, the Aquino administration hopes to cut poverty incidence to 16.6 per cent, or half the 1991 rate of 33.1 per cent. It had better start aggressively addressing the issues stunting agriculture, otherwise, it will have no option but to again lower the poverty threshold income (or the minimum amount required to meet basic food and non-food needs) to meet its goal, as it did in 2011 when the threshold was lowered from the previous 52 to 46 pesos for every Filipino per day. Yes, this can cut the official number of poor people, but this is not what we need. We need the government to implement programmes and policies that will attack the root causes of poverty.

Source: nationmultimedia

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Durban Port's Poverty, Consumerism, Enoughness

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If an oil carrying ship hits the rocks off the Durban coast where I live it will cause a spill that will create many jobs, to pick up all the dead birds from the beaches up and down the coast. Economists who love capitalism do not see a problem with the consumer as shopping machine, because for them consumption contributes to job creation and economic growth, which they also see as completely problem free positive things. I don't.

Poverty, scarcity and frugality are related but importantly different concepts, as Wolfgang Sachs once wrote in a brilliant essay in just as good a book called Planet Dialectics in 1999. Importantly, for most of human history frugality has been the state of life, there was not really very much to go around, so people learned to be very careful with their possessions, a sort of 'waste not, want not' existence.

But then, capitalist markets, and the economics that justifies them invented scarcity as an organising principle of societies wherein the exploitation and expropriation of some peoples' things and labour is carried out by others, creating a wealthy class that gets wealthier, which after 400 years or so leads us to modern day inequality, the worst ever recorded.

In economic theory, markets deal with scarcity by automatically balancing the available supply of a thing with the demand that people have for it, and at that point a price emerges. In other words, the rarer the thing, and the more people that want it, the higher the price.

This is often a very cruel 'equilibrium price', particularly when something that is scarce is also a basic good, like food. Before a famine, the cost of food skyrockets as traders and hoarders make merry at everybody else's expense, while the price of other assets, such as livestock or jewellery drops like the proverbial stone, as people sell anything they can to try and meet the (rising) price of food.

Many economists with some semblance of a heart thus believe that governments need to regulate scarcity, particularly around basic goods and if markets are causing adverse outcomes, such as starvation in the case of food scarcity.

But there are also economists who believe in 'free' markets, as did the late Margaret Thatcher, who believed in the fundamental principle that 'free' markets, left unattended and to their own devices, generate the best outcome for society at large through a 'hidden hand' (although in her case this was often an iron fist, and yes many thought she had no heart at all).

Scarcity, however, is not necessarily a bad thing if we manage it properly. Indeed, humanity must do this as we live in a finite globe where commodities will just run out unless the sustainability clause in the increasingly popular concept of the 'Green Economy' is actually made to have some substance.

This brings us to the concept of poverty, which is essentially a classification as well as a real experienced existence for those called 'poor'.

Now don't get me wrong, poverty of course exists and is widespread and chronic for about 800 million to 1 billion people alive today. For these chronically poor people there is not enough food, or shelter, or clean water on a daily basis, and their notional right to government assistance under the UN Declaration of Human Rights is in some way ineffective. But for most of human history we have understood this as simply frugality, because people's perception of poverty is critically a relative one.

Many people discovered they were poor when other people became rich(er) and when they were termed as such by government or economists. Before this point, they were living frugally, if at risk of an early and easy death.

But above this group that nearly all would agree are poor today, there are a larger number of people who live in relative poverty to others, some of whom have so much income and assets that it becomes counter-intuitive to see them as poor at all!

In fact, a common middle class form of 'poverty', in Europe at least, is the person who complains that they have no money – once the mortgage, the school fees, the bills, taxes and so forth have already been paid! This is not really poverty, this is a critical lack of a sense of 'enoughness', and it is arguably a global virus, as Oliver James so eloquently argues in his book Affluenza.

Having no sense of enoughness is the largest driver of the global economy, as the advertising industry works day and night to persuade us that we need the next new thing, or style, or fashion.

Again in Europe, firms like IKEA are busy telling people that even furniture should become subject to fashion, so that one's sofa or kitchen table must be replaced seasonally, which of course hikes their profits and contributes to our landfill rubbish problem.

A lack of 'enoughness' sends addicted shopperholics to malls day after day, as 4 pairs of shoes is not enough, then 10, 40, 300. Capitalism loves this state of being as it drives economic growth, just as consumption drives many of us into debt.

Of course economists who love capitalism do not see a problem with the consumer as shopping machine, because for them consumption contributes to job creation and economic growth, which they also see as completely problem free positive things. I don't.

If an oil carrying ship hits the rocks off the Durban coast where I live it will cause a spill that will create many jobs, to pick up all the dead birds from the beaches up and down the coast. To clean the gorgeous Bay of Plenty, Addington's, Sun Casino, North Beach, Brighton Beach, up to Ballito and down to Amanzimtoti, and so on.

Indeed, it would cause a localised hike in economic growth and job creation – but only a crazy person would see this as a good thing. So when South African Finance Minister Pravin Gordhan told around 300 South Durban residents on 1 September, last year (2012), in Clairwood's historic Tamil Hall, that the demolition of their houses to make way for the port extension in the South Durban Basin was a really good idea, I was left in a sense of morbid awe.

He argued that it would create jobs and cause economic growth. I was also struck by his inflective addition to the 'There Is No Alternative' (TINA) school of economics that is forever in favour of free markets – for Big Oil, for mining companies and for an unsustainable future of ever increasing amounts of consumption and global warming.

And again, there was here another critical lack of a sense of enoughness, that the beautiful Port of Durban, Wilson's Wharf, the BAT Centre, the sandbank in the bay, the strip of grass beside the habour wall where the shareblock residents play football at dusk, the green and red directional lights twinkling at night is as it should be, and indeed is exactly the right size.

No sense that the Isipingo Beach, allegedly the most polluted in the world, or the primary school next to the Engen Refinery (which keeps throwing hot oil and flames into the air in sporadic accidents), where one in two children have to take inhalers to school for their asthma have not had enough already.

Then came the April 2013 notices of major refinery expansions by both BP at Sapref (next to the old airport) and Total at Island View Refinery – which together with Engen represents the largest oil refining complex on the continent. Has this community not suffered way more than its fair share of the 'externalitites' of capitalist markets to say 'enough already'?

In fact, it occurred to me while listening to the Minister of Finance the Honourable Pravin Gordhan, telling people that 'we' are in a race with the Mozambicans for economic growth, and that 'they' were building new ports, so 'we' had to as well, that maybe he was talking about a sporting fixture.

But no, the Minister had embraced the race to economic growth at any cost, so 'we' had to as well, or otherwise it would be the End of Life as We Know It. Indeed he invokes fear by arguing that the 'There is No Alternative' view of economics, if not understood by the little people could mean national disaster - a distressingly weak case intellectually.

He said that The Nation JUST HAD TO make the Port eight times as large (by capacity), destroying the sandbanks, the rare birds, chameleons, the house that Mahatma Gandhi once lived in, the cultural icons of an historic Indian community, temples, grave yards and the communities of Clairwood, Merebank, Mobeni, Wentworth and parts of Isipingo, Bluff and lower Umbilo or the future would be BLEAK and JOBLESS, and the hole in the nation's finances called sovereign debt would just grow into a figure of countless 'noughts'.

Now to destroy so much I think you would have to be pretty confident about the economic case, so taking my professional interest in the assessments, or 'impact' studies that governments do to work out the affect that a development project will have on the people and environment I tracked down the particular report, with the help of the wonderful people at the South Durban Community Environmental Alliance that is supposed to justify this particular act of structural violence.

Before opening it, it doesn't look good, as the places and people have already become an 'interface zone', and by page 3, the consultants are talking about the 'redesign' of their space.

People-less, the report talks of the urgent need that Gauteng has for oil, and the huge pipeline that has already been built from Durban to Johannesburg to fulfil the national addition to big cars, to mining and to ripping minerals out of the ground at a faster and faster pace, to pay for the stuff coming into the big malls.

It is rumoured that a Chinese company are providing financing to Transnet in exchange for a guaranteed proportion of freight volume through the port. The minerals of Africa ripped out of the ground at an ever faster pace to pay for the consumer goods imported, plastic pink things for girls, plastic blue things for boys, the waste products of global petrochemical addition. The beauty, the history, the heritage, culture, Life does not get a look in.

There is certainly no sense of Enoughness here. Only a shrill urgency claimed for growth and jobs, both of which are calculated and predicted in the absence of consideration for the growth that the local economy already produces, and the jobs already there, whether in a car parts vendor, a Samoosa maker in her back kitchen, a fisherperson on the sandbank or a surf club struggling on the Bay Head.

Thus the port will apparently, according to Transnet create 28,000 jobs up and down the whole infrastructural plan, from the new oil exploration work out on the continental shelf, through the logistics chain, and up to Harrismith and Joburg. More oil, more containers, more roads, more pipelines.

But how many jobs are already there in the 30,000 affected households, and in their small businesses and informal businesses. They simply don't know. One sign of a disadvantaged community is that they are never counted.

There are many numbers, and much counting, and loads of figures, diagrams and data in the very long consultancy report. In Chapter 8, the 'Composite Summary & Strategic Issues Final Draft March 2009 A Local Area Plan and Land Use Management Scheme for the Back of Port Interface Zone. Perspective' Prepared by the Graham Muller Associates Consortium, the consultants commissioned by Ethekwini Municipality consider the challenges, possibilities and strategic issues, in a nice neat table, that arise from their Back of Port 'interface redesign'.

Environmentally, under 'possibility' we are told that the biodiversity loss and further pollution mean "It may be necessary to plan compensatory reserve areas", somewhere else, as land use within the area is too dense.

Thus a 'strategic issue' is that "A significant area will be displaced, compensation may require remaining areas of coastal grassland such as the racecourse in addition to significant areas outside the area. The loss of habitat associated with port development may not be replaceable in the location. It may be necessary to conserve other areas within the Municipal Area". The grammar is not good here, but I take this to mean that all will be lost here, but never mind, we'll call the (already existing) racecourse 'compensation'.

In the trade of environmental impact assessment, this is called mitigation in a non-proximate offset. In plain English it is called, hard luck, we'll save something for someone else, somewhere else, by calling it compensation and promising not to destroy that as well (even if it wasn't under threat in the first place). In fact in this case, a chunk of the racecourse will indeed go under concrete, so maybe we should see what remains as our collective 'mitigation'.

But arguably the most human cruelty in this project is to be found in the summary of social impact. Here it is a 'challenge' that there is a "Need for additional container capacity at a port (Super Port / Hub Port)" and a challenge that there is a "National focus on South Durban as key petro-chemical hub – industrial growth zone and the local desire of communities to continue living in South Durban".

Indeed, a challenge if not total recipe for distress. This is a community which from Apartheid through to now has been systematically socially excluded and made to stand at the back end of the line for service delivery improvements.

It was of course no accident that the dirty industries were originally put next to Indian and Black communities, and though this may sound cynical to some, that there has been a lack of investment in these areas for some considerable time, in the expectation that a project like this would one day get done. Previous forced removals have left people in squalor in apparently permanent 'transit camps', with no history of compensation.

This lack of intervention now allows for an important framing of the community as dysfunctional, a cruel twist where a place and its people can be pathologised and their forced poverty made into a reason for their ultimate destruction.

It is a 'challenge' that there is, again in the view of Consultants Inc "Poverty, unemployment and \[a] slow pace of transformation \[which] impacts on \[the] social character and conditions of \[the] neighbourhoods".

Consultants Inc. observe that "Social decline of large inner city zones as a result of the lack of intervention into critical social issues: \[results in] crime, drugs, alcohol abuse, life skills, social norms and activities for the youth, and HIV/Aids", while "Crime and the inability to manage the problem at all levels of government impacts on \[the] quality of life and \[the] stability of neighbourhoods". In other words, they imply that there isn't really much to be lost here as it's a pretty terrible place to live. The complexity of a neighbourhood, problems and all, is then re-framed as a sequences of social problems.

So I was particularly interested to see what 'possibilities' there were, but then quickly grew alarmed as the job creation and economic growth spoken of by the Minister has magically turned into "programmes in key strategic areas to address social problems: crime prevention, drugs and alcohol and programmes for the youth".

They will lose their homes and then be sent on a social reprogramming! In fact look a little deeper, as the Stop the Port campaign are doing, and it looks like there are derisory plans to compensate people, who will just be asked to politely walk away. A letter sent on 22 May, 2012, from the Head of Housing of Ethekwini Municipality to the ECOD Housing Committee, sums up well - that what they have is a possible resettlement in a place that is imaginary/not yet built.

Parts of the letter read: "A report is to be submitted to the Housing Committee that suggestsfor relocation to Cornubia in terms of a prioritization process. The 12 settlements requested for relocation \[as a consequence of the Back of Port 'development'] will be included in that report...

"As the report currently stands there is a need of approximately 30 000 units identified for relocation to Cornubia. If the 764 structures (excluding the possibility of the "backyard shacks" in formal sites that are in the process of been quantified for Clairwood) the demand on Cornubia is further increased. The Cornubia development allows for the construction of approximately 12000 fully subsidized housing structures \[not built yet]. Therefore there is an oversubscription of almost 18 000 units".

Thus in this sorry tale of 'free' markets you have Transnet, Big Oil, ideologically explained by TINA forcibly removing 30,000 affected 'units' (that is households), with no plans for compensation.

Their 'enoughness', their frugality, their communities, are to be destroyed so \[bad] economists can manage 'scarcity' for Oil, without any apparent hat-tip to the ideas of the Green Economy promulgated by the Government from COP17, and the cruelty of the footnote to the plans? The people, whose very 'poverty' is being used against them.

They are depicted, after years of government neglect, as communities not worth keeping. All of which goes to show how three other related words, 'wisdom', 'education' and 'intelligence' are also very similar, but again, and critically in this case, very different as educated consultants and government ministers demonstrate so little wisdom or intelligence.

Let's say 'Enough!' I am humming that Chumbawumba classic anthem 'Enough is Enough is Enough', remembering the heroic Sokwanele group in Zimbabwe, who in a different context are shouting 'sokwanele' ('enough' in Shona), trying to get rid of the dictator and his de facto military state within a state.

I may write a book on the necessary need to restore enoughness as a concept in economics. I sometimes start that lecture with a metaphor, imagine the global economy is a car driving at 160 km per hour down the N1 with no seatbelts for the children. Would you want to increase the speed? No, not if you were sane. So why do we need any more 'economic growth'?

It is only the measurement of how much faster insane economists want an already critically unsustainable and dangerously large global economy to go. More, bigger, better, faster, consume, consume, shop.

Source: theafricareport

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Poverty report shows Sonoma County's Latino families struggling

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More than 60 percent of Latino households in Sonoma County are barely getting by on incomes of $25,000 or less. Compare that to only 18.5 percent for the county as a whole. Nearly 14 percent of children in Sonoma County and 16 percent in Santa Rosa were living below the federal poverty line — a dismally low threshold set at $22,050 a year for a family of four. These are among the many findings in a new poverty report that details not only the adverse effects of the Great Recession but the lopsided consequences of an anemic economic recovery.

Sponsored by the North Bay Organizing Project and the Living Wage Coalition of Sonoma County, the report was presented Saturday at a forum on economic justice at the Unitarian Universalist Congregation of Santa Rosa. The forum was organized as a way of highlighting economic trends that are endangering the middle class and pounding low-income and minority residents.

“The story here is that it's a recovery, but for whom?” said Marty Bennett, a member of the leadership council of the North Bay Organizing Project and a co-chairman of the Living Wage Coalition. “From our perspective, there's really two Sonoma Counties — the affluent at the top and those at the bottom of the ladder. A substantial percentage are in the other Sonoma County.”The report, which was prepared by Ginny Browne, an East Bay planner and organizer, shows that in Sonoma County, communities of color are feeling the brunt of recent hard times.

From 2007 to 2010, the share of Sonoma County residents living in poverty grew from 9.4 percent to 11 percent, or 51,774 individuals. In Santa Rosa, more than 13 percent of the city's population is living in poverty, the report said.

That statistic jumps to nearly 17.7 percent for Latinos in Sonoma County and 19.7 percent for Latinos in Santa Rosa. Within Sonoma County's small black population, which numbered 7,610 residents in the 2010 Census, 21.1 percent lived in poverty. In Santa Rosa, 27 percent of blacks lived in poverty.

“It's just extraordinary, when we look at the income disparity, the much higher rates of poverty and working poverty are among Latinos and African-Americans,” Bennett said. At the forum, the poverty report served as a launching point for attendees, which included labor, civil and immigrant rights and economic justice organizers, to tackle possible local solutions during afternoon working group sessions.

At one such session, a national community-organizing expert headed a discussion on ways to establish project labor agreements in major transportation works that ensure significant job opportunities and training for minorities, women and low-income residents.

Laura Barrett, the national campaign director for the Transportation Equity Network, highlighted several cases across the country where such agreements were won. Local attendees were interested in how to score labor agreements for future SMART train projects and other highway construction jobs.

The forum's keynote presentation was given by Chris Benner, associate professor of community and regional development at UC Davis. Benner focused on the three-pronged crisis that he said afflicts the current economy: joblessness and sputtering growth; wage and race inequality; and political gridlock and fragmentation of society.

In a recent book he co-authored called “Just Growth,” Benner examined 192 metropolitan regions across the country where decisions about growth are made by a diverse group of stakeholders, including communities of color. These are places where “growth and equity have gone together,” he said.

“There's a lot of research out there that shows regions that are more equitable grow faster,” he said. During his presentation, Benner pointed out that population growth in many parts of the country will be driven by communities of color, particularly Latinos and Asians. Future economic growth in many parts of the country will depend upon getting more Latinos and African-Americans into the middle income range, he said.

The Sonoma County poverty report paints a dire picture of these populations. The report says that federal poverty guidelines provide an inaccurate measure of current economic hardship. A more accurate measure is derived using 200 percent of the federal poverty threshold, which is $44,100 a year for a family of four, the report says. Using this measure, more than a quarter of all county residents are struggling to get by. In Santa Rosa, Rohnert Park and Healdsburg, 1 in 3 residents is struggling, the report said.

Among the other findings in the report:
Sonoma County's median household income, adjusted for inflation, dropped 5.7 percent, from $65,531 in 2007 to $61,837 in 2010.

In Santa Rosa, blacks earned 61 cents for every dollar earned by whites, and Latinos earned 69 cents on the dollar. Women earned 79 cents for every dollar earned by men in both the county and Santa Rosa. About 15 percent of county wage earners fall within the five lowest-paid occupations, which include farming, building cleaning and other service jobs. In Santa Rosa, it's 17.8 percent.

The report uses “self-sufficiency” measures derived by the nonprofit California Budget Project. According to these measures, a family in Sonoma County must have two income earners working full-time earning at least $19.11 an hour or $39,749 a year in order to pay for food, transportation, housing, health care and child care.

Although unemployment in Sonoma County declined from 10.4 percent in 2010 to 7.7 percent last year, about half of all new jobs through 2018 are expected to pay $15 or less. The report, citing figures from the National Employment Law Project, points out that across the country 21 percent of all jobs lost during the recession were low-wage jobs that paid less than $13.83 an hour.

Source: pressdemocrat

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Poverty drops globally…there ‘re still challenges – World Bank

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The World Bank, yesterday, disclosed that 1.2 billion persons are living under $1.2 a day of which sub-sahara Africa accounts for one-third of the world’s poor.

According to the multilateral institution, the number of people living on less than $1.25 per day has decreased dramatically in the past three decades, from half the citizens in the developing world in 1981 to 21 percent in 2010, despite a 59 percent increase in the developing world population.

However, a new analysis of extreme poverty released by the World Bank shows that there are still 1.2 billion people living in extreme poverty, and despite recent impressive progress, Sub-Saharan Africa still accounts for more than one-third of the world’s extreme poor.

“We have made remarkable progress in reducing the number of people living under $1.2 a day. We have made strides in cutting down poverty, but with nearly one-fifth of the world population still below the poverty line, not enough,” said Kaushik Basu, World Bank Senior Vice President and Chief Economist, adding that, “Directing investment towards the poor will require coordinated effort by the bank, our partners, and the international development community; and will, let’s face it, entail sacrifice on the part of those who are fortunate enough to be better off.”

Indicators show that extreme poverty headcount rates have fallen in every developing region between 1981 and 2010. And both Sub-Saharan Africa, SSA, and Latin America and the Caribbean, LAC, seem to have turned a corner entering the new millennium.

After steadily increasing from 51 percent in 1981 to 58 percent in 1999, the extreme poverty rate fell 10 percentage points in SSA between 1999 and 2010 and is now at 48 percent—an impressive 17 percent decline in one decade. In LAC, after remaining stable at approximately 12 percent for the last two decades of the 20th century, extreme poverty was cut in half between 1999 and 2010 and is now at 6 percent.

The report said “However, despite its falling poverty rates, Sub-Saharan Africa is the only region in the world for which the number of poor individuals has risen steadily and dramatically between 1981 and 2010. There are more than twice as many extremely poor people living in sub Sahara Africa today, 414 million than there were three decades.

As a result, while the extreme poor in Sub sahara Africa represented only 11 percent of the world’s total in 1981, they now accounted for more than a third of the world’s extreme poor. India contributes another third (up from 22 percent in 1981) and China comes next, contributing 13 percent (down from 43 percent in 1981″.

According to the World Bank “The note finds that the average income of the extremely poor in the developing world has been rising and steadily converging to the $1.25 per day poverty line. In 2010, the average income of the extremely poor in the developing world was 87 cents per capita per day, up from 74 cents in 1981 (in 2005 Purchasing Power Parity dollars).

This increase in incomes of the extreme poor is unfortunately not seen in Sub-Saharan Africa. Between 1981 and 2010, the average income of the extremely poor has remained essentially flat at approximately half of the $1.25 line in that region”.

It further said in addition that globally, as of 2010, the aggregate global extreme poverty gap was $169 billion in 2005 PPP terms, which represents approximately 0.25 percent of global GDP. This is less than half the gap in 1981 ($362 billion).

It is important to note that extreme poverty gap is the conceptual amount of direct additional income an average extremely poor person would need to get to $1.25 per day and is not indicative of the level of assistance required to close the gap.

The International Monetary Fund and the World Bank Group, yesterday, said urbanization helps pull people out of poverty and advances progress towards the Millennium Development Goals, MDGs.

In a joint report released, yesterday, the two multilateral institutions, however said, if urbanization is not managed well, it can also lead to burgeoning growth of slums, pollution, and crime.

The report is contained in the Global Monitoring Report, GMR, 2013, released by the World Bank and International Monetary Fund, IMF.

According to the report, urbanization has been a major force behind poverty reduction and progress towards other MDGs. With over 80 percent of global goods and services produced in cities, countries with relatively higher levels of urbanization, such as China, and many others in East Asia and Latin America, have played a major role in lowering extreme poverty worldwide.

In contrast, the two least urbanized regions, South Asia and Sub-Saharan Africa, have significantly higher rates of poverty and continue to lag behind on most MDGs.

The Global Monitoring Report 2013 said rural-urban dynamics and the Millennium Development Goals, MGDs, starkly compares the well-being in the countryside versus the city. Urban infant mortality rates range from 8-9 percentage points lower than the rural rates in Latin America and Central Asia; to 10-16 percentage points in the Middle East and North Africa, South Asia, and Sub-Saharan Africa and highest in East Asia 21 percentage points.

It said: “In South Asia, 60 percent of urban dwellers have access to sanitation facilities, compared with 28 percent in rural areas. In Sub-Saharan Africa, 42 percent of the urban population has access, compared with 23 percent of rural residents. Access to safe water in urban areas in developing countries was almost complete in 2010, with 96 percent coverage, compared with 81 percent of the rural population having access.

“The rural-urban divide is quite evident. Megacities and large cities are the richest and have far better access to basic public services; smaller towns, secondary cities, and areas on the perimeter of urban centres are less rich; and rural areas are the poorest,” said Kaushik Basu, the World Bank’s Chief Economist and Senior Vice President for Development Economics.

“But this does not mean unfettered urbanization is a cure-all – the urban poor in many places urgently need better services, as well as infrastructure that will keep them connected to schools, jobs and decent health care.”

The Global Monitoring Report which is also an annual report card on MDG attainment, finds that progress continues to lag on reducing maternal and child mortality and providing sanitation facilities, targets which will not be met by the MDGs 2015 deadline.

However, progress has been stellar on reducing extreme poverty, providing access to safe drinking water and eliminating gender disparity in primary education, with these targets already achieved several years ahead of the MDGs deadline.

Though extreme poverty has declined rapidly in many countries, the World Bank estimates that by 2015 there will be 970 million people living on $1.25 a day. Therefore, continued concerted efforts to get extreme poverty as close to zero as possible are needed.

“Emerging market and developing countries are growing robustly notwithstanding slow growth in advanced economies. Sustaining this growth – by continuing to maintain prudent macro policies and strengthening the capacity to manage risks, including through a rebuilding of depleted policy buffers – is key to continued progress in poverty reduction as we approach 2015,” said Hugh Bredenkamp, Deputy Director of the IMF’s Strategy, Policy and Review Department.

As the report points out, the challenge of fighting poverty and improving the living conditions of the poor, lies in both urban and rural areas. Large cities and smaller towns are fast becoming home to the world’s largest slums with Asia home to 61 percent of the world’s 828 million slum dwellers, Africa 25.5 percent and Latin America 13.4 percent.

The developing world’s urban centers are expected to burgeon, drawing 96 percent of the additional 1.4 billion people by 2030. To cope with urban growth, a coordinated package of essential infrastructure and services is needed. Only by meeting essential needs related to transportation, housing, water and sanitation as well as education and healthcare can cities avoid becoming hubs of poverty and squalor, the report says.

“Agglomeration, or the clustering of people and economic activity, is an important driver of development and evidence suggests that it can have high pay offs, particularly for countries on the lower rungs of development,” said Lynge Nielsen, Senior Economist in IMF’s Strategy, Policy and Review Department and co-author of the GMR.

At the same time, stepped up efforts are also needed to improve development in rural areas, where 76 percent of the developing world’s 1.2 billion poor live, with inadequate access to the basic amenities defined by the MDGs.

Rural poverty rates far exceed those of urban areas across all regions of the world. The report further finds that rural women are hurt the most by poor infrastructure, because they perform most of the domestic chores and often walk long distances to have access to clean water, and lower levels of education attainment.

Although tackling rural development challenges will not be easy, it can be done with complementary rural-urban development policies and actions by governments to facilitate a healthy move toward cities without short-changing rural areas, says the report.

“Urbanization does matter. However, in order to harness the economic and social benefits of urbanization, policy-makers must plan for efficient land-use, match population densities with the required needs for transport, housing and other infrastructure, and arrange the financing needed for such urban development programs,” said Jos Verbeek, Lead Economist at the World Bank and lead author of the GMR.

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Tom Hiddleston`s action against poverty

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Actor Tom Hiddleston has vowed to live on less than a pound a day for an entire week to support a Unicef campaign against poverty. The 32-year-old later took to Twitter and urged fans to join him in the cause, reports dailystar. "(This week) I start living below the line to help Unicef stop children suffering from hunger. Take the challenge too. The World Bank defines poverty as living on less than 1 pound a day. "The challenge is to buy all the food and drink you need to survive for five days with just 5 pounds (one pound per day)," Hiddleston posted on Twitter.

IANS

Source: zeenews.india

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Help shrinks as poverty spikes in the US

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He's a success story for Catholic Charities of Baltimore, one of a multitude of organizations trying to haul people out of poverty in this Maryland port city where one of four residents is considered poor by U.S. government standards.

Hammond says he ended up in Baltimore three years ago, addicted to crack cocaine and snorting heroin, living in abandoned buildings where "the rats were fierce," and financing his addiction by breaking into cars and stealing copper pipes out of crumbing structures. Eighteen months after finding his way to Catholic Charities via a rehabilitation center, the 49-year-old Philadelphia native is back in the work force, clean of drugs, earning $13 an hour cleaning laboratories for the Biotech Institute of Maryland and paying taxes.

Catholic Charities, which runs a number of federally funded programs, spent $18,000 from privately donated funds to turn around Hammond's life through the organization's Christopher's Place program which provides housing and support services to recovering addicts and former prisoners. Such success stories are in danger as $85 billion in federal government spending cuts begin squeezing services for the poor nationwide. The cuts started kicking in automatically on March 1 after feuding Democrats and Republicans failed to agree on a better plan for addressing the national deficit. They are hitting at a time of spiking poverty as the U.S. slowly climbs out of the deepest economic downturn since the Great Depression of the 1930s.

"All I wanted to do was get high," Hammond said. "I didn't even know any more how to eat or clean myself." Now he lives with two other men in housing subsidized by the charity, got his driver's license and bought a car. What he marvels at the most is that he has been accepted after a 20-year absence by some of his nine children. That's the best part, he said. "At least I know now they might not hate me."The U.S. Census Bureau puts the number of Americans in poverty at levels not seen since the mid-1960s when President Lyndon B. Johnson launched the federal government's so-called War on Poverty. As President Barack Obama began his second term in January, nearly 50 million Americans — one in six — were living below the income line that defines poverty, according to the bureau. A family of four that earns less than $23,021 a year is listed as living in poverty. The bureau said 20 percent of the country's children are poor.

Although it is far from the country's poorest city, Baltimore's poverty rate far outstrips the national average of one in six. Catholic Charities of Baltimore is a conduit for state and federal money for programs designed to help the poor. The charity plays a major role in administering Head Start, a federal program that provides educational services for low-income pre-school children and frees single mothers to find work without the huge expense of childcare. The spending cuts, known as the sequester, are going to hit Head Start especially hard. "Before the sequester only half of the need was being met. Now, after the cuts fully take effect, there will be 900 children already in the program who won't be able to take part," said William McCarthy, executive director of Catholic Charities.

There is no question the national belt-tightening "will deepen and increase poverty," said McCarthy, citing the cuts in long-term care for poor seniors including assisted living and nursing care, and fewer low-income housing spaces, among other ripple effects. Under the spending cuts, Baltimore Housing Commissioner Paul T. Graziano said his agency faces a $25 million shortfall in funds to help poor people with housing. There are 35,000 people on the waiting list. He also lamented cuts that will hamper the city's efforts to clean up or demolish blighted neighborhoods. Baltimore has 15,000 vacant and abandoned structures as a result of a steep population decline over the past half century.

"It's very, very disheartening. We take a couple of steps forward and then fall back at least one. The private sector isn't going to fix these neighborhoods. I view these things as investments, not expenditures. These things are an investment in the future that bring returns many times over," he said. While the U.S. economy is slowly recovering, improvements for those deep in poverty do not keep pace with the cuts now in place. The spending reductions going into effect will hit hardest at Americans whose prospects are not directly tied to the economy — people like Antonio Hammond and children in the Head Start pre-school programs.

Mayor Stephanie Rawlings-Blake said Baltimore depends on federal grants and funding for 12 percent of its budget. The austerity cuts "to housing programs_as well as those to public safety, health, and education_will have an adverse effect on Baltimore and throughout the country," she said. The cuts, which will also hit U.S. defense spending, were designed two years ago as an incentive for lawmakers to avoid a standoff over the federal debt and a potential government shutdown. The measures were seen as so onerous as to force Republicans and Democrats in Congress to reach a compromise spending plan. But compromise proved impossible before the March 1 deadline, and what were once seen as unthinkable cuts automatically went into effect.

Democrats want a deficit reduction plan that includes some spending cuts and tax increases on the wealthy. Republicans balk at any more tax increases and insist the problem should be addressed solely by reigning in spending. That feud continues as the two sides battle out future fiscal issues.
Republicans want to see even more cuts in next year's budget, reductions that would, by and large, return military spending to pre-sequester levels and provide big tax benefits to wealthy Americans.

A 2014 budget plan proposed by Rep. Paul Ryan, the vice presidential candidate on the unsuccessful Republican presidential ticket last year, would be particularly tough on social safety net programs. His plan would slash $135 billion over the next decade from the program that provides food aid for low-income Americans. Nearly three-quarters of households receiving help from the program include children, who, census figures show, are the group hardest hit by poverty.

Ryan's plan would also turn the government's Medicare health insurance program for Americans age 65 and over into a voucher system, providing direct government payments to seniors who would then try to buy insurance on the private market. Ryan defends his drive for austerity as necessary to begin shrinking the country's $16 trillion national debt.

"If we never balance the budget, if we keep adding deficit upon deficit we have a debt crisis like Europe has. That means seniors lose their health care benefit, that means the people in the safety net see the net cut and they go in the street. That means you have a recession. These are the things we prevent from happening by balancing the budget. Balancing the budget is but a means to an end. It's growing the economy, it's creating opportunity, it's getting government to live within its means," he said in an interview with Fox News.

Obama backs increasing taxes on the wealthy while instituting smaller government spending cuts, a plan that would reduce deficit spending but more slowly. He and most fellow Democrats argue that European-style austerity has not worked there and will harm the U.S. recovery from the Great Recession.
It's an ideological fight that dates back decades. Republicans work from the premise that by unleashing the private sector and removing government controls, all Americans will prosper along with the economy and benefits will flow down to lower-income earners. Democrats insist there is an essential role for government in putting a floor under the poor and helping local governments with problems that the private sector cannot or will not shoulder.

Some worry the gap between rich and poor in the U.S. will keep widening under the austerity measures.
According to a report by the non-partisan Congressional Research Service late last year, "U.S. income distribution appears to be among the most unequal of all major industrialized countries and the United States appears to be among the nations experiencing the greatest increases in measures of income."
Mary Anne O'Donnell, director of community services at Catholic Charities of Baltimore, said increasing income inequality has shown itself dramatically during the U.S. downturn.

"In the last three years, there's been a great change in the kinds of people we are serving. There are increasing numbers of people who owned a home, lost their jobs, end up living in their car and are coming with children to our soup kitchen," she said.

Her organization spent $126 million in the last fiscal year feeding the poor, helping them find jobs and housing, running nursing homes and putting men like Hammond back on their feet. Of that figure, $98 million came from various programs funded by the city, state and federal governments. Those now face the big cuts as politicians in Washington fail to find a compromise.

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Tunisia needs new economic model to end poverty

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TUNIS - Tunisia must find a new economic model to raise the roughly 20 percent of its people living in poverty from their quagmire, President Moncef Marzouki said on Saturday. "The objective is liberate from poverty two million Tunisians over the course of the next five years," Marzouki told a meeting of the World Social Forum, an anti-globalisation group that wrapped its first-ever meeting in an Arab country. Marzouki did not spell out just what he envisioned, but said that "to believe that the market economy, liberal or neo-liberal, will pull Tunisians out of poverty is... a false and stale idea."

He said Tunisia, which emerged from decades of dictatorship with the overthrow two years ago of president Zine El Abidine Ben Ali, needs "a new approach decoupled from the old model of development."The country is plagued by unemployment and riven by often deadly social unrest. Without their economic and social rights being fulfilled, the liberties they acquired would be "without value," Marzouki said, adding that if a solution is not found, the country could be driven back into dictatorship.

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Brazil shows how to fight poverty

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More than 20 percent people on Earth live in extreme poverty and are enduring inhuman sufferings, according to the World Bank. Combating extreme poverty is the aim of the entire development community, and the same goal has been embraced by many World Bank presidents.

The World Bank's new president, Jim Yong Kim, has spoken of the need to "bend the arc of history in order to eliminate extreme poverty and achieve shared prosperity". At a time when the World Bank's resources and the budgetary resources of governments around the world are more limited than Kim might wish for, Brazil offers important lessons on how to eliminate extreme poverty and reduce inequality.

Perhaps the biggest lesson to be learned from Brazil is that poverty can be reduced in a very cost-effective way, that is, if the programs pursued are targeted well.

My home country (Brazil) has long been known for having one of the most unequal income distributions on the planet. And it has often been cast as a "country of the future", a place where the poor rarely saw the benefits of industrialization and economic growth. This changed when Lula da Silva was elected president in 2002. He ran on a platform not only to boost social and economic inclusion, and fight poverty and inequality, but also to achieve that goal within a single generation.

Building on the economic basis established under his predecessor, Fernando Henrique Cardoso, Lula's strategy was not at all aimed at doing the typical politician's thing - to spend more on social programs. Instead, as a man who had experienced poverty first-hand, he made the fight against poverty and inequality the central organizing principle of his entire presidency. In fact, all other government policymaking areas were of secondary importance, in the sense that they had to support his main policy plank.

Initially, the financial markets did not welcome Lula's program. They were worried that his commitment to what they perceived as a utopia would make him implement irresponsible, populist, and unsustainable policies. They were wrong.

There were plenty of doubters within Brazil as well. They were convinced that, after 500 years of exclusion and inequality in Brazil, bending the arc of history would certainly take far more than a single generation. They, too, were wrong.

By the end of Lula's two terms as president, Brazil's results were already impressive. Income inequality, measured by the Gini coefficient, had declined from 0.553 in 2002 to 0.500 in 2011. Household per capita income had increased by 27 percent from 2003 to 2011. And the unemployment rate had fallen from 9.1 percent in 2002 to 6.8 percent in 2011.

When President Dilma Roussef, Lula's former chief of staff, was elected as Lula's successor, she upped the ante, running on a platform to eliminate extreme poverty not in a generation, but in just five years.

The world of politics is full of skepticism, if not cynicism. Considering the lofty speeches by endless number of politicians (usually without ever intending to meet them or coming close to meeting them), there is good reason for doubt. And yet, in Brazil's case, the target of eliminating extreme poverty is surprisingly close to being achieved. The reform agenda's cornerstone was a determined expansion of the social protection programs by ensuring that all poor households in the country were reached.

The two key programs are Bolsa Familia (a conditional cash transfer program that aims at raising the income of the poorest families while promoting health and education among them) and Brasil sem Misria (an extension of Bolsa Familia that targets people living in extreme poverty, with provisions for including them in the productive sector and giving them access to public services). The per capita transfer at present is 70 Brazilian real ($35) a month.

The two programs now cover all Brazilians listed in the national database that is used to manage and monitor the country's social programs. About 700,000 people, however, do not receive payment from either of the support programs and are still living under the poverty line, because they have not been included in the registry (Brazil is a continent-sized nation, with an area of 8.5 million of square kilometers, and some of the extreme poor live in isolated areas).

When it comes to development challenges, most people believe that despite being a moral obligation, poverty alleviation is an expensive proposition and, even if started, successfully, it may not be sustainable financially. Brazil's case shows it need not be so.

The cost of Bolsa Familia has been extremely low. In 2012, the program cost the Brazilian government less than 1 percent of its budget.

On the social front, the results are remarkable. While much more needs to be done, Brazil has seen a marked decline in violence and an increase in political activism and cultural movements. In many urban areas, ambitious programs have been launched to "pacify" areas previously associated with drug trafficking and violence.

A key part of the improved environment is that the urban poor now have a sense of destiny and direction. They welcome the government's focus on investment in families' future, especially the focus on the young and their education.

There is now a quiet confidence in the eyes of young children living in favelas (shanty towns). Without knowing it, they can sense that their government is giving them a true head start.

The real fruits to be harvested from the Bolsa Familia may still be a generation away. But in Brazil you have a rigorously implemented social program that has nothing to do with consumption and the usual instant-gratification handouts, which too many politicians over the world - and not just in poor countries - like to specialize in.

The author is executive director for Brazil, Colombia, the Dominican Republic, Ecuador, Haiti, Panama, the Philippines, Suriname, and Trinidad & Tobago in the World Bank Group and a contributor to The Globalist.com. The opinions expressed here are those of the author's own, and do not necessarily represent those of the Brazilian authorities or senior management of the World Bank Group.

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Poverty decreases sharply in developing world

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Up to 80 per cent of the world’s middle classes will live in developing countries by 2030 thanks to surprising recent gains in poverty reduction, according to a United Nations report published on Thursday. “Never in history have the living conditions and prospects of so many people changed so dramatically and so fast,” concludes the UN’s latest Development Report. “The world is witnessing an epochal ‘global rebalancing’.”

This year’s report, launched in Mexico City, says higher economic growth in at least 40 developing countries has helped lift hundreds of millions of people from poverty, and pushed billions more into a new global middle class. In an interview with the Financial Times, Helen Clark, UN Development Programme administrator, called such progress an “incredible success of emerging markets”, praising them for accompanying faster rates of economic growth with pragmatic policies to help the poor.

“These countries opened up to foreign direct investment and prioritised infrastructure but also invested in their people,” she said. “They targeted education and health, and put social floors in place.”Underpinning the improvements in the human development index (HDI) was rapid growth in countries such as China, India and Brazil, with China and India having doubled per capita economic output in less than 20 years.
But the study stressed that growth and improvements in HDI spread far beyond the four Bric countries of Brazil, Russia, India and China, and included at least 40 countries that had accompanied greater economic dynamism with effective poverty-reduction policies.

Afghanistan, Sierra Leone, Ethiopia, Rwanda and Angola were among 14 countries that have recorded gains in HDI of more than 2 per cent a year since 2000. Partly as a result, the report found that worldwide extreme income poverty has plunged from 43 per cent in 1990 to just 22 per cent in 2008, including more than 500m being lifted out of poverty in China alone.

The report stated that such gains had already helped the world achieve the main poverty eradication goal of the so-called Millennium Development Goals, which called for the share of people living on less than $1.25 a day to be cut by half from 1990 to 2015.

Underpinning this poverty reduction was developing countries’ increasing share of global trade, which grew from 25 per cent to 47 per cent between 1980 and 2010. “The south as a whole is driving global economic growth and societal change for the first time in centuries,” says the report.

The report found that trade among developing countries was the biggest factor in that expansion, increasing from less than 10 per cent of total global trade to more than 30 per cent. “Trade between countries in the south will overtake that between developed nations,” the report said.

The 2013 report also includes the so-called gender inequality index, an experimental index designed to measure gender inequalities along the lines of national data on reproductive health, women’s empowerment and labour market participation. The Netherlands, Sweden and Denmark topped the index while sub-Saharan Africa, south Asia and the Arab states showed the greatest levels of gender inequality.

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