[APCPress] Poverty is not decreasing as the World Bank claims

[Karen Higgs]

Social Watch launches 2008 Basic Capabilities Index (BCI)

Complete information available at:
www.socialwatch.org/en/avancesyRetrocesos/ICB_2008/index.htm


PRESS RELEASE

Poverty is not decreasing as the World Bank claims,
argues a civil society monitoring organization

New York, September 22 – On the eve of a UN presidential meeting on
poverty reduction the mainstream consensus that globalization is 
reducing poverty around the world was challenged today by Social Watch, 
a network of 400 civil society organizations in 70 countries. The World 
Bank latest estimates, announced last August, claim that extreme poverty 
has been reduced by half in the last 25 years and that therefore the
internationally agreed goals for 2015 can be met.

Social Watch published today a Basic Capabilities Index showing that 
since the UN Millennium Declaration was adopted in the year 2000, the
satisfaction of basic social needs that characterize poverty situations 
is not progressing enough or even regressing in a majority of countries.

In the Millennium Declaration the heads of State and government of the
world promised to “spare no effort to free our fellow men, women and
children from the abject and dehumanizing conditions of extreme poverty,
to which more than a billion of them are currently subjected”, and
resolved therefore “to halve, by the year 2015, the proportion of the
world’s people whose income is less than one dollar a day”. This
commitment is the first of eight Millennium Development Goals.

The Basic Capabilities Index, made public today by Social Watch, 
provides a consistent general overview of the health status and basic 
educational performance of each country and is proven to be in close 
correlation to the measurement of other capabilities related to 
countries’ social development. Out of 176 countries for which Social 
Watch computed a BCI figure, only 21 register noticeable progress in 
relation to how they were in 2000. Other 55 countries show progress that 
is slight and slow, while 77 countries are stagnant.

UN Secretary-General Ban Ki-moon has highlighted that “the MDGs set
time-bound targets, by which progress can be measured.”

The measurability of the MDGs is key to their success. Same as the 
Olympic Games base their appeal in the simple notion that all players 
abide by the same rule and a set of impartial referees and scorekeepers 
guard the integrity of “fair play”, the MDGs derive their capacity to 
motivate decision-makers and mobilize public support in their being 
time-bound and measurable.

In order to monitor progress towards the MDGs at a global level and
country by country, the eight goals were subdivided in 48 indicators,
ranging from the proportion of the population below USD 1 a day 
(adjusted by the purchasing power parity of their income) to the 
percentage  of internet users. Since January 15, 2008 the list of 
indicators has been officially expanded to more than 60, so as to be 
able to include data on issues like employment that were not counted before.

In real life, though, for most of the developing countries there are no
accurate or updated data for many, if not most, of those 60 indicators,
and the set is too complicated for non-experts. Thus, the World
Bank-defined poverty line of USD 1 a day became the de facto yardstick
with which progress was being measured. In 2000 the figure of 1.2 
billion people living in poverty was massively circulated and quoted 
indirectly by the heads of state themselves in the Millennium 
Declaration: “We will spare no effort to free our fellow men, women and 
children from the abject and dehumanizing conditions of extreme poverty, 
to which more than a billion of them are currently subjected.”

By October 2007 the number of people living in extreme poverty had been
reduced substantially: “Nearly one billion people live on just USD 1 a
day” said World Bank President Robert B. Zoelick in his address to the
Board of Governors of his institution. By June 2008, the draft Accra
Action Agenda on aid, authored mainly by donor governments and the
secretariats of the World Bank and the OECD stated that “progress has 
been made. Fifteen years ago, one of every three people lived on less 
than one dollar a day; today, that figure has been reduced to one in 
five. Yet one billion people still live in extreme poverty”.

All of a sudden, in August 26, 2008 the World Bank announced that 
poverty estimates had been revised and the number of extremely poor 
people was actually 1.4 billion in 2005. An overnight increase of almost 
50%! Yet, according to Martin Ravallion, director of the Bank’s Research 
Group, “the developing world is poorer than we thought but no less 
successful in the fight against poverty”. In order to substantiate such 
an optimistic view, the team led by Ravallion and Shaohua Chen revised 
the poverty figures all the way back to 1981 and claimed the previous 
estimates were mistaken. According to their reassessment, the proportion 
of poor people has been cut to half in the last 25 years and, therefore, 
it can still be reduced enough to meet the MDG number 1 by 2015.

Social Watch coordinator Roberto Bissio argues that the USD 1 a day
indicator is the wrong indicator. But “even if the concept behind that
indicator had been right, we know now that the estimates were wrong. And
even if the new estimates and their recalculated history are right, the
trend of the last years is not a forecast of the future”. The World Bank
has indeed recognized that its August estimates “do not yet reflect the
potentially large adverse effects on poor people of rising food and fuel
prices since 2005”.

Using three simple indicators available for most countries in the world
and averaging them in a way that any secondary school student can 
repeat, the national and international trends in the fight against 
poverty can easily and convincingly be assessed. The resulting picture 
is not rosy. “Policy makers need to understand that the credibility of 
their commitments relies, like in the Olympic Games, in honest 
scorekeeping, independent referees and rules that do not change in the 
middle of the game. An adverse half time result might be bad news for 
the coach, but it allows a change of strategies for the second half”, 
concludes Bissio.

Complete information available at:

www.socialwatch.org/en/avancesyRetrocesos/ICB_2008/index.htm

For more information contact/spokesperson

Roberto Bissio
Social Watch Coordinator
Mobile: +336 219 83661
E-mail: socwatch at socialwatch.org
www.socialwatch.org


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