Global Poverty

1. Global Poverty
Allison Zellers
“Human development is about much more than the rise or fall of
national incomes. It is about creating an environment in which
people can develop their full potential and lead productive, creative
lives in accord with their needs and interests. People are the real
wealth of nations. Development is thus about expanding the
choices people have to lead lives that they value. And it is thus
about much more than economic growth, which is only a means- if
a very important one- of enlarging people’s choices.”
—Human Development Reports, United Nations
Development Program

2. What is Poverty?
One of the central challenges in
today’s economy and society that
demands our immediate attention
UN’s World Summit on Social
Development (1995):
The ‘Copenhagen Declaration’
described poverty as “…a condition
characterized by severe deprivation
of basic human needs, including
food, safe, drinking water,
sanitation facilities, health, shelter,
education, and information.”

3. Definitions of Poverty
Social Definition of Poverty
Lacking essential items: food, clothing, water, shelter, education, access
to health care
Statistical Definitions of Poverty: consumption vs. income
Relative Poverty: the extent of poverty in individual countries; entire
population is ranked in order of income per capita.
The bottom 10% considered ‘poor’ or ‘impoverished’
Absolute Poverty: sets ‘poverty line’ at certain income or consumption
amount per year, based on the estimated value of a ‘basket of goods’
(food, shelter, water, etc.) necessary for proper living
Used for developing countries where majority survives with the bare
minimum or less
Global Poverty: Line first created in 1990; set at $2/day or less
(Extreme Poverty- $1/day or less)
More developed countries- set higher (i.e. 2005 line in US: $26.19 a day)

4. How is it measured?
Poverty lines separating the poor from the non-poor: Relative or Absolute
Non-Monetary dimensions of well-being:
Health/Nutrition: nutritional status of children, incidence of disease, life
expectancy
Education: literacy levels, specific test scores, years of schooling
Composite indices: income, health, assets, education all considered
Subjective perceptions: question households about their perceived
situations, minimum standards, and poverty rankings in community
Monetary dimensions: use consumption as better indicator than income
Easier/more reliable to estimate; Better picture of standards of living
The poverty measure: statistical function translating comparison of well-being
indicator and poverty line into one aggregate number for a part or whole of
the population
Incidence of poverty: those whose income and consumption are below the
poverty line
Depth of poverty (poverty gap): total resources needed to meet needs
of certain individuals below the line (divided by total population)
Poverty severity (squared poverty gap): inequality among
the poor (with higher weight placed on those further away from line)
Vulnerability: probability/risk of being or falling deeper into poverty
Different Levels: non, transiently, chronically, and persistently poor

5. Poverty Statistics
2001: 1.1 billion people with incomes
less than $1/day and 2.7 billion people
with incomes less than $2/day
August 2008: World Bank presented a
major overhaul to their estimates of
global poverty with better and new data
Higher than past estimates due to
underestimated cost of living in
developing countries
International Poverty Line: changed
from $1 a day to $1.25 a day; $2 to
$2.50 (due to inflation)
With revised $1.25/day:
1.4 billion: live at poverty line or
below
110 million children: out of school
31 million: infected with HIV/AIDS
At least 80% of humanity: live on less
than $10/day
95% of them in developing countries
Almost half the world (over 3 billion):
still less than $2.50/day
These figures do not reflect the recent
global food crisis and rising cost of
energy: could bring another 100
million into poverty

6. Unequal Distribution of Wealth
Poorest 40% of world population consumes 5 % of global income/ The richest 20%
consumes 75% of global income
Industrialized nations: do not have as many in absolute poverty but relative poverty/inequality is high
Organization for Economic and Cooperative Development (Oct. 2008): Stated that the gap
between rich/poor has grown in more than 75% of wealthy countries since the mid-1980s
Canada, Germany, Norway, and U.S. are most affected (Greece/UK have shrinking gaps)
Worst countries: Mexico: rich/poor income ratio is 25/1, Turkey: 17/1, US: 16/1 (plus Portugal
and Poland)
Hardest hit sector: children/young adults have poverty rates around 25% higher than population
average
“The widening gaps between rich
and poor within nations is
morally outrageous, economically
wasteful, and potentially socially
explosive”
- Michel Camdessus, former
head of the International
Monetary Fund

7. Causes of Poverty
Insecurities: Based on UN’s Universal Declaration of Human Rights
(1948)
Economic- poor markets/jobs difficult to access
Education- limited access/no information about improving quality of
life
Poor health- inadequate nutrition/hygiene/health services
Unforeseen events- 73% of poorest billion people have lived
through or are involved in violent conflict; natural disasters; global
warming
Structural Influences: Major factors
“Corporate Globalization”: wealthier companies/nations are able to
determine rules, shape the international institutions, and influence
communication mechanisms that disseminate information to people.
Powerful subjugating the poor: protect their “national interests”
while exploiting others
Corrupt governments: Democracies with limited economic
choices/Local political groups in Third World purchasing
loyalty
Violent oppression from ruling elites if they are threatened
Unequal access to trade, land, and resources: “flood up” vs.
“trickle down”
Global economic model: rapid flow of capital is mainly borne by
poor
All of these factors: make shocks harder/more impossible for people to
break out of poverty and reduce dependency on IMF and World Bank

8. How to Reduce Poverty?
Those above the poverty level: insist that they are honest and productive
Industrialized nations: Don’t recognize that they have 30-70% more workers than is
necessary in the workforce or that the displaced should have an equal share of
jobs/income
Cold War Period: poorer country governments failed to improve the poor’s situation due
to the risk of looking communist, facing external pressures, external meddling in
international affairs, or even military intervention
Overseas Development Institute (ODI): Described poverty reduction as a twin function
of the rate of growth and changes in income distribution
Differing Views of Wealthy Nations:
Political Left: inequality is a matter of moral obligation and social justice in order to
avoid a weakening society
Political Right: inequality has already been overcome; it is the responsibility of
individuals to help themselves (US: one of the worst inequality levels)
Underlying theme of both: Social cohesion is at risk

9. Reductions: What Can Be Done?
In general: Establish strong institutions, non-corrupt democracies, an impartial
media, equitable distribution of land, and well-structured judicial system
Address poverty at different levels:
Country Level: Directly affects lives of the poor
Focus on Opportunity for all, Voice in decision making, Protection
from shocks
Policies for low inflation, realistic/stable exchange rates, effective
integration into the global economy and private sector
Investments in adequate schooling/skill development, secured nutrition,
preventive health care, rural infrastructure, and credit
Resources toward priority areas/avoiding unproductive spending
Social protection in times of local/national crises
Global Level: Factors of globalization, commodity prices, availability of
knowledge, and flow of capital
Steady global economic expansion to provide demand
conditions for developing countries
Research/dissemination of vaccines for diseases
(HIV/AIDS, TB, malaria, etc.)
Assist with agricultural advances for tropical and
semi-arid conditions
Demilitarization, demobilization, and rehabilitation
Debt relief to the poorest countries: Global financial and
economic stability

10. Proposals to Ponder: Global Issues
Humanitarian Aid/Debt Relief: Jeffrey Sachs
Doubling global international assistance to $160 billion (0.5% GNP of rich countries)
This figure will grow to 0.7% by 2015
How Realistic is this? Is foreign aid money lost?
Getting rid of the ideology of Development: William Easterly
Outdated and cannot offer a comprehensive final answer to all of society’s problems
Supports world goals vs. autonomies of individual societies- needs to change
Should individual governments be free to use time-tested ideas to find their own success?
Grameen Bank: Muhammed Yunus
1983: New bank for very poorest of borrowers- required no collateral
Two members at a time had to repay loans
1999: 2.4 million borrowers/ 94% of them were women
5% of members rise above the poverty level each year (125,000 families)
Is self-employment the only solution to realize potential?
“Environmentally friendly” companies: Tom Knudson
For example, Starbucks growing coffee beans in Ethiopia
With motto of “Good coffee, doing good”, using painted vs. real images
Deforestation, Family income: 66 cents/day,
Selective and ineffective health care, No Land Use Policy
Should we value our coffee over the quality of human life?

11. Current Trends In Poverty
Proportion of people living in poverty: went
from 29 % in 1987 to 26 % in 1998 (total #:
still 1.2 billion)
Reduction in incidence of global poverty:
due to progress in East Asia (especially
China)
2005- Poverty rate fell by over 600
million
Although reversed during the recent
Asian economic/environmental crisis
Moderate/no declines:
Sub-Saharan Africa: HIGHEST
INCIDENCE IN WORLD- additional 74
million poor (total of 291 million)
Latin America: from 64 to 78 million
South Asia: 522 million
Eastern Europe/Central Asia: from 2 to
5 % (24 million people)
Today's poor: primarily in rural areas and
urban sector
Pressures from both areas: Life more insecure
Women/girls are most affected
Africa: may be the only continent where
problems of poverty, urban as well as rural,
will continue to worsen

12. United Nations Efforts
2000- Main Millennium Development Goal was to reduce extreme poverty by half by 2015
Establish universal primary education, reduce mortality rates for infants/children under 5
and mothers, provide access to reproductive health services, reverse loss of environmental
resources globally/nationally
Malaria Prevention, Lower Disease Death, Increase developing countries share of export earnings
Problems: Global Economic Slowdown, Food Security Crisis, Global Warming, Overpopulation
Green Revolution: some transformation with improved food security and higher incomes, but the
highest incidence of poverty still remains in the rural sector
Poverty Reduction: more effective when strategies fully owned by government and society at large
Donors supporting country's strategy rather than follow their own visions of development

13. Millennium Development Goals: Will
we meet them before 2015?
2005: US was one of the lowest donor nations with only 0.21%
of GNP given to foreign aid
The Global Poverty Act (2007): reduce by 50% the proportion of
people worldwide, who live on less than $1 per day between 1990 and
2015
Landmark: MDG included in U.S. Law
Would add 0.7% of the U.S. GNP (to overall spending on
humanitarian aid)
Reported/Passed in February 2008 but no law
As of March 2009: still 1/6
th
of world population living on less than
$2/day
Progress halted because of food and financial crisis
Worst Factor: Maternal Health (due to PTSD, suicide, depression,
psychiatric disorders, etcetera)

14. In Recent News…
April 23, 2009: Meeting of the 24th General Assembly of the Council of the
European Municipalities and Regions called for a stronger voice for local
governments in the fight against poverty and for achievement of the MDGs
European delegates pledged to redouble their campaigning/awareness-raising efforts
April 29, 2009: At the IMF/World Bank meetings, ministers urged donors to accelerate
delivery of aid and go beyond existing commitments
World Bank President Robert Zoellick warned that most of the MDG’s on poverty,
hunger, education, equality, disease, and infant mortality were in jeopardy
Global Monitoring Report 2009: Estimated that an additional 55-90 million people will
be trapped in extreme poverty in 2009 due to worldwide recession/ over 1 billion will
be chronically hungry
World Health Organization: Swine flu has the potential to become a global pandemic
and further impact the ability of countries to achieve the MDG’s
May 1, 2009: US Progress Report states that the Obama Administration strongly
promotes the UN MDG’s as the internationally agreed framework for spurring increased
global development.
Top priorities: address problems of climate change and the global financial crisis
Conferences in June and September to develop agreements on these issues
Achieving the Millennium Development Goals

15. Hope for the Future
Poverty: unacceptable human condition
but doesn’t have to be inevitable
Main goal of development: eliminate
poverty and reduce social imbalances
Achievement of the MDG’s may be
growing elusive, but they are still within
our reach
Now more important than ever that
local authorities unite their voices to
put pressure on national governments
and define concrete ways to
strengthen their role in the fight
against poverty
Ensure sustainable economic growth,
cohesion, and stability for humanity at
large
The Mobilization to End Poverty
“Ours is the generation that can achieve the
development goals and free our fellow men,
women and children from the abject and
dehumanizing conditions of extreme poverty.”
– Report of the Secretary-General on
the Work of the Organization,
2007

17. References
 Sachs, Jeffrey (2005). “Can Extreme Poverty Be Eliminated?”. Global Issues,
3,12-16.
 Easterly, William (2007). “The Ideology of Development”. Global Issues,
4,17-19.
 Knudson, Tom (2007). “Promises and Poverty”. Global Issues, 20, 86-91.
 Yunnus, Muhammad (1999). “The Grameen Bank”. Global Issues, 36, 157-160.
 http://www.globalissues.org/article/26/poverty-facts-and-stats
 http://econ.worldbank.org/external/default/main?pagePK=64165259&piPK=64165421&theSitePK=469372&menuPK=64166093&entityID=000158349_20080826113239
 http://www.worldbank.org/html/extdr/extme/G8_poverty2000.pdf
 http://www.usccb.org/sdwp/globalpoverty/ccgp_issues_peace.shtml
 http://library.thinkquest.org/05aug/00282/over_whatis.htm
 http://www.endpoverty2015.org/north-america/news/highlights-us-progress-report/01/may/09