Jim Yong Kim, then President of the World Bank, said in 2018, “Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time.”
This putative victory over global poverty has been celebrated continuously over the last decade by world leaders, businessmen and policy-makers. However, the outgoing UN Special Rapporteur on Extreme Poverty and Human Rights, Professor Philip Alston, in his final report has presented a scathing critique of this celebration, questioning the poverty alleviation efforts at the UN and the World Bank. According to the report, global poverty instead of declining has seen a continuous rise.
He writes, “By single-mindedly focusing on the World Bank’s flawed international poverty line, the international community mistakenly gauges progress in eliminating poverty by reference to a standard of miserable subsistence rather than an even minimally adequate standard of living.”
Thus, by questioning the poverty line, Professor Alston has brought under suspicion the magic number often relied on by the global elite to gloat that humanity has never been happier. Further, he has also implicated the Sustainable Development Goals (SDG), which form the crux of the developmental aspirations of the global community. He argues that the goals lack ambition and settle for much lesser than is possible. For example, SDG 1 targets to reduce the proportion of people living in poverty by just half, which is unjustified in an era of unparalleled prosperity and inequality. With respect to social protection, SDG 1 merely aims for a vague “substantial” coverage under social protection systems, as against providing for universal coverage through social protection floors.
This timely report, I argue, has reaffirmed the auxiliary statistics, all of which point towards rising poverty. Take for example the number of workers in the informal economy. High levels of informality are associated with extreme poverty, low wages and lack of social security. Hence, reducing levels of poverty are expected to be accompanied by the formalization of work. Albeit, that has not happened. Reports have shown that informality in the global south has been gradually expanding.
As per the ILO, 68.2 percent of the employed population in Asia-Pacific and 85.8 percent in Africa continue to remain engaged in the informal economy. The same trend can also be gauged from the continued deceleration in the growth of real wages, another sign of mass prosperity. The global growth rate, which was at over 3 percent before 2008, has come down to a meagre 1.8 percent in 2017. If China is excluded this falls down to 1.1 percent. Lack of wage growth is exacerbated by the lack of well-paying jobs. As per the world bank, the job challenge in the global south is bigger than ever, with over 60 crore people looking for jobs.
All of this has culminated into a declining share for labour in global income. Today, the working class people in developing economies corner merely 37.5 percent of total income compared to the 50 percent they did in the 1990s. These indicators tell us that the majority of the people, across the globe and especially in the global south, are earning lesser than they did a decade back, even as countries continue to grow.
In such a scenario, relying on a poverty line, which is based on the barest minimum calorie count, to define poverty levels may hide more than it tells. For example, it tells us nothing about access to healthcare, housing, sanitation, education and drinking water: aspects which we would consider as basic to humans. In fact, if we were to increase the poverty line to a fairer standard of $5.5 (Rs 413), we would find that the number of people under poverty has remained more or less stagnant, decreasing negligibly from 3.5 to 3.4 billion.
The result of reliance on such misleading statistics and underwhelming ambition is a complete slowdown in legislative and policy reforms. Poverty alleviation is intrinsically connected to good governance, which has failed to take off. In Africa, according to Freedom House, there has been a continuous deterioration in governance since 2005. Corruption too, as per the Control of Corruption Index, has seen steep increases in many regions since the 2000s, including in South-Asia and Africa. The only check on such global deterioration in governance can be a strict and implementable global poverty eradication treaty, which has not yet been realised. The last significant development in the international arena, as far as social welfare and poverty go, was the creation of the Sustainable Development Goals in 2015.
However, the drafters of the SDG agenda explicitly ruled out putting in place monitoring and accountability frameworks. The implementation of agenda goals is voluntary in nature, with only a High-level political forum overseeing the progress. This forum meets for eight days each year, spending a grand-total of 23 hours reviewing the voluntary national reviews of 47 states.
The impact of such complacency is apparent during the ongoing pandemic. As per Alston, “COVID-19 is projected to push hundreds of millions into unemployment and poverty, while increasing the number at risk of acute hunger by more than 250 million. But the international community’s abysmal record on tackling poverty, inequality and disregard for human life far precede this pandemic”.
Going ahead, nations and institutions must shift their focus away from magic numbers, whether it be the Poverty Line or the GDP, as they are deceptive and easy to manipulate. Rather, the focus at both national and international level should be on aggressive reforms in reducing inequality, creating employment, implementing universal social protection floors and promoting good governance.