How poor is ‘poor’?

Priya Tuli   |  Wed, 05/20/2009 3:47 PM  |  Reflection

I was butting heads the other day with someone for whom I have little patience or respect, who keeps bleating on about what a tough time they’re having, despite enjoying a highly privileged expat existence. We all know someone like this, who moans about everyone and everything in sight, when they actually have it pretty damn good in every way.

Unlike the gardener whose wife just had surgery that cost him Rp 2 million, a fortune for him. Or the maid with four daughters to feed, clothe and put through school. Or the trash-picker who really doesn’t know where his next meal is coming from.

It’s all relative, I guess. If you’re used to champagne and have to come down to plain old vin blanc sans fizz, I guess that must seem pretty grim. But it’s hardly living on the edge.

Poverty is living on the edge.

There are countless definitions of poverty. The World Bank’s description is the most telling, and also the most poignant:

“Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom.”

So how do we “measure” poverty? How poor is “poor”?

“Relative poverty” determines the level of poverty in individual countries, whereby the entire population is ranked in order of per capita income. The bottom 10 percent of this ranking is considered “poor” or “impoverished”. While this method works for country-wide measurements, it has some major drawbacks when used globally.

For example, if the 10 percent relative poverty measurement were applied in a global setting, both the United States and sub-Saharan Africa would show the same 10 percent poverty rate, even though the actual conditions of the poor in sub-Saharan Africa are far worse than those of the poor in the United States. Which is why “absolute poverty” measures are used to define poverty on a global scale.

According to Thinkquest, the World Bank’s “absolute poverty line” is the most commonly used definition of global poverty, and is set at an income of US$2 a day or less, while extreme poverty is set at $1 a day or less. For highly industrialized countries such as Britain, Japan and the United States, the absolute poverty line is set higher, at $14.40. The 2005 poverty line for single individuals in the United States was set at $26.19 a day.

In reality, the “$1 a day” poverty line is $1.08 (the “$2 a day” line is $2.15) in 1993 US dollars, adjusted for “purchasing power parity”. This basically means that adjustments are made to the poverty line because a dollar in a developing country, such as Sierra Leone, will buy far more than a dollar in an industrialized nation, such as Japan.

But all that changed last year. In September 2008, Adam Parsons, editor of Share the World's Resources, wrote: “An economic catastrophe occurred on August 26th, 2008 that was quickly forgotten across the media: an extra 430 million people were classified overnight as absolutely poor. The cause was no tsunami or natural disaster, but simply the revisions of World Bank statisticians who adjusted the international poverty line from $1.08 to $1.25 a day.

“A margin of error, in other words, of 42 percent, defining a quarter of the developing world as living without sufficient means for human survival.”

As if that were not shocking enough, this is the state of our world today:

• Almost half the world – more than 3 billion people – live on less than $2.50 a day.

• The GDP of the 41 Heavily Indebted Poor Countries (567 million people) is less than the wealth of the world’s seven richest people combined.

• Nearly a billion people entered the 21st century unable to read a book or sign their names.

• Less than 1 percent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen.

• One billion children live in poverty (one in two children in the world). Across the world, 640 million children live without adequate shelter, 400 million have no access to safe water, 270 million have no access to health services. 10.6 million died in 2003 before they reached the age of 5 (or roughly 29,000 children per day).

In 2005, the wealthiest 20 percent of the world accounted for 76.6% of total private consumption; the poorest fifth just 1.5%:

The poorest 10 percent accounted for just 0.5 percent and the wealthiest 10 percent accounted for 59 percent of all the consumption:

Much as I dislike quoting the World Bank, this is very true:

“Most often, poverty is a situation people want to escape. So poverty is a call to action – for the poor and the wealthy alike – a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities.”

Maybe I’m a dreamer and idealist, but I do believe more and more people are hearing that call to action. Change is happening, in little pockets, at the individual and community levels. People have stopped wanting to do something about it, and have started doing. It’s like we are finally waking up to the fact that we cannot wait around for governments to act. Let’s just do whatever we can as concerned individuals, communities, even corporations. If enough of us do that, change will have to happen.

Sources: www.thinkquest.org, www.worldbank.org, www.globalissues.org

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