World Savvy Monitor

Multiple measures are used to statistically quantify who is poor, and how poor those people are.  Gross Domestic Product (GDP), Gross National Product (GNP), per capita income, purchasing power parity (PPP), and Gini coefficients are used in addition to other metrics to capture how the world’s population is economically organized.  The United Nations (UN), World Bank, and International Monetary Fund (IMF) have extensive databases documenting how global wealth is distributed among the countries on the planet, and how evenly wealth is distributed within societies.

These types of statistics are inherently political.  Data may be collected, sorted, and analyzed to various ends, and it is possible to choose evidence that suits one’s conclusions.  Even when acting without an agenda, statisticians can add or delete literally millions of poor people from these rankings simply by considering different factors.  Who one counts as poor also plays a critical role in determining how effective development assistance is at lifting people out of poverty; there is often a selection bias that can significantly affect these outcomes.  Finally, data on the very poorest people on the planet is hard to come by, and averages are often guesswork.  Census numbers and household income figures are luxuries of functioning states, and functioning states are generally not where the world’s poorest live.

To provide a visual, economic well-being in the world today resembles a pyramid.  Generally, the one thing that most economists agree on is that, of the roughly 6 billion people in the world, only 1 billion occupy the top of the pyramid in what are known as developed countries.  The other 5 billion live in what are known as developing countries.  The term developing countries, however, is a broad category, and most go a step further to divide this group into 4 billion people who reside in countries experiencing some economic growth (often known as the BRICs, in reference to Brazil, Russia, India, China, and other emerging states) and the roughly 1 billion at the bottom, who live in countries experiencing no growth, or even negative growth.  The latter countries are known as Least Developed Countries or LDCs.

Jeffrey Sachs has used the term extreme poverty to describe life in an LDC, and it is this category that will be the primary topic of discussion in this issue of the World Savvy Monitor.  Although pockets of “moderate” poverty (meaning living at subsistence level) and “relative” poverty (living below national averages) certainly exist in developed countries, and large swathes of varying degrees of poverty plague middle-developing nations, this is not the type of deprivation seen on a large scale in an LDC.  The type of poverty in LDCs is almost unimaginable to the average person living in the West.  While someone living in American Appalachia may have extraordinary difficulty affording and accessing basic human needs, the world’s poorest citizens live in countries where a minimum standard of living is largely unavailable because, for a myriad of reasons, the state cannot provide it.  Likewise, water, sanitation, food, housing, and transportation may be scarce resources in many parts of China or India, but they are available to many in the country and the basic infrastructure does exist to provide these vital resources.  The countries in which the other 5 billion people live are experiencing at least some degree of economic growth, albeit along a wide spectrum; consequently, even the poorest citizens have some hope for a better life, if not for themselves, then for their children.  

This is not the case among the poorest billion where life is truly, in the infamous words of Thomas Hobbes, “nasty, brutish, and short.”  The latest figures from the World Bank, adjusted for current costs of living, show that 1.4 billion people in the world live on less than $1.25 per day.  Many of these live on less than $1, or roughly $300 per year.  Most of these people live in LDCs in Africa, but people in this category can also be found in parts of Central, South, and East Asia, the Caribbean, and Latin America.    

The United Nations Human Development Report annually ranks these countries (See http://hdr.undp.org/en/statistics/) along both the Human Development Index (HDI) and the Human Poverty Index (HPI), examining basic dimensions associated with a long and healthy life, knowledge, and a decent standard of living.  Both seek to capture the deeper experience of poverty beyond basic income levels and to probe the extent to which the “opportunities and choices most basic to human development” are denied.

The HDI:  Considers life expectancy, literacy rates, school enrollment, and household income (using the GDP Per Capita/Purchasing Power Parity measure).

The HPI:  Goes deeper into the same factors considered by the HDI, but uses different statistical modeling for developing and developed countries, reflecting the fact that the concept of “deprivation” is different depending on where you fall on the HDI.  For poor countries, it considers survival and literacy measures, as well as basic “provisioning” or access to basic “public and private resources.”

Visit the United Nations Development Program website for a list of countries by HDI and a list of countries by HPI.  As you will see, most of the lowest performing nations on both indices are in Sub-Saharan Africa; in fact, all at the very bottom of both lists are located on the African continent.  Other LDCs outside Africa include Bangladesh, Bhutan, Cambodia, Nepal, Yemen, Pakistan, Haiti, and Myanmar (Burma).

Next:  Global Poverty:  Why?