Home .Development Measuring poverty’s many dimensions
Measuring poverty’s many dimensions
Saturday, 05 March 2011 01:49

According to World Bank calculations, if you are living on less than $1.25 a day, you are living in poverty.  But poor people suffer from many other "deprivations" than just income poverty.  In this regards, the OPHI’s recent estimates of “acute multidimensional poverty” are a welcome initiative to estimate the complex phenomenon of poverty.


A strong message of this analysis is that India and other South Asian countries have tragic intensities of poverty like Africa.  By contrast, Arab countries which have been experiencing their jasmine revolutions, have very low poverty head counts. 


As Nobel-prize winning economist, Amartya Sen and others have highlighted, human lives can be battered and diminished by many different kinds of “deprivations”.  Poverty is multidimensional.  This is recognized in the Millennium Development Goals which cover a broad range of issues like income poverty, primary education, gender parity, child mortality, access to safe water, access to sanitation and so on.


The United Nations Development Program (UNDP) has for many years estimated a human development index based on health, education and standard of living.  The Oxford Poverty and Human Development Initiative group (OPHI) group, which is working with the UNDP, has now taken this one step further by estimating a new index based detailed components of these three aspects.  These components are: for health -- child mortality and nutrition; for education – years of schooling and child school attendance; and for standard of living – electricity, drinking water, sanitation, flooring, cooking fuel and assets.  Importantly, income does not come into this index which reflects the number of deprivations a poor household experiences at the same time.   


But surely there are many other aspects of poverty such as human rights which are not included in this estimate.  One reason for restricting the exercise to these aspects is data limitations.  The authors argue that a key priority for future work on multidimensional poverty must be gathering better data on issues like informal work, empowerment, safety from violence, and human relationships (social capital and respect versus humiliation).


This new multidimensional poverty index reflects the number of deprivations a poor household experiences at the same time.  But what qualifies a household a being “multidimensionally poor”?  The authors make the value judgment that a household is “multidimensionally poor” if it is deprived in some combination of indicators whose weighted sum is 30 per cent or more of the dimensions. 


So what are the results?


Based on the multidimensional poverty index (MPI), some 1.7 billion of the world’s population are estimated to be poor.  This compares with the 1.4 billion people who live on less than $1.25 a day.  (2.5 billion people are estimated to live on less than $2 a day.)  Rural areas contain about five times more MPI poor people (1.4 billion people) than urban areas. 


Deprivation in living standards often contributes to poverty more than deprivation in either of the other two dimensions.  The second biggest contribution comes from educational deprivations in most countries. 


In terms of human lives, South Asia has the world’s highest levels of poverty.  South Asia is home to 51 per cent of the world’s poor people or 844 million.  55 per cent of the population of India are MPI poor, 58 per cent in Bangladesh, 51 per cent in Pakistan and 65 per cent in Nepal.  Sri Lanka has only 5 per cent of MPI poor people.  While South Asia’s population is more than twice as high as Africa’s, it is also home to nearly twice as many MPI poor people as Africa, the next poorest region.  Overall, 55 per cent of South Asia's population is MPI poor, compared with 65 per cent for Africa.   


Delving deeper into the Indian situation, we find 8 states with poverty as acute as the 26 poorest African countries.  These 8 states are home to 421 million MPI poor people, more than the 26 poorest African countries combined (410 million).  Within India, the rate of MPI ranges from 24 and 16 per cent respectively in Delhi and Kerala to 77 per cent and 81 per cent in Jharkhand and Bihar respectively.   


Sub-Saharan Africa's MPI rate of 65 per cent amounts to 458 million people.  The MPI poverty rates ranges from 3 per cent in South Africa to 93 per cent in Niger.


East Asia has 15 per cent of the world’s MPI poor people, or 255 million.  In East Asia, Thailand and China have relatively low poverty estimates.  13 per cent of Chinese people are MPI poor, while Thailand has only 0.8 per cent.  At the other extreme, 54 per cent of Cambodians are MPI poor, while 21 per cent of Indonesians are MPI poor.


In the Arab world, the overall MPI poverty rate is 18 per cent.  MPI head counts are below 7 per cent in the UAE, Occupied Palestinian Territories, Jordan, Tunisia, Syria and Egypt.  Iraq has an MPI poor population of 14 per cent, Morocco and Djibouti have 28 and 29 per cent respectively, Yemen has 52 per cent, and Somalia has 63 per cent.


In Latin America, the MPI poverty rate is 10 per cent, with Haiti topping the list at 57 per cent.  In Central and Eastern Europe and the Commonwealth of Independent States, the MPI poverty rate is only 3 per cent. 


What to make of these results?  I will offer just a few brief comments of the many that could be made. 


First, whenever something like the 9/11 terrorist attacks or the present jasmine revolution takes place, people are quick to point to poverty as being the cause.  As we now know, terrorists are rarely poor people.  And MPI poverty rates are low in the jasmine revolution countries.  The sociological and psychological origins of these events are much more complex.  You need to examine a broad range of issues like income inequality, social justice, political repression, corruption, lack of opportunity, and economic performance.  It is instructive that the Asian country most worried about a jasmine revolution is China which today has a very low rate of poverty.


Second, the figures on India, a supposed emerging giant, are salutary.  Very often observers like to put China and India into the same bag, when clearly India is way behind China in terms of fighting poverty, and does not have any meaningful strategy to reduce this poverty.  In many ways, India is a land of massive poverty, with a few enclaves of impressive development.


Countries like the US and Japan are falling head over heels to court India as a hedge against a resurgent and testy China.  We are supposed to have shared values with India, the world’s biggest democracy.  The recent massive corruption scandals in India should be just one reminder that while India is democratic, it has a very low quality democracy.  And while China is a dictatorship, it is a very high quality one at that.





Acute Multidimensional Poverty: A New Index for Developing Countries, Sabina Alkire and Maria Emma Santos

Oxford Poverty & Human Development Initiative Working Paper No.38.  July 2010.





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