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Widespread poverty and excessive inequality remain the principal
challenges to the legitimacy of the process of globalization that has
been underway during the last two decades. Even as economies and
governments adjust to afford a larger role for markets and a smaller
role for the State in development, the importance of public action to
deal with poverty and vulnerability has only increased. It is for this
reason that the 1995 World Summit for Social Development called upon
countries not just to set
"time-bound goals and targets"
to
substantially reduce overall poverty and eradicate extreme poverty, but
to implement national anti-poverty plans to achieve these targets. This
task is indeed daunting in the Asian region, where in 1998, 800 million
people, amounting to 67 per cent of the world's poor, were below the
international poverty line of $1 per day per capita at 1993 prices.
This measure focuses on the lack of monetary means to meet a specific
set of needs, and usually takes the form of identifying consumption
poverty. Within that definition, absolute poverty is identified as an
income or expenditure level at which the food component of expenditure
is inadequate even to meet the physiological needs for survival. That
is, the poverty line is defined
"as the total consumption expenditure at
which one can expect a person to be adequately nourished in the specific
society under consideration." The identification of
"needs" being
subjective, the latter definition, which ties the required need down to
a calorific requirement essential for subsistence, is seen as having an
element of objectivity about it. Many
"national" poverty line figures
derive from such a notion of poverty. The arbitrary international
poverty
"standard", which identifies the poor as those earning less than
$1 or $2 per capita per day in purchasing power dollars, also derives
from a similar notion.
Once need and its relevant monetary equivalent are arrived at, a number
of measures on the incidence of poverty can be worked out. The most
widely used is the head-count ratio, which estimates the numbers below
the poverty line and their proportion to the relevant total population.
The problem with poverty lines tied to a specific calorific requirement
is that they presume that at the point when expenditure is adequate to
meet that requirement, the non-food component of expenditure is adequate
to cover required
"basic needs". In reality, of course, it does not. In
as much as a decent subsistence requires that other
"basic needs" such
as clothing, shelter, safe drinking water, adequate sanitation, and
accesses to health and educational facilities are also met, over time
the definition of poverty was expanded to include these, even though
this involved some loss in measurability in the form of a single number
capturing incidence. Poverty now was reflected not just in the per
capita income of households being inadequate to meet specified
consumption needs, but also in the inadequate access to a range of
services that impacted on crucial indicators of health and morbidity.
The
Achievements in the Asia-Pacific
With income and consumption surveys hard to come by
in the case of most countries, assessments of the gains registered in
the reduction of income poverty must necessarily be spotty. However,
World Bank figures (Table 1), based on national surveys from which
comparable estimates have been computed, indicate that between 1990 and
1998, while poverty reduction in East Asia, including China, has been
quite significant (from 27.6 per cent to 15.3 per cent), it has been
slow in South Asia (42.4 per cent to 40 per cent) and the incidence of
poverty has risen in East Europe and Central Asia (3.95 to 5.14 per
cent). The sharp reduction in the incidence of poverty in East Asia as a
whole, as well as in China in particular, has meant that the number of
income poor in these countries has also fallen quite substantially
during the 1990s. However, in South Asia, which includes India that is
characterised by a large population and a high incidence of poverty, the
smaller reduction in poverty incidence has not helped prevent an
increase in the number of income poor. Moreover, between 1996 and 1998,
during which time East Asia was afflicted by the financial crisis of the
late 1990s, poverty in fact rose marginally in the whole of East Asia
and significantly in China, resulting in an increase in the number of
income poor in those countries.
Table 1 >>
The unusually
large reduction in East Asia between 1993 and 1996, does indeed render
the East Asian figures suspect. It must be reported that the regional
aggregates are based on global and regional aggregates computed by the
World Bank using distributions from 265 national surveys from 83
countries, representing 88 per cent of the population of the developing
world. Coverage varies geographically, ranging from 53 per cent of the
population in the Middle East and North Africa to 98 per cent of the
population of South Asia.
Unfortunately of the 83 countries in the data set 17 had only one
survey, 31 had just two surveys and 35 had three or more survey over the
period 1980 and 1998. This has meant that poverty estimates for
individual reference years in many countries have been computed by
extrapolation, using the figure on mean consumption from national
accounts statistics and by assuming that the distribution has not
changed since the previous or succeeding survey. This makes the figures
yielded by the World Bank's exercise partially unsatisfactory, though it
is the principal source of data for making international comparisons of
poverty trends.
Needless to say, within the region and its sub-regions, individual
countries have performed very differently in terms of the record of
reduction in income poverty. Table 2, which provides figures on poverty
computed by the World Bank using three different poverty lines in 8
countries in the East Asian sub-region, yields a number of pointers.
First, the World Bank's poverty line of $1-a-day delivers in most
countries poverty incidence figures that are far lower than that yielded
by country-specific poverty lines. Second, poverty incidence is
extremely sensitive to the poverty line, with poverty incidence rising
dramatically when the poverty line is doubled to $2-a-day. Third,
poverty in the rural areas tends to be far higher than in urban areas in
all East Asian countries, with the exception of Mongolia. Finally,
within East Asia, poverty differs substantially, falling from a high of
26 per cent to a low of 0 per cent on the basis of the $1-a-day poverty
line in five countries for which figures are available.
Table 2 >> |
