FeaturedNationalVOLUME 18 ISSUE # 44

Global poverty: a disturbing trend

Rising poverty is a worldwide phenomenon, but the situation is more acute in developing countries. Spiralling inflation, supply chain disruptions and surging food prices are pushing more and more people below the poverty line.

The Global Multidimensional Poverty Index (MPI) 2023 recently released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) sheds new light on the growing incidence of poverty around the world. The MPI measures deprivations in health, education and standard of living that directly affect a person’s life and wellbeing. It is an index that measures the percentage of households in a country deprived along three dimensions –monetary poverty, education, and basic infrastructure services – to capture a more complete picture of poverty. In other words, MPI aims to analyse the complexity of poverty that considers dimensions of well-being beyond just monetary poverty.

The global MPI, developed by the OPHI in 2010, is a tool used to comprehensively measure progress towards Sustainable Development Goal (SDG) 1, which aims to end poverty in all its forms and dimensions. It examines a person’s poverty and deprivations across ten indicators in health, education, and standard of living to identify who is poor and how deeply they are poor. The MPI is disaggregated by age group and geographic area to show regional trends and patterns. The data can be compared across ethnic groups, age, and urban or rural areas.

The index is a key international resource that measures acute multidimensional poverty across more than 100 developing countries. It was first launched in 2010 by the OPHI and the Human Development Report Office of the UNDP. The MPI monitors deprivations in 10 indicators spanning health, education and standard of living and includes both incidence as well as intensity of poverty. A person is multidimensionally poor if she/he is deprived in one third or more (means 33% or more) of the weighted indicators (out of the ten indicators). Those who are deprived in one half or more of the weighted indicators are considered living in extreme multidimensional poverty.

On the other hand, the April 2023 update of the World Bank’s Multidimensional Poverty Measure (MPM), which includes the latest estimates for 121 economies, presents a similar perspective on world poverty. The Multidimensional Poverty Measure (MPM) seeks to understand poverty beyond monetary deprivations (which remain the focal point of the World Bank’s monitoring of global poverty) by including access to education and basic infrastructure along with the monetary headcount ratio at the $2.15 international poverty line. The World Bank’s measure takes guidance from other prominent global multidimensional measures, particularly the Multidimensional Poverty Index (MPI). But it differs from them in one important aspect: it includes monetary poverty less than $2.15 per day, the New International Poverty Line at 2017 PPP (Purchasing Power Parity), as one of the dimensions. Under this broader definition of poverty, many more people are categorised as poor.

The World Bank’s Poverty and Shared Prosperity 2022 report shows that almost 4 out of 10 multidimensionally poor individuals (39 percent) are not captured by monetary poverty, as they are deprived in nonmonetary dimensions alone. A country’s MPM is at least as high as or higher than monetary poverty, reflecting the additional role of nonmonetary dimensions to poverty and their importance to general well-being. Deprivations in nonmonetary dimensions compound poverty and perpetuate cycles of inequality across generations. Securing higher living standards for a population becomes more challenging when poverty in all its forms is considered, but it provides policymakers with a roadmap for monitoring improvements in poverty alleviation programs.

The 2023 MPI report “Unstacking Global Poverty: Data for High Impact Action,” provides the latest update on the state of multidimensional poverty in the world. It collates data from 110 developing countries covering 6.1 billion people, accounting for 92 percent of the population in developing countries. It graphically shows how prevalent poverty is in the world and provides insights into the lives of poor people, their deprivations and is a great support for efforts to end world poverty in all its forms.

According to the Poverty Index 2023, 1.1 billion people (18% of the total population) out of 6.1 billion people, are acutely multidimensionally poor and live in miserable conditions across 110 countries. While Sub-Saharan Africa has 534 million poor, South Asia is home to 389 million. These two regions account for approximately five out of every six poor people. Children under 18 years, numbering 566 million constitute half of MPI-poor people, and the poverty rate among them is 27.7%, while among adults it is 13.4 %.

Pakistan is in the category of countries where poverty levels have sharply risen in recent years. According to MPI 2023, over 60 percent of the country’s population is living in multidimensional poverty. In this context, the last sixteen months have been the worst in the country’s history. Successive governments in Pakistan launched a number of poverty alleviation programmes but without any success. These programs failed because they were poorly conceived and half-heartedly implemented.