Magazine article The Christian Century

Ending Extreme Poverty

Magazine article The Christian Century

Ending Extreme Poverty

Article excerpt

INSCRIBED IN STONE at the headquarters of the World Bank in Washington, D.C., are these words: "Our Dream Is a World Free of Poverty." In recent years the world has made remarkable progress toward realizing that dream. Last fall the World Bank projected that for the first time in history less than 10 percent of the world's population was living in extreme poverty--down from 37 percent in 1990 and 44 percent in 1981. The World Bank defines "extremepoverty" as living on less than $1.90 per person per day. Ana Revenga, senior director of the Poverty and Equity Group at the World Bank, believes that the goal of ending extreme poverty can be achieved. In her 20-year career at the World Bank, she has worked in many regions of the world, especially on issues of gender equality. Before joining the World Bank, she worked at the Central Bank of Spain.

How do you measure extreme poverty around the globe?

It is extremely difficult to measure poverty in a rigorous way, and every country sets its own standards for what is necessary for basic living. There are climate variations: what a person needs to survive in Central Asia for caloric intake, clothing, shelter, and heat is different from what is needed in a tropical location. And the standards vary with development. Richer countries will set a higher standard for what counts as poverty.

At the World Bank, we take the information on basic needs collected from the 15 poorest countries and then we average them. That comes out to be about $1.90 per day per person, and that is what we call the global extreme poverty line.

We can monetize a lot of the aspects of poverty--access to clean water and access to health care, for example, are put in monetary terms in our model--but there is a legitimate debate about the multidimensional aspects of poverty. When you talk to the poor, they will talk about a sense of dignity and about having a job, not just receiving money. How do you monetize that? You can monetize access to schooling, but it is more difficult to monetize the quality of schooling. And so on.

What is the value of measuring poverty in monetary terms?

The first reason to do it is to measure how well the world is doing in reducing poverty. The other reason is advocacy: to keep the world mobilized around the eradication of the most extreme forms of poverty.

In practice, making progress on poverty reduction is really about working at the country level, not the global level.

Who are the poor? Why are they poor? What are they missing? How do you break the intergenerational cycle? You've got to get into these details and come up with specific interventions that address the full complexity of a country's situation. You can't use the global data to design policies in most cases.

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But at the global level, we want to keep the world focused on whether or not things are getting better.

Where have the greatest gains been made?

Twenty years ago, the greatest number of people living in poverty were in East Asia. That has changed dramatically. The changes in Latin America have also been impressive in the past decade.

What is the single most important contributor to the decline in world poverty?

The biggest driver of the success is economic growth--but not any kind of economic growth. What's needed is economic growth that improves the income-generating opportunities of the poor. This kind of growth involves either raising the value of the agricultural products that the poor are producing or generating better jobs. Anywhere between two-thirds and 80 percent of the decline in poverty rates is due to this kind of economic growth.

What is an example?

Take Peru. Over the past couple of decades, the combination of political stability and good economic policies have led to the development of new opportunities. The poor in Peru now grow vegetables that are exported. …

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