Adieu to poverty

  • Though ambitious, the goal to end poverty by 2030 is still achievable

Nov 11, 2015-

As the time limit set for achieving the Millennium Development Goals (MDGs) is coming to an end, on September 25, 193 nations adopted 17 Sustainable Development Goals (SDGs) at the United Nations.

Goal 1 of the MDG aimed to eradicate extreme poverty and had the target of halving the proportion of people whose income is less than $1.25 a day by 2015. This target has been met. More than 1.9 billion people (36 percent of world population) lived in extreme poverty in 1990. This figure has dropped to 836 million (18 percent of world population) by 2015. Building upon the success of the MDGs, the SDG aims to completely eliminate extreme poverty by 2030. This is the Goal 1 of the SDGs with the theme ‘end poverty, in all its forms, everywhere’.

Ambitious targets

The concept of poverty is multidimensional. It includes measurable and tangible indicators such as access to basic education, healthcare, water and sanitation, income, regular employment, and also qualitative elements of empowerment such as participation and inclusion. It is defined in both absolute and relative terms. Absolute poverty refers to the deprivation of basic human needs such as food, water, sanitation, clothing, shelter, healthcare and education, whereas relative poverty refers to unequal living standards of people in a particular society.

The target set by the SDGs to end poverty is in reference to absolute poverty. The benchmark which needs to be achieved by 2030 is that no one should be living on less than $1.99 dollar a day. The goal to abolish poverty is based on the extrapolation of drop in the global poverty rate that has been falling little over one percent every year since 1980 and statistical trends predict that this number could reach three percent before 2030.

The World Bank, however, has come up with a less ambitious target towards ending poverty: not more than three percent of the world’s population should be living on less than $ 1.25. This target of the World Bank is based on the notion that ‘frictional poverty’ will continue for a long time because economic volatility, political instability, natural disasters and other unforeseen circumstances lead citizens living just above the extreme poverty line to fall below the poverty line from time to time. Regardless, the World Bank has laid two goals in terms of eliminating poverty: ending poverty by 2030 and sharing prosperity by promoting income growth for the poorest bottom 40 percent in every country. It is estimated that if developing countries sustain their growth, and the bottom 40 percent of the poorest people’s income is raised by two percent faster than the present annual average, extreme global poverty rate would fall below 2.7 percent by 2030.

Economic growth is essential but not a sufficient condition to reduce poverty. The rapid economic growth of China and India in the last decade has lifted millions out of poverty, but these two nations are still home to the poorest people in the world. Eighty percent of the poor reside in South Asia and Sub-Saharan Africa and this number is expected to rise due to new threats such climate change, conflict and food insecurity.

Further, to alleviate poverty it is important to push for inclusive economic growth, invest in people and environment and ensure social safety nets, climate resilience, disaster risk preparedness and preventing spread of diseases. Moreover, a strong collaboration between government, private sector, civil society and citizens is key to success.

Case of Nepal

According to Central Bureau of Statistics, Nepali people living in poverty in 2010-11 declined to 25.2 percent from 30.8 percent in 2003-04 and 41.8percent in 1995-96. This figure could further reduce to 21 percent by 2015 and the country will meet is MDG target to halve the poverty by 2015. If the global statistical trend of an average annual one percent fall in extreme poverty rate continues, Nepal’s extreme poverty rate could fall to five percent by 2030 which is greater than one percent target set by World Bank. But if Nepal is able to accelerate the pace of reducing poverty by focusing on sharing prosperity for the poorest 40 percent and make targeted investment in anti-poverty programmes, it can achieve less than three percent extreme poverty rate. Thus, targeting the poor, economic and financial inclusion is vital to end poverty by 2030.

Targeting the people below extreme poverty line is intertwined with the issue of inclusion. So there is a need for Nepal to go beyond caste, ethnicity, geographical area and sector wise inclusion to economic and financial inclusion. Other ways to expand social safety nets for the poor are: increasing their market access, abolishing syndicate and good governance. As one of the poorest countries in the world, the segregation of people living under extreme poverty and anti-poverty intervention could be a herculean task for Nepal. In addition, remnants of feudalism and a bureaucracy that favours the rich has prevented anti-poverty investments from reaching the poor. And currently, only ‘wholesale’, head count and participatory methods are practiced in the country to ensure inclusion and to reach people living in extreme poverty.

Against this backdrop, though the ‘End Poverty 2030’ mission is ambitious, it is not unachievable. If the government, the private sector, civil Society, donors all collaborate with one another, it should not be very difficult to make poverty history in the true sense.

Suwal is portfolio manager at  the Poverty Alleviation Fund

Published: 11-11-2015 08:21

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