Several posts in this e-discussion have expressed concern on the way poverty reduction is being addressed including the way poverty is measured.
In early 2012, outgoing World Bank President Robert Zoellick announced that the Millennium Development Goal of halving the global poverty rate relative to its 1990 level had been achieved in 2010 – five years ahead of schedule. But many analysts have challenged estimates that rely on the World Bank’s current poverty line, raised in 2008 from $1 to $1.25 per day, in purchasing power parity (PPP) terms.
While FAO is aware of the limitations of its hunger index
(see SOFI Technical Appendix), there appears to be less progress on this measure. As the poverty line is mainly defined in terms of what it takes to avoid being hungry, this
raises troubling questions for monitoring and estimation of both hunger and poverty.
Critics argue that, for methodological reasons, the PPP-based poverty line misrepresents the prevalence of poverty worldwide. For example, the three rounds of the International Comparison Programthat have been conducted so far have each defined the poverty line differently. In fact, inflation in the United States suggests that the poverty
line should have been raised to $1.45 per day by 2005.
Improving global poverty estimates – the World Bank’s begin in 1981 – requires overcoming three major problems: insufficient survey data, flawed survey execution, and faulty PPP conversions. Unfortunately, the current approach has inadequately addressed these issues. An improved poverty indicator is urgently needed.
An edited version of a recent discussion may be of
Jomo Kwame Sundaram
Assistant Director General Economic and Social Development Department
Food and Agriculture Organization