Rebeca Grynspan: Keynote Speech at Oxford Forum for International Development on Tackling Global Poverty: Data, Policies, and ActionFeb 21, 2014
Tackling Global Poverty: Data, Policies, and Action
Keynote by Rebeca Grynspan at Oxford Forum for International Development
- Thank you for inviting me to speak at the Oxford Forum for International Development. The title of my speech is "Tackling Global Poverty: Data, Policies, and Action."
- This Forum is taking place at both, very exciting as well as challenging times for development. The MDGs are reaching their target date and the process of designing the post-2015 development agenda is in full force.
This goes in line with an unprecedented global conversation the UN has facilitated on what citizens of the world would like to see in the post-2015 agenda. More than one and a half million people of 190 countries have contributed to this process through national and thematic consultations, and the on-line platform “MY World”. We have reached out to people from all walks of life and to people who ordinarily are not asked about their priorities.
- As a result, we now have a much clearer idea of people’s priorities around the world. Their messages are clear: first and foremost, the need to finish what we started. We are just under two years away from the MDG deadline and, while we have made major progress, there is still significant work to be done.
- So let me start by emphasizing the achievements of the MDGs agenda. And I do this not for propaganda purposes, or triumphalism, far from it. I because the only way to maintain the citizens commitment to such an important agenda is if WE BELIEVE that progress can be achieved, that cooperation and what we do together matters to fight the suffering of so many around the world. I have found that one of the most important deterrent for citizens’ engagement and good actions, and the worst curse for solidarity is pessimism. The belief that no matter what you do, things won't change. But we know, that despite the daring challenges the world faces today, we can make a difference in the lives of many in a meaningful way.
- So it is important to recognize that, despite initial skepticism, the Millennium Declaration approved by the heads of state in 2000 and the eight MDGs targets that followed, have proved to be a powerful tool in galvanizing action at national and level around clear, concise, and measurable development objectives, establishing for the first time a clear accountability and monitoring system that the world doesn't want to lose.
- An important element of this success, very often overlooked, has been on the one hand, the internalization of the MDG’s agenda by the Governments in their development framework, and on the other hand, the adoption of the MDGs by civil society, as a tool to have a strategic dialogue with the Government and a tool to demand accountability and action.
- Indeed, extreme poverty rates have been halved globally, meeting the MDG one target ahead of time. In 1990, it was estimated that 43 percent of the world lived below $1.25 per day.
By 2010, it was down to 21 percent (in absolute terms this corresponds to a reduction from 1.9 billion to 1.2 billion – due to population growth).
- We are within reach of achieving universal primary education coverage and some of the poorest countries have made the greatest strides in education. For example, Burundi, Rwanda, Togo, and Tanzania have achieved or are nearing the goal of universal primary education.
- And across the globe we are close to reaching gender parity in primary education.
- Access to improved water sources and the fight against HIV, Aids, Malaria, and TB show encouraging signs. The numbers of people receiving antiretroviral therapy for HIV/AIDS increased 13-fold from 2004 to 2009.
- The numbers of children who die before their fifth birthday declined with nearly 12,000 fewer children dying each day.
- But we are still important goals and targets lagging behind, like reducing maternal mortality and empowering women and girls. The goals referring to sanitation and environment are also an example where we need to accelerate progress.
- We also know that despite progress shown at the aggregated level, progress has been unequal both within countries and between countries. For example the target of Millennium Development Goal one, to cut the 1990 poverty rate by half by 2015, has been met ahead of schedule – largely due to the impressive poverty reduction achievements of China (where extreme poverty dropped from 60 per cent to 10 per cent during this period).
- That is why the main objectives of the MDGs are as relevant today as before.
- It is estimated that in 2015, more than one billion people will still live in extreme poverty, even if poverty continues to be reduced at the same rate.
- So, from a moral and ethical perspective, we need to finish what we started.
- For those one billion people, progress has not come to them, so the global community will have failed them. Eliminating extreme poverty by 2030 has therefore become a call to action that many have embraced as a top priority for the post-2015 development agenda.
- This is in line with the call of the High Level Panel on the Post-2015 agenda to "Leave no one behind" and the Global Call to Action Against Poverty (GCAP), that brings together NGOs, women and youth movements, as well as trade unions and community or faith groups, to advocate for global action on poverty and inequality.
- So, while a broad consensus is emerging around this target, a debate on what we mean by poverty, how we measure it, what policy tools can be used, and who is responsible for taking action is also taking place.
- I hope we will have time later to enter into these deeper into these issues, but let me now expand on the debate of how we measure poverty, and why this matters for the policy frameworks and targets we are discussing.
II. Measuring Poverty
- Measuring poverty is not a simple task.
- As an economist and a policy maker, as well as a former politician, I know well the importance of measurement: Most of the time you don´t see what you don´t measure. Statistical invisibility is a real issue (the feminist movement has proven this point beyond doubt).
- As Joe Stiglitz, Amartya Sen and Jean-Paul Fitoussi pointed out in their seminal 2009 report on the Measurement of Economic Performance and Social Progress, what we measure reflects what we do.
- So, measuring extreme poverty and eradicating it is an indispensable, necessary and unavoidable step forward. The question is whether there is a need to go beyond the way we are measuring and defining it.
- Is the definition of poverty and the choice of indicators a trivial choice?
With this in mind, let me point out some of the key debates around this.
A. 1. Extreme poverty vs moderate poverty
- The figures I mentioned in my introduction, that over one billion people currently live in extreme poverty, are based on a definition which uses only income to categorize the poor – with a specific threshold of $1.25 USD/day per person in 2005 prices, adjusted for differences in purchasing power.
- There are of course debates around this specific level – is it appropriate? is it too low? The World Bank has argued that it is appropriate, as it reflects the average of the 15 poorest countries' own poverty lines.
- But the point I want from a policy perspective, is that if we look at what happened with those that are between $1.25 and $2.0 per day, called the “moderate poverty” line, we see that progress has been much slower, declining from 65 percent in 1990 to 43 percent in 2008, less than half!!. This suggests that despite the success of meeting MDG 1, many of the people that overcome extreme poverty continue to be poor!!!! There are large numbers of people, just above the extreme poverty line that are not only vulnerable to falling back into extreme poverty, but they are still poor, meaning, they are unable to live in dignity and provide for their families.
This is related to a second debate:
2. Income versus Multi-dimensional poverty
- Does an income measure of poverty truly capture the essence of what it means to be poor (this will be even more complicated to answer if we included the subjective definition of poverty!)– Is the lack of options and exclusion and the sense of vulnerability faced by the poor throughout their life cycle captured by the income definition of poverty? Are we identifying what we need, to really differentiate and distinguish the poor from the non poor? Are we considering whether these two groups are stable across time, or if there is a lot of “jumping” from one group to the other, with the same individuals and families being poor and non poor many times in their life cycle?
Since many live near the income poverty line anything (an illness of a family member, paying for a funeral or a death for example) can make them fall back into poverty because many of them are never really able to distance themselves enough from the poverty line because of lack of health insurance, protection policies, natural disasters or…economic crisis.
- Amartya Sen has argued that poverty should be seen as “the deprivation of basic capabilities rather than merely as lowness of incomes” since income is only instrumentally significant, whereas there are deprivations that are intrinsically relevant.
- Taking into account some of these concerns with the way poverty is measured, in 2010, UNDP's Human Development Report introduced the Multidimensional Poverty Index (MPI), developed with the Oxford Poverty & Human Development Initiative (OPHI).
- The Multidimensional Poverty Index (MPI) recognizes that poverty is not only about inadequate income, and examines deprivations at the household level across the three dimensions of human development (living standards, health, and education) and their overlap. The notion of intensity is captured as people who simultaneously experience multiple deprivations are identified through 10 indicators ranging from having no household member who has completed five years of schooling, to having had one or more children die, to not having access to clean drinking water, electricity, or adequate sanitation. Dimensions that reflect a trajectory and not only a point in time.
- Using this measure, the 2013 Human Development Report finds that 1.56 billion people are living in multi-dimensional poverty, a significantly larger number than estimated using the $1.25/day income-specific measure.
B. Absolute versus Relative Poverty
- As I mentioned earlier, some have argued that poverty is not only about meeting basic needs, but also about exclusion – social, political, and cultural.
- So relative poverty is closely related to levels of inequality and is defined in relation to the overall distribution of income or well-being. A clear example is the European Commission: “People are said to be living in poverty if their income and resources are so inadequate as to preclude them from having a standard of living considered acceptable in the society in which they live.” And for the EU, the poverty line corresponds to having less than 60 per cent of median income.
- In a recent paper, Nancy Birdsall and Christian Meyer called for median household consumption expenditure (or income) per capita to be incorporated into standard development indicators, as median measures are more "distribution aware", capturing information comparable to the poverty gap, and far superior to commonly used measures of well-being such as GDP per capita or other measures which focus on the mean.
- Often, a distinction is drawn, where absolute poverty is seen as a better measure for developing countries, and relative poverty as better for developed countries.
But I believe that both are important, and inter-related. We have in the developing world what I call an “excess of poverty” caused by to high inequality.
- There is also a political economy argument: evidence suggests that vertical inequality (usually measured by the Gini coefficient) relates to other forms of exclusion and discriminations since where economic power is heavily concentrated in the hands of a few, political power may also be limited to wealthy elites with undue influence, leading to greater exclusion for the poor. This can then create structural barriers to progress, for example, through regressive taxation or under-investment in public goods and infrastructure such as education or public health systems and services.
- Or the other way around, social exclusion and discrimination can be the underlying reason why people are unable to meet their basic needs. Research by Frances Stewart, here at Oxford, and others on “horizontal inequalities”, defined as inequality among culturally defined groups – based on religion, race, gender, ethnicity, casts to name a few - suggests that reducing poverty and ‘vertical inequality’ (between households or individuals) may require first tackling exclusion and discrimination.
- As with the MDGs, the post-2015 development agenda is likely to retain the $1.25/day absolute measure of poverty. But growing numbers of people and experts are calling for inequality (vertical and horizontal) to also be explicitly tackled in the future agenda. This may indeed be a more comprehensive way of addressing these concerns.
- A new UNDP Report, “Humanity Divided: Confronting Inequality in Developing Countries” argues that "the extent of poverty reduction associated with a given level of growth significantly depends on income inequality levels and trends" suggesting that poverty eradication efforts can be much more successful if there is a simultaneous focus on reducing inequalities – a topic I will return to in my discussion on policies.
C. Poor countries versus poor people and poor countries versus conflict and crisis countries
- Finally, it is important to also distinguish between poor people and poor countries. These are not the same. In fact, two decades ago 93 % of the world’s poor lived in Low Income Countries, so there was a clear argument that poverty was a problem of poor countries.
- But since 2000, 27 countries have graduated into what the World Bank classifies as Middle Income countries, such that today 71 % of the world’s poor (860 million people) live in MICs. This is because five MICs with large populations, namely: Pakistan, India, China, Nigeria, and Indonesia, account for 734 million poor people. 85% of the poor of the world.
- In a recent paper, Ravi Kanbur and Andy Sumner have asked: “What precisely is the nature of global moral obligation towards the poor in non-poor countries? How, should international agencies with a focus on poverty reduction recalibrate their engagement in MICs?”
They argue that even though the MICS may have greater capacity to implement pro-poor interventions themselves, to limit, or completely stop, development assistance going towards MICs is problematic, for two reasons: first, from a moral perspective that tackling poverty, wherever it occurs, should be a priority and second from a global goods/spillover perspective, especially since there may be cross-border negative externalities from not tackling poverty here.
- There is also a study that projects that most of the extreme poor people of the world will live in crisis countries in the future. There is a debate around this assertion but no doubt the interaction of conflict, weak governance and slow human development progress has been widely documented.
- This leads me well into the next section of my talk, which is about designing policies to eradicate poverty.
III. Designing Policies
- There is no doubt that growth has been a key driver of poverty eradication in recent years,
- But the 2010 Human Development Report showed that many countries made impressive gains in health and education even where their growth in income was modest. Conversely, some countries showed strong economic performance, but this did not correspond to improvements in life expectancy and overall living standards. Specifically, among the top ten countries which showed greatest progress in HDI, some, such as China and Korea, had strong economic growth trajectories, whereas others, including Laos, Nepal, and Morocco, made advances without as strong economic growth.
- So, if vertical inequality continues to rise, we will need much higher rates of growth to eradicate extreme poverty. Researchers have shown that "the combined effect of high poverty and high inequality greatly attenuates the growth elasticity of poverty reduction " suggesting that in highly unequal countries much higher rates of growth are needed to achieve the same rate of poverty reduction as that in more equal countries.
- The UNDP's recent publication on inequalities mentioned before, further focuses on the persisting inequalities in the non-income dimensions of material well-being, such as health and education, and the impact this has on future development gains.
- We also know that growth alone, does not guarantee equal access to these services. That is why inequality matters even if the post 2015 goal remains confine to extreme poverty. So to take this into account and avoid the danger of excluding an important part of those that need to be reached according to the Multidimensional poverty index many of us have suggested to mainstream horizontal inequalities throughout all the other goals, disaggregating all the indicators by the main categories driving horizontal inequalities, For example…..gender, rural vrs urban, cast, indigenous, race, ethnic group, etc. Maybe youth in many countries,
- But not only inequality but environmental sustainability and conflict could heavily impact on future human development progress. The 2011 report points out the high cost of inaction and argues that environmental degradation and widening inequalities increases the probability of conflicts and threatens to stall progress and even reverse gains. It projects, that an additional 3 billion people could live in extreme poverty by 2050 if the worst environmental scenario materializes. Specifically, adding 1 billion poor to both Sub Saharan Africa and Asia, which in the baseline cases would have seen the number of people living in poverty drop.
- With this research in mind, at UNDP we strongly advocate for a sustainable human development agenda, which links the fight against poverty and inequalities, inclusive growth and environmental sustainability – as was so clearly emphasized in the outcome of the Rio+20 UN Conference on Sustainable Development. We argue that this is the only option forward because today more than ever if growth is not inclusive and sustainable, it is not development.
- Action on climate change and improving environmental sustainability is essential to eradicate poverty. Those groups who are already disadvantaged bear the harshest repercussions from environmental deterioration. The poor in particular carry a “double burden” of exposure to environmental risks, both in their immediate home environment from air and water pollution, and from such long-term global trends as extreme weather hazards, rising sea levels and climate-related disasters. (people living on ecosystems as an example)
- Let me very quickly given the time constraints highlight some of the specific policies we are advocating for at the national and global levels for further discussion later.
- At the national level, UNDP advocates for policies which strive to raise the incomes of poor households faster than average and protect these gains from shocks and economic volatility.
- That requires policies that invest in human capital, that ensure universal access to critical services, combined with strategies aimed specifically at generating growth in the localities where poor, excluded, and marginalized people live, and in the sectors in which they work creating decent jobs.
- UNDP has also supported the innovative design of social protection schemes, including employment-guarantee schemes, like in India and South Africa, or programs like the conditional cash transfer implemented in Brazil and Mexico that have reduced both poverty and inequality, and achieved significant human development impact through improvements on school attendance and better health outcomes for children, breaking the intergenerational transmission of poverty and inequality.
- We also advocate for policies that actively fight discrimination, which denies people the opportunity to improve their lives, change the prospects of their families, and contribute to their communities and countries.
- And here, let me point specifically to the need to promote gender equality and women’s empowerment as a key strategy for poverty reduction. Special measures to tackle overt discrimination, gender sensitive policies to face women time poverty constraints and access to health and reproductive rights is key.
- My final point here is that women are also key for peace. Conflicts and violence in all its forms destroy lives and livelihoods and have a devastating impact on poverty reduction and human development. Development that is insensitive to the interaction of these factors or is undertaken in the absence of rule of law and security, can deepen risks and vulnerabilities and can be both cause and driver for violence and conflict.
- That is why at the UN we have called for a development framework that goes beyond sectors and accounts for comprehensive and multidimensional outcomes.
- At the global level, eradicating extreme poverty requires action at the global level and support from the international community through official development aid, but also technical support and knowledge sharing.
- To do that we need to start by recognizing, not only that we live in an unavoidably interconnected world, but that we need to incorporate new actors in the development framework. Is not only about governments!
- Greater realization that eradicating poverty is a shared priority and moral obligation for all, and that sustainable development will necessarily require global agreements, has led to new partnerships not only between countries, but also with non-state actors across the private sector, civil society, and philanthropic foundations.
- This is the case of initiative like Global Call to Action Against Poverty (GCAP), I mentioned before , or the Global compact initiative of the Secretary General or the Public Private Partnership for sustainable development we saw in Rio +20.
- We also need to take into account that the geography and geometry of co-operation space has changed.
- We don’t have a simple donor/recipient dynamic anymore, or countries that give while others receive.
- Relevant experiences, policies, technologies and investments can go from the North to the South, from the South to the North and from the South to the South / in a linear, triangular and quadrangular way.
- And finally is also essential to recognize the very important role that policy coherence have in the development outcomes. We need Policy coherence to ensure that different policies, particularly at the global level and in the developed world – whether they relate to trade, national security, migration, intellectual property, or climate change – work in synergy with development co-operation and poverty eradication efforts.
- We have a great opportunity to accelerate progress, towards 2015 and shape the next development agenda for all. So let me finish by sharing not what we think at UNDP but what people around the world have told us. And I call on you to help us.
I said in my introduction that we have carried out the largest consultation the UNS has ever made, bringing not only an amazing number of countries but also of different groups that did not have the possibility of participating before.
Let me summarize people messages in 4 groups:
1. First, they are demanding more inclusivity and greater participation in policy decisions at national and global levels. What citizens around the world told us most frequently was their desire to be a part of decisions which affect them; they want to play a role in changing their world.
They want to have a say in the future framework, monitor the progress made in their countries, and hold governments accountable for its delivery. They don’t want to be “targeted populations” they want to be actors.
2. People want that we finish the uncompleted business of the MDGs: now and beyond 2015. The MDGs are still relevant. Health and education continue to be at the top of the list. But now they want to deepen the MDGs, going beyond the quantitative measurements. They demand not only greater access to basic services, but a new emphasis on the quality of these services. For example, they want us to focus on the quality of the education not only enrolment. They want us to address the lack of qualified teachers, the large classes, the inadequate infrastructure, and the outdated curricula that cumulate in a failure to prepare young people for employment and higher levels of education.
3. They also want a more ambitious agenda beyond 2015, which more fully reflects areas neglected in the MDGs framework like good governance and responsive governments, Energy, employment and livelihood, peace and security, rule of law, human rights, environmental degradation and sustainability.
4. And People want a transformational and universal agenda, which will tackle complex and interlinked challenges in a holistic way and will bring progress across all countries in issues like environment, discrimination, human rights and gender equality.
Ladies and Gentlemen,
The challenge is huge, since we need a very concrete, measurable, manageable, understandable and meaningful set of goals, with a monitoring and accountability framework that will be able to unify and drive the action of all actors at the international and national level like it did for the MDGs.
I ask all of you to get involved, to have your voices heard, and to action through many of the very specific initiatives that are giving voice to different sectors of society.
Oxford, with its university, institutions and civil society constituencies, has been historically a key partner for the world’s development and has contributed with some of the most thorough and independent studies and approaches to human development. You are privileged to be part of this community and I hope that you continue to take these challenges forward and help us to shape public opinion.
This is a communications exercise as much as it is a conceptual exercise. I know many of you have trusted relationships with mainstream media, well developed social media networks, and effective communications mechanisms. Using these communications channels to activate and shape public opinion will be a necessary step in advancing this agenda.
Seeing all of this activity and discussion opportunities like this one here tonight give me real hope. Commitment and ownership will be needed from all of us here this evening. I trust we all will answer to this call.
I thank you all.