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The future of poverty policy

20 December 2019

New ways of measuring and tackling poverty are making crucial progress, but the scale of the problem is large, and many challenges and negative trends remain. Addressing these will be crucial to ending poverty, Sharon Bessell writes.

In 2015, world leaders agreed to the Sustainable Development Goals. Goal 1 is to end poverty in all its forms everywhere. This marked a significant shift in global policy, refocusing poverty alleviation strategies from income alone to a far broader set of issues.

So how far have things come in the past five years as policymakers, service deliverers, and activists grapple with the challenge of ending poverty in all its forms everywhere? Three trends are worth considering as the new decade dawns.

First, in terms of global priorities, Goal 1 signals a welcome shift. There is no doubt that increasing incomes among the poor is critically important, and must remain a priority – both globally and within countries.

Equally, it is important to recognise that low income is not the only characteristic of poverty. The structural barriers that prevent individuals and social groups from moving out of poverty reflect deep-seated inequality and discrimination that are unlikely to be dismantled by a marginal increase in incomes.

Similarly, poor quality of health care, education, and other essential services available to many are the product of insufficient and unequal public spending and investment. Individuals need very large increases in their income to be able to buy higher quality services – and such purchases may never be possible for those who are excluded due to discrimination and stigma.

As the global definition of poverty has broadened to include dimensions beyond income, an important development, policymakers have improved their ability to measure multidimensional poverty.

The Individual Deprivation Measure is a powerful example of how poverty measurement is being rethought.

It allows decision-makers to include in their understanding of poverty access to and quality of essential services, its non-material dimensions, like voice and social relationships, and intersectional analysis that reveals which social groups are being left behind.

Central to new approaches is a recognition that poverty cannot continue to be measured at the level of the household. An important step forward came in 2016 when the World Bank initiated the Global Commission on Poverty, which stated that decomposition of household-level data is simply insufficient – poverty must be measured on an individual basis.

Debates about how to measure poverty are not simply a theoretical exercise with little practical relevance, they matter deeply and determine a response. When the multidimensional nature of poverty is in the picture, policymakers are better able to identify and respond to structural barriers, deeply entrenched discrimination, and services that continually fail the poor.

When poverty is measured at the individual level, policy can move beyond the already discredited idea that resources are shared equally within a household. Decision-makers can better identify which social groups are most disadvantaged and why. Governments and service providers are able to respond on the basis of evidence.

The second trend occurring globally is a steady decline in extreme poverty – measured as those living on less than $1.25 prior to 2015, now revised upwards to those living on less than $1.90.

In 1990, 36 per cent of the world’s population lived in extreme poverty. By 2010, that figure decreased to 16 per cent, and by 2015 was at 10 per cent. At the end of 2018, the World Bank observed that extreme poverty was at its lowest level ever.

This is a remarkable achievement. However, two issues must be kept in mind. First, the international cut-off for extreme poverty is very low. If it were increased to just $3.20, one-quarter of the world’s population would be living in poverty. A little further – to $5.50 – and 46 per cent of the world’s population would be defined as poor.

While great progress has been made, we cannot afford to be sanguine – the misery of poverty still affects half of all people around the globe.

In many countries, those who remain in poverty are those who are hardest to reach. For example, in Indonesia, poverty based on the national poverty line dropped below 10 per cent in 2019.

While the significance of this milestone should not be underestimated, in terms of numbers, 26 million people remain below the very low national poverty line.

For Indonesia, the greatest challenge remains. The most severely marginalised people – those hardest to identify and hardest to reach – are yet to move out of poverty. This is reflected across the region and the world.

The third global trend provides a less optimistic story – and one likely to undermine the achievements of recent years. It is a story in two parts.

First, the record of some of the wealthiest countries in addressing poverty in all its forms over the past five years is dismal.

In Australia for example, one in six children live in income poverty. In the United Kingdom, where government spending on children has fallen dramatically in recent years, child poverty is at 30 per cent. The apparent preparedness of wealthy countries to abandon efforts to end poverty is alarming.

It is even more so considering the apathy of these countries towards the global shift to assessing multidimensional poverty, rather than income alone, a change that has generally resulted in poverty measurements moving up to reflect reality. If the multidimensional nature of poverty in these countries was measured and included the stigma and shame that is created by unjust policies, these figures would be far worse.

The second part of this story is the failure of leaders to seriously address the climate emergency. Without action, new groups will be plunged into poverty and achievements in reducing global poverty could go into reverse.

Over the past five years, there have been positive trends in addressing poverty around the world. The adoption of ending poverty as a global goal, the shift towards multidimensionality in both assessments of and responses to poverty, the recognition that poverty must be assessed at the individual level, and the continuing downward trend in extreme income poverty globally are all great achievements.

However, they are countered by deeply disturbing trends, especially in wealthy countries, and the link between the climate emergency and poverty. These challenges must be addressed, or the last five years of progress may go to waste. If they are not addressed, it will amount to simply abandoning the most vulnerable to their fates, and settling for a world that is divided and deeply unjust.

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