Whither the bottom billion?
Consider the following facts about the world’s poorest of the poor: In 1988, those living on less than $1.25 per day, a global standard poverty line, numbered over 1.6 billion people. Ninety-three percent of them, approximately 1.5 billion, were to be found in low income countries. Fast forward to 2008, twenty years later, and over 1.3 billion people continue to survive on less than $1.25 daily; however, seventy-two percent of them, nearly 1 billion people, now live in middle income countries.
We can make three observations about these facts.
First, despite a global consensus around the Millennium Development Goals (MDGs) – pushed by celebrities, well-meaning academics and front-line workers alike – the absolute number of those living in poverty in 2008 remained extremely high – in fact, 1.3 billion high. It is safe to say, we’ve not done a very good job of reducing global poverty.
Second, whereas the vast majority (93%) of the world’s poorest of the poor in 1988 lived in poor countries, in 2008, the vast majority of the world’s impoverished (72%) lived in middle income countries such as China, India, Indonesia, Brazil, South Africa and Russia. In 1988, poor people lived in poor countries, but in 2008, poor people were to be found in much richer countries. In other words, we have figured out how to make once-poor countries less poor, but the poor people living in those richer countries have remained very poor. Aggregate growth – the developmental orthodoxy of the 1980s – has not resolved global poverty. Countries have become richer, but millions living in those countries have not.
Which leads me to a third observation: tackling global poverty is increasingly a challenge of redistribution, not just growth. Obviously economic growth is necessary and desired; after all, growing the pie means more to be shared. However, growth alone, as the data suggests, is not enough. To mitigate poverty requires redistribution, the active transfer of resources – and with it, opportunities for income generation – from the haves to the have-nots.
Now, I’m not talking about socialism here (a bad word in many parts of the world). Rather, the facts tell us that public policies need to increasingly attend to the imperatives of redistribution. This means that national governments need to consider policies that allocate resources to lift the bottom. I’m talking basic stuff here. Access to health. Infrastructure development, like roads and sanitation. Food security. Livable shelter. These things, basic and often taken for granted, nonetheless cost. And those living on less than $1.25 per day can’t spare even that little. But the haves can.
This also bears implications on how we do and think about development assistance. Foreign aid to promote growth needs to remain a top priority. Of course. But alongside economic growth, development assistance programs must also target resources to ensure a greater redistribution within and from without nations.