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The Road to Zero Extreme Poverty

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published
8 May 2014

The Chronic Poverty Report 2014-2015 initiates a new approach to tackling extreme poverty in developing countries, “shin[ing] a light on the millions of people worldwide who are thought to be living in chronic poverty”. Andrew Shepherd, Director of the Chronic Poverty Advisory Network (CPAN) explained to capacity4dev.eu the issues and challenges on the “road to zero extreme poverty”.

There have been two previous reports on Chronic Poverty, in 2005 and 2008. They mainly focused on identifying chronically poor people, their location and adequate policies to tackle extreme poverty. Talking about the current report, Mr Shepherd explains that it is “a little bit more ambitious, because the world is talking about ending extreme poverty in our lifetimes. This report is really a reflexion on what is required in order to achieve that noble goal.” 

 

The Chronic Poverty Report 2014-2015 The Chronic Poverty Report 2014-2015

Indeed, for the first time in human history, the aim of public policies is “getting to zero” by 2030, which means a total eradication of extreme poverty in the world. By “extreme poverty”, the report refers to the monetary standard of $1.25 per person per day.  “We also, in the report, use a lower measure, a lower poverty line, which we call ‘severe poverty line’, and this is $0.70 per person per day, and we use this because this is actually the average income of poor people in Africa. There’s a very large number, especially in Africa but also elsewhere, of people who are way below the poverty line”, explains Mr. Shepherd.

 

For this ambitious goal, three objectives will be pursued: tackling chronic poverty, stopping impoverishment and sustaining poverty escapes. These objectives are called the “Zero Poverty Tripod”, and they represent the triple action that must take place to eradicate poverty. 

The first goal focuses on tackling chronically poor people, who have been poor all their lives and then “pass on” this poverty to their children. The main issue is to bring these people out of the poverty circle, for example by better including them in the economy.

The second is to stop impoverishment, which means preventing people from falling into poverty. “There is a large number of people who become poor for many different reasons: natural disaster, conflicts, ill-health, etc. So there are all sorts of public policies again, which are needed to stop people becoming poor”, explains Mr. Shepherd. 

The third objective is to sustain poverty escapes: “many people having escaped poverty are at risk to fall back in it”, highlights Mr. Shepherd. “And sometimes it’s very large proportions of people who escaped poverty who fall back in it.  So you need, as a public policy maker, to think about these people, so that they get well away from the danger zone.”

The Executive Summary describes the three different policies - each requiring an important investment - addressed to each leg of this tripod. They are:

  • Social Assistance: improving people’s standard of living by giving social security and insurance of life. “One prime example of social assistance that has been taken to scale is Ethiopia’s Productive Safety Net Programme, which has enabled thousands of vulnerable households to withstand drought without having to cut back on education spending.”, illustrates the report. For Mr Shepherd, social assistance is also simply giving people money, sometimes in exchange for work, to provide them the guarantee that their children can go to school or have access to hospitals.
  • Massive investment in education: as written in the Executive Summary, this investment in education “enables escapes from poverty and sustains the climb away from it, also has the advantage of being a ‘portable asset’ that is resilient to crises”. The best way to do that, for Mr Shepherd, is to try keeping children at school from preschool years until teenage years at least. For him, basic primary school is not enough. Another important challenge to tackle is to link educated people with the labour market to ensure that they are employable once they leave school.
  • Pro-poorest economic growth: For Mr. Shepherd, this consists in a “bundle of measures which will make sure that economic growth, which is essential, will also benefit the poorest people”. These measures include minimum wages for the poorest workers (especially those working in fragile conditions like in agriculture, construction, domestic work, etc.), health care, social security, etc.

 

 

In practice, countries will need to invest in implementing a combination of these measures in order to tackle poverty. Yet how will these investments be financed? The report considers that “the financial resources required for the likely health and education goals are predominantly domestic (as are accompanying politics)”. This means that countries themselves should invest more to eradicate poverty within their borders. “Many countries are spending less than $1,000, and 44 countries spend less than $500 per person per year, total expenditure! On everything: defence, foreign policy, absolutely everything,” explains Mr Shepherd. “Countries that are at that level are going to really struggle to produce the resources over the next 20 years to finance poverty eradication. Even countries above the $500 level will struggle. So, efforts to improve tax take and then of course to spend the money well, need to be redoubled.” 

In this situation international aid also remains important. Mr Shepherd believes that “there is a need for continued aid. The report argues very strongly that there are many countries that will need continued aid for a considerable period of time to come”. 

The financing process also raises another important question: the distinction between low-income countries (LIC) and middle-income countries (MIC). “The distinction between LIC and MIC is quite an artificial distinction. You know, a country suddenly becomes a MIC when it’s actually only a dollar wealthier than it was a few minutes ago.” For Mr Shepherd, this notion is too vague and can dangerously trigger decisions and negotiations that can have a long-term impact. Mr Shepherd believes that once a country is classified as middle-income, it should not be abandoned by the international community, but continue to receive support until development becomes sustainable. 

The report also looks at the projected poverty levels by 2030 between fragile and non-fragile states to see if there is a difference between the two. Using the $1.25 measure of poverty both categories remain balanced, however, using the severe poverty measure of $0.70 fragile states take slightly greater share of those living in poverty. The report notes that politics can be particularly challenging in fragile states, “but LMICs with high or rapidly growing inequality also face significant political challenges in balancing the demands of their growing middle classes and the needs of the poorest and most vulnerable, who generally have little or no voice in the process”. 

Finally, the Chronic Poverty Report stresses the “political resources and strategies required are [...] considerable. To summarise a thread of political analysis running through the Chronic Poverty Report: eradicating poverty is as much a political as a technical exercise.” Governments have to consider how they can integrate these new strategies into their policies, and to choose the most appropriate measures depending on their conditions and needs. 

As massive changes will take time, there are also intermediate measures that can be carried out. For example, in the video, Mr Shepherd speaks about better birth registration, so that everyone gains the same rights from the government. There are many other initiatives that should take place to eradicate extreme poverty around the world, but while the “Road to zero extreme poverty” will probably be long and tough, the new objectives still give an encouraging view of the future level of extreme poverty in the world.

Mr Shepherd thinks this report presents a “realistic picture of the Road to Zero Extreme Poverty”.

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This collaborative piece was drafted by Maria-Laetitia Mattern with input from Viriginia Manzitti and with support from the capacity4dev.eu Coordination Team.

DISCLAIMER: This information is provided in the interests of knowledge sharing and capacity development and should not be interpreted as the official view of the European Commission, or any other organisation.

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