Chapter II

Poverty and social equity

1. Defining and measuring poverty
2. Social equity
3. Progress in meeting the millennium development goals on health and education
   
4. Child and infant mortality
5. Gender equity
6. Poverty and the environment
7. Rural poverty
8. Agricultural trade
9. Non-agricultural activity and poverty
10. Poverty and vulnerability
11. Policy implications
    

Widespread poverty and excessive inequality remain the principal challenges in the globalization process that has been under way during the last two decades. Even as economies and Governments adjust in order to give a larger role to markets and a smaller role to the State in development, the importance of public action to deal with poverty and vulnerability has increased. It is for this reason that the World Summit for Social Development in 1995 called upon countries to reduce substantially overall poverty and to eradicate extreme poverty. These goals were re-emphasized in a time-bound and measurable framework by the United Nations as core millennium development goals. These tasks are indeed daunting in the ESCAP region, where in 1998, an estimated 800 million people, or 67 per cent of the world's poor, were living below the international poverty line of $1 per day per capita at 1993 prices (ESCAP 2001d: 15).

This chapter maps out recent trends in poverty and inequality in the ESCAP region, in the light of the Millennium Declaration's target of halving poverty by 2015. The first section provides a brief discussion of current approaches to understanding poverty and vulnerability. The relevant trends of the multiple dimensions of poverty and inequality are identified and discussed. The chapter limits its discussion to income and consumption poverty, and general aspects of human poverty, including gender and environment dimensions.

A. DEFINING AND MEASURING POVERTY

There is currently broad agreement that the multiple dimensions of poverty cannot be adequately explained or addressed by definitions and measurements based only on income or consumption. The income-consumption approach to poverty fails to show the human development outcomes (Sen 1983, 1990; UNDP 1997a). Moreover, gender advocates criticize the use of the household as the unit of analysis in poverty measurement, because it cannot adequately describe women's well-being or lack thereof as a result of intrahousehold inequalities in resource distribution. As some researchers have shown, gender inequality is not necessarily correlated with household poverty (Jackson 1996). Women can be deprived in rich households, and increases in household incomes can coexist with greater inequality in terms of a woman's well-being.

Poverty is a deprivation of essential assets and opportunities to which every human should be entitled. Everyone should have access to basic education and primary health services. Poor households have the right to sustain themselves by their labour and be reasonably rewarded and have some protection from external shocks. These rights and entitlements are understood as "endowments" that people have in any society.

Beyond income and basic services, individuals as well as societies are also poor and tend to remain so if they are not empowered to participate in making the decisions that shape their lives. Poverty is thus better measured in terms of basic education, health care, nutrition, water and sanitation, as well as income, employment and wages. In addition, the poor may not have acquired essential assets because they live in remote or resource-poor areas, or because they are vulnerable on account of age, health, living environment or occupation. They may be denied access to assets because they belong to an ethnic minority or a community considered socially inferior, or simply because they are female or have a disability. At a broader level, poverty may stem from situations where gross inequality of assets persists because of vested interests and entrenched power structures. Finally, essential assets may not be available to the poor because of a lack of political will, inadequate governance and inappropriate public policies and programmes.

The entitlements and capabilities framework of Amartya Sen (1990) provides a more useful approach to understanding poverty, as it emphasizes the whole range of means, not just income, available to achieve human capabilities. These means may include personal security and community participation as well as such indicators from the Human Development Index as literacy, longevity and access to income. Sen's concept of well-being in the form of choice over capabilities is achieved through a combination of entitlements and endowments. Viewed in this way, poverty and deprivation are a result of entitlement failure, rather than scarcity per se. Furthermore, what is implicit in this approach is the idea of human agency to exercise choice over different combinations of capabilities.

The UNDP human poverty indices, which are built on Sen's framework, are useful to monitor and compare experiences of human poverty over time. These indicators, together with the Gender-related Development Index, provide the basis for comparing the gendered experiences of well-being and deprivation, including within the household (Cagatay 1998). They also help in understanding the magnitude of differences in actual well-being between men and women.

Risk and vulnerability to poverty, especially in the context of rapid globalization, have received renewed attention in recent years. Vulnerability to poverty is an important dimension of poverty and deprivation, but it is also a cause of deprivation. Many individuals, households and population groups, while not currently "in poverty", are vulnerable to events that could easily push them into poverty: a bad harvest, a lost job, an unexpected expense, an illness or an economic downturn. Vulnerability may also be seen as determined by the options available to households and individuals to make a living, the risks they face and their ability to handle such risks.

In the light of development experiences in the previous decade, in September 2000, the United Nations Millennium Summit took the commitments of reducing overall poverty and eradicating extreme poverty a step further in adopting a set of time-bound and measurable targets to reduce extreme income poverty as well as some major aspects of human poverty. These include the following:

(a) Between 1990 and 2015, to halve the proportion of people whose income is less than $1 a day and the proportion of people who suffer from hunger;
(b) By 2015, to ensure that children everywhere, boys and girls alike, will be able to complete a full course of primary schooling;
(c) To eliminate gender disparity in primary and secondary education, preferably by 2005, and to all levels of education no later than 2015;
(d) Between 1990 and 2015, to reduce the under-five child mortality rate by two thirds and the maternal mortality ratio by three quarters;
(e) To have halted by 2015 and begun to reverse the prevalence of malaria and other major diseases;
(f) To halve by 2015 the proportion of people without sustainable access to safe drinking water;
(g) By 2020, to achieve a significant improvement in the lives of at least 100 million slum dwellers.

1. Poverty trends in the ESCAP region

In the ESCAP region as a whole, poverty, as measured by income/consumption standards, was declining in the 1990s (table II.1). By subregion, poverty reduction in East and South-East Asia (including China) and the Pacific was quite significant (from 27.6 per cent of the population to 15.3 per cent) in the 1990s. However, over the same period, poverty reduction was slow in South Asia (poverty rates declined from 44 per cent of the population to 40 per cent). The poverty rate rose in Central Asia (from 1.6 per cent to 5.1 per cent). The sharp reduction in the incidence of poverty in East and South-East Asia and the Pacific as a whole, as well as China in particular, has meant that the number of people classified as "income-poor" in these subregions also fell quite substantially during the 1990s. However, in South Asia, which is characterized by a large population and a high incidence of poverty, the smaller reduction in the incidence of poverty has not helped to prevent an increase in the number of income-poor. The largest number of poor people is in South Asia, particularly in India. Moreover, between 1996 and 1998, during which time East Asia was afflicted by financial crises, poverty rose marginally in the whole of East Asia and significantly in China, resulting in an increase in the number of income-poor. Currently, nearly 800 million poor people, two thirds of the world's poor, live in the Asian and Pacific region.

Table II.1. Incidence of extreme poverty by subregion, 1987-1998 (click here to view the table)

The unusually large reduction in poverty in East and South-East Asia and the Pacific between 1993 and 1996 has to be qualified. The data are based on global and regional aggregates computed by the World Bank, using distributions from 265 national surveys in 83 countries, representing 88 per cent of the population of the developing world. Coverage varied geographically. Poverty estimates for individual reference years in many countries have been computed by extrapolation, using the figures on mean consumption from national accounts and assuming that the distribution had not changed since the previous or succeeding survey. This situation makes the statistics yielded by the World Bank's exercise partially unsatisfactory, although the World Bank is the principal source of data for making international comparisons of poverty trends.

Table II.2 shows the incidence of poverty in 16 countries based on country-specific or "national" poverty lines between 1990 and 2000. It shows that poverty was declining in Bangladesh, Cambodia, China, India, Malaysia, the Republic of Korea and Viet Nam. Poverty has increased, however, in eight countries, especially in Indonesia, the Philippines and Thailand, since 1997. Trends in the incidence of poverty, as revealed by the country-specific data, tally with the idea that during the 1990s, which were the years of rapid globalization, the advances registered in the "war against poverty" in a few countries in the Asian and Pacific region have either been weakened or partially reversed.

The first target of the development goals of the Millennium Declaration is to reduce by half, between 1990 and 2015, the proportion of people whose income is less than $1 a day. This is the measure of extreme poverty and the primary indicator for reviewing the implementation of this target. The headcount index estimates the number of people below the poverty line and their proportion to the relevant total population. The difficulty with this measure is that if an already poor person becomes poorer, it makes no difference to measured poverty, that is, the headcount index is insensitive to differences in the depth of poverty. A measure that seeks to deal with this inadequacy is the "poverty gap" measure, which aggregates the poverty deficit of different segments of the poor relative to the poverty line and expresses it as a ratio of the population. The measure captures the average distance of the poor below the poverty line and provides a picture of the depth of poverty.

Table II.2. Percentage of the population below the national poverty lines in selected countries, 1990-2000 (click here to view the table)

In observing the incidence of poverty in terms of the dollar-a-day poverty line (table II.3), the trends are more or less similar to those indicated by national poverty lines. However, it is noted that the data are limited for many countries. In the case of Indonesia and Thailand, dollar-a-day poverty increased between 1996 and 1999, but there was a reduction in 1999. In the case of Papua New Guinea, the rate of poverty reduction declined between 1990 and 1996, but began increasing thereafter. The Lao People's Democratic Republic and the Philippines have been added to the list of countries that show a reduction in poverty. Poverty reduction was very slow in India.

Table II.3. Percentage of the population below the poverty line ($1 a day) in selected countries, 1990-2000 (click here to view the table)

What are the prospects for countries in the ESCAP region achieving the millennium development goal of halving extreme poverty between 1990 and 2015? Available data based on the poverty line of $1 per day show that Indonesia, Malaysia, the Philippines, Thailand and Viet Nam have already achieved the target, provided that there are no reversals in the years ahead prior to 2015. China is close to achieving the target, while Cambodia and the Lao People's Democratic Republic, although having the highest rates of poverty in the region, are making satisfactory progress towards the target. As to the other countries, there are insufficient time-series poverty estimates to draw any firm conclusions. However, it may be assumed that of the 16 countries in table II.3, several will not be able to achieve the target of halving extreme poverty by 2015.

2. Human poverty

Hunger is a cause as well as a result of poverty. By developing region in the world, there are more chronically hungry people in Asia than anywhere else, according to FAO (FAO 2001). In the ESCAP region, concentrations of the hungry poor are found in Bangladesh, the Democratic People's Republic of Korea, India and Mongolia. Currently, 515 million Asians are chronically undernourished, accounting for about two thirds of the world's hungry people. Child malnutrition exacts its highest debilitating toll in the Asian and Pacific region, especially in South Asia. The millennium development goals call for a reduction in the number of hungry people by 20 million annually at the global level if the target of halving the incidence of hunger is to be achieved by 2015; 14 million of those 20 million people annually are to be from the Asian and Pacific region. But this is not happening. Anthropometrically also, over two thirds of the 174 million undernourished children under five years of age in the developing world are Asians. More than half the young children in South Asia are estimated to suffer from protein-energy malnutrition, which is about five times higher than the prevalence in the western hemisphere, at least three times higher than the prevalence in the Middle East and more than twice that of East Asia. It is currently widely accepted that malnutrition is the major cause of child mortality in developing countries as a whole. What is even more alarming is the high incidence of low-birth-weight babies in South Asia. The prevalence of low-birth-weight babies provides a good indicator of the nutritional status of mothers. Nutritionally handicapped infants and children may suffer from handicaps in brain development, thereby having serious repercussions on the intellectual potential of countries in this region.

Chronic hunger dulls intellects, thwarts productivity and leads to ill-health, keeping people and communities from realizing their potential. Hunger and micronutrient deficiencies are estimated to decrease children's learning capacity by up to 10 per cent. For poor families, hunger-related illness adds to household costs and increases the burden of care for healthy family members. Disease has added to this burden. For example, those living with AIDS are not only unable to work on the land but they need a more nutritious diet which their families may be unable to provide.

The two recommended indicators to monitor the progress in achieving the target to reduce hunger are the prevalence of underweight children under five years of age and the proportion of the population below the minimum level of dietary energy consumption.

Available comparative time-series data on underweight children and the proportion of the total population below the minimum level of dietary energy consumption are limited. From what data are available (table II.4), the proportion of underweight children under five years old in most countries of South Asia was over 40 per cent in 1990, in Nepal it was 51 per cent and in Bangladesh and India it was over 60 per cent. South Asia also had the highest percentage of undernourished populations (27 per cent). Moreover, during the 1990s, progress in reducing undernourishment in these countries was slow, although India recorded an increase of almost 19 percentage points. In South-East Asia, the rates of undernourishment are generally lower but the rates of progress were also slow in the 1990s, except for Thailand, which achieved a 50 per cent reduction in the decade. In fact, progress in reducing undernourishment was slow in all Asian subregions in the 1990s; in the Pacific subregion the situation has worsened.

Table II.4. Prevalence of underweight children (under five years of age) and proportion of the population below the minimum level of dietary energy consumption (click here to view the table)

Owing to lack of data, it is difficult to predict the achievement of the millennium development goals in this respect. There are some countries, however, which have produced progress reports. The findings from Nepal show that, despite some improvements, it appears unlikely that overall food insecurity and child undernutrition will be halved by 2015 (United Nations Country Team, Nepal, 2001). Viet Nam can potentially achieve the target but not in the case of disadvantaged areas in the country's North-Central region, Central Highlands and Northern Highlands, where malnutrition is still over 40 per cent (United Nations Country Team, Viet Nam, 2001).