World Poverty: India and the World Bank

thCA3XI2NSIndia is beset with so many problems, it is quite difficult to

"Poverty is the worse form of violence."

“Poverty is the worse form of violence.”

know where to start. The country is a priority for the World Bank (WB) and its target of reducing world poverty to 3% or below by 2030 based on the recorded figure of 33% of the world’s poor living in the sub-continent. The Bank has stipulated that the number of people in poverty has been reduced; the problem is on whose figures do we rely?

Numerous surveys have been carried out on India and its poverty. Looking back to 2004/2005 we can see at first hand the dilemma with statistics and how they can be manipulated to suit a political agenda. The National Commission for Enterprise argued that 77% of Indians lived below the poverty line. In response the National Government revised the figures and as if by magic arrived at a figure of 60.5% in poverty. Around the same time BBC India put forward a 37.2% rate of poverty.

The dilemma is what criterion is used to define poverty and how is it to be measured. There are so many bodies out there each with their own political agenda; we may never get a cohesive response unless people force an agenda upon them.

Moving forward to 2009 the picture is just as confusing:

Official: 328m            Economic Survey: 710m                   World Bank @ $1.25: 488m

The disparity between the sets of figures is alarming. The government line of 328m

I see dignity in colour!

I see dignity in colour!

which it promoted to the people of India is massively out of kilter with the WB estimate of 488m. How can 160m people be lost in the ether of statistical analysis? It is an unequivocal statement from the Government of India that its credibility is more important than respect for the poor. The Economic Survey number may seem completely out of step but keep it in mind.

We now need to take another step forward to 2010 to find poverty at 29.8% UN, CIA, BBC, up to 32.7% for the WB and a 37% for economywatch.com. Don’t you just love those precise percentage fractions e.g. 29.8% – 32.7%. How can they be so precise and yet so different, it can only be a computer generated figure based on input data. So whose data is right? The CIA and the BBC accept the UN number and simply repeat it as gospel. How are we to know any different?

Two of the world’s top organisations UN & the WB and they can’t put their heads together and fathom a procedure that all can agree upon. Or is this a classic case of intellectual property, (measuring stick) being more important than a true understanding of how many poor people there are? Alternatively it could be more adverse; they might not have a clue! Ah, little boys and their competitive nature.

Confusion comes in many colours and in 2011 the picture of India can only be described as modern art. The UN Development Goals Report predicts a substantial reduction in poverty of 320m in India and China by 2015. A reduction from 51% to 22%: Here we go again, making promises that will not be kept. The UN must hope that people read the figures, feel good and quickly forget, without digesting the headline percentages.

It surely was a bad time for the UN office wallah because other indices contradict them:thCA7GXR8D

  • The world recession has plunged another 100 million Indians into poverty.
  • The Global Hunger Index states that hunger levels rose in India but fell in other developing countries.
  • More poor in India than sub-Sahara Africa.
  • Poverty in Orissa and Bihar are among the world’s most extreme.
  • 53% of children are undernourished. 2010/2011.

The list could be larger but carries sufficient information to cast reasonable doubt on the veracity of the UN’s crystal ball.

However, the government of India may give some succour to the UN with their poverty guidelines (2011) of 32 rupees a-day (64 cents) in cities and 26 rupees (52cents) against a $1.25 of the WB. Needless to say, but I must, using these numbers poverty can be quickly reasoned down. Critics do point out that the government figures are equivalent to a ‘starvation line’ and the poverty numbers are ‘cosmetic’. www.onlineindia.com/facts/poverty

Life does not get tougher.

Life does not get tougher.

An article in May 2012 highlighted that 60% of rural India live on less than R35 a-day but that the lowest 10% have to manage on R15 a-day. www.articles.economictimes.indiatimes.com/. From a different angle we are told that between 350 – 400m live below the poverty line and 75% are from the rural districts. When using the WB’s other determinant of $2 a-day the numbers leap to 830m from a population of 1.2/1.3 billion. (onlineindia.com)An inequitable dilemma for these people is that an estimated 40% are illiterate which suggest they have little hope in the short term of changing their circumstances.

Such numbers seem to incredible to be true but if we glance back to the 2009 ‘Economic Survey’ with its estimate of 710m then the figures might not be so fantastical after all. A further study by the, Oxford Poverty and Human Development Initiative, using the Multidimensional Poverty Index (MPI) generates a figure of 650m in poverty, 54% of the population of which 340m are characterized as in ‘severe’ poverty.

  • MPI includes several indicators: health, education, standard of living: access to: good sanitation, cooking fuel and water etc.

The litany of horror continues: in 2009 the United Progressive Alliance Government thCAZRCAA8promised to ensure ‘food security’ for all the people. Sadly they have rolled back the initial commitment and the system is failing. So much for ‘United’ and for ‘Progressive’! This is happening at a time when an estimated “63% of India’s population gets inadequate nutritional intake”. (June 2013) www.guardian.co.uk/global-development/ Note the figure of 53% of kids under nourished in 2010. Add the stink of 50% having no access to toilets, of 1600 dying every day from diarrhoea. Compound that with large numbers who have no access to running water or to electricity. All the figures above should act as a wakeup call to the politicians as to where their priorities must lie!

Is there a solution on the horizon? In 1996 the World Food Summit set a target to reduce undernourishment by 50% by 2015. I don’t know the total figure for undernourishment throughout the globe but by 2010 there were an estimated 925m that fitted under that umbrella. And it would seem they have failed India! In 1990 the World Summit for Children identified two microminerals: iodine and iron, and a micronutrient vitamin A as essential for good growth. “The Summit set goals for the elimination of these deficiencies.” (en.wikipedia.org/wiki/Micronutrient). Politicians love their ‘summits’ it’s just a pity they don’t have an effective follow up.

Mates

Mates

The story is taken up again in May 2012 in the city of Copenhagen in Denmark. Only 22 years later. The conference, named the Copenhagen Consensus had a panel of experts that included four (4) Nobel Prize winners in economics. Several research papers were commissioned to ascertain the most cost effective way to promote welfare. The premise was that they had a total of $75bn to spent on a given research piece. Sixteen studies warranted investment and the top of the list was micronutrients to include a zinc supplement as a treatment for diarrhoeal disease. In consequence a Micronutrient Initiative was set up based in Ottawa, Canada to research and bring forward a programme. We wait with bated breath.

India’s ability to help the WB to achieve its objective of reducing poverty to 3% or below is in jeopardy. Since 1981 the population of India has increased by over 500m. Economists argue that population increase by and of itself does not cause poverty but then there may be circumstances whereby it does. If you are born into a society that places barriers such as: illiteracy, caste system and a government that denies your existence; then it is hard to understand how a huge increase in population stymied by such cultural dams does not affect poverty.

The burden of poverty is not a state of mind that one can step out of. It is not a walk-in, walk-out spectrum; for many it is a cultural straitjacket. This is certainly the case with

Even the poor have self respect!

Even the poor have self respect!

India. If India is to progress in the 21 century then barriers, such as those mentioned above need to be smashed asunder.

Illiteracy and other cultural barriers have a further long term effect on the nation’s development that being the creation of a viable home market. With a population of 1.2/1.3bn a domestic demand could prove crucial to long term economic stability. The country has exhibited a real ingenuity from those already educated thus the prospects are enormous. At present India loses many of its highly educated to more enterprising nations

A significant barrier that may take longer to eradicate is corruption. India’s institutionalised predilection for corruption does not augur well for the future.

“From an individual’s point of view, time and capital are better spent making political connections and offering bribes, both of which are more lucrative and efficient than making an honest living.” Jayant Bhandari, www.proactiveinvestors.com. The light cannot be more focussed or more revealing and thus more damning than that statement.

On a positive note, Jagdish Bhagwati, an economics professor writes:

Economic growth fuels demand for labor, so low wages in developing countries are bound to rise, as they have in China.” www.news.columbia.edu/global/3180

It is a point of view that would sit well at the table with WB dignitaries. However, putting all your eggs in one basket is not always a good idea. India has had an industrial spurt and little has changed. Output is now slowing down: in 2007 GDP was 9% presently it stands at 4.5% and inflation is running at 9% (CIA). Of course the drop in performance coincides with the world recession and that will account for some of the fall. Bhagwati’s analysis does not answer the question as to why India lags behind China in investment when wages in India are a quarter of what they are in China. One would have thought that the big companies keen to make a killing would cause a stampede. Unfortunately for India, “It will be a mediocre-at-best investment destination for the next decade.” (proactiveinvestors.com)

Equally damaging to the reputation of India is the extent of ‘black money’ brought to the fore by the Central Bureau of Investigation, (Feb: 2012). The issue was raised in the supreme court that the CBI believe a sum of $500 billion is being stashed away in tax havens by the rich and or corrupt rather than invest in their own country. Not much encouragement for foreign investors.

thCAEWBOHOIndicators suggest that India is not in a position to lead the field when the world economy picks up. Change is required. Top of the agenda is ‘corruption’ which can have a fatal effect on planning and development. Second comes ‘infrastructure’ which has reached breaking point and improvement seems a long way off. “Infrastructure investments are dominated by political manipulators corruption runs so deep.” Jayant Bhandari. The third partner in the transformation is education which is a prerequisite for a vibrant economy. All of which requires a massive cultural shift and a government strong enough to implement necessary change.

Two decades of an industrial spurt and many were talking of an emerging superpower. The WB and its acolytes were singing hallelujah as though they had discovered the ‘Holy Grail’: then came the world recession.

There is such a farrago of figures that no one is quite sure what is happening in India. The World Bank’s desire has come up against India’s cultural backwardness and the alchemy will not work. World poverty is as stubborn as a politicians statistical spin.

 

 

 

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