Extreme poverty is falling



World Bank said that “Extreme poverty is falling” and that “the world we live better and absolute (or “extreme”) poverty fell for the first time to below ten percent of the global population. ”
Words that made speechless many researchers.

“Economic growth reduces poverty” said World Bank President Jim Yong Kim. The gradual reduction of poverty would have been due thank to the high growth rates in developing countries. “This should give new impetus to the most effective strategies to end extreme poverty. An extremely difficult challenge, especially in a period of slower global growth, financial instability, volatile markets, conflict, high youth unemployment rates, and climate change. But we are on track to achieve the goal of ending extreme poverty by 2030”, he continued.

Otherwise the latest update of the World Economic Outlook of International Monetary Fund reported of a decline in global growth. “New factors supporting growth – said Olivier Blanchard, chief economist of the organization of Washington – as the fall in oil prices, but also the depreciation of the euro and the yen, are more than offset by the persistence of negative forces, including the legacy of the crisis and the weaker potential growth in several countries”.

The truth is that IMB changed the extreme poverty line (that was $ 1.9 per day). This means that to be considered in absolute poverty, a man should have a daily income of less than or equal to this amount. Recently, someone decided, without any valid reason and without any geopolitical or economic motivation, to move the extreme poverty line to of 1.20 dollars a day. This means that those who had a daily income of $ 1.50 and until recently it was considered in absolute poverty, now it no longer is. It is always “poor”, but not in extreme conditions.
This modification of the extreme poverty line, however, has great consequences in the presentation of the global data. While in 2012 there were 902 million (equal to 12.8 percent of the population) in extreme poverty, in 2015, thanks to this change, the absolute poors are less than 702 million, 9.6 per cent of the world population.
Richard Moro, economist, said: “To want to be a little “bad”, we could say that this reduction is false, because it comes from the fact that we changed, for some time, the data to calculate the form in which it calculates extreme poverty”. And “If we look at what these people are able to buy, perhaps with inflation that there has been in recent years, the dollar and 90’re not so sure it will help appears the same things that were bought with a first dollar”.
Another macroeconomic index confirms that absolute poverty is not going down. Gini index (the number between 0 and 1 that evaluates the concentration of money: an higher index means that inequalities between different social classes are elevate). The worldwide Gini index average is 0.38 (and growing).

World Bank experiment was just an attempt to present the state of the art in a less tragic form. May be the attempt to reach goals such as the Millennium Development Goals (MDGs), presented by the United Nations in 2000. One of these (the first) was “halve by 2015 the proportion of the global population whose income was less than one dollar a day” (http://www.unmillenniumproject.org/goals/gti.htm#goal1)
Unfortunately nowadays, absolute poverty in the world has not diminished (much less it has been reduced by half). Maybe that’s why the “experts” of international organizations decided to change the poverty rate….

The President of the World Bank, Jim Yong Kim said: “It’s the best news of the day – these projections show that we are the first generation in history to have the opportunity to end extreme poverty.”

His words has been written in many newspapers. And you will read on history books that in 2015 “poverty fell below the threshold of ten per cent,” … but, unfortunately the poor will continue and get poorer ….

C.Alessandro Mauceri



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