DRANT #208: THE CAUSES OF POVERTY

Causes of Poverty
by Anup Shah
This Page Last Updated Friday, November 24, 2006
http://www.globalissues.org/TradeRelated/Facts.asp.

Consider the following poverty statistics:

1. Half the world — nearly three billion people — live on less than two dollars a day. source 1
2. The GDP (Gross Domestic Product) of the poorest 48 nations (i.e. a quarter of the world’s countries) is less than the wealth of the world’s three richest people combined. source 2
3. Nearly a billion people entered the 21st century unable to read a book or sign their names. source 3
4. Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn't happen. source 4
5. 51 percent of the world’s 100 hundred wealthiest bodies are corporations. source 5
6. The wealthiest nation on Earth has the widest gap between rich and poor of any industrialized nation. source 6
7. The poorer the country, the more likely it is that debt repayments are being extracted directly from people who neither contracted the loans nor received any of the money. source 7
8. 20% of the population in the developed nations, consume 86% of the world’s goods. source 8
9. The top fifth of the world’s people in the richest countries enjoy 82% of the expanding export trade and 68% of foreign direct investment — the bottom fifth, barely more than 1%. source 9
10. In 1960, the 20% of the world’s people in the richest countries had 30 times the income of the poorest 20% — in 1997, 74 times as much. source 10
11. An analysis of long-term trends shows the distance between the richest and poorest countries was about:
* 3 to 1 in 1820
* 11 to 1 in 1913
* 35 to 1 in 1950
* 44 to 1 in 1973
* 72 to 1 in 1992 source 11
12. “The lives of 1.7 million children will be needlessly lost this year [2000] because world governments have failed to reduce poverty levels” source 12
13. The developing world now spends $13 on debt repayment for every $1 it receives in grants. source 13
14. A few hundred millionaires now own as much wealth as the world’s poorest 2.5 billion people. source 14
15. “The 48 poorest countries account for less than 0.4 per cent of global exports.” source 15
16. “The combined wealth of the world’s 200 richest people hit $1 trillion in 1999; the combined incomes of the 582 million people living in the 43 least developed countries is $146 billion.” source 16
17. “Of all human rights failures today, those in economic and social areas affect by far the larger number and are the most widespread across the world’s nations and large numbers of people.” source 17
18. “Approximately 790 million people in the developing world are still chronically undernourished, almost two-thirds of whom reside in Asia and the Pacific.” source 18
19. According to UNICEF, 30,000 children die each day due to poverty. And they “die quietly in some of the poorest villages on earth, far removed from the scrutiny and the conscience of the world. Being meek and weak in life makes these dying multitudes even more invisible in death.” That is about 210,000 children each week, or just under 11 million children under five years of age, each year. source 19
20. For economic growth and almost all of the other indicators, the last 20 years [of the current form of globalization, from 1980 - 2000] have shown a very clear decline in progress as compared with the previous two decades [1960 - 1980]. For each indicator, countries were divided into five roughly equal groups, according to what level the countries had achieved by the start of the period (1960 or 1980). Among the findings:
* Growth: The fall in economic growth rates was most pronounced and across the board for all groups or countries.
* Life Expectancy: Progress in life expectancy was also reduced for 4 out of the 5 groups of countries, with the exception of the highest group (life expectancy 69-76 years).
* Infant and Child Mortality: Progress in reducing infant mortality was also considerably slower during the period of globalization (1980-1998) than over the previous two decades.
* Education and literacy: Progress in education also slowed during the period of globalization. source 20
21. Water problems affect half of humanity:
* Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation.
* Almost two in three people lacking access to clean water survive on less than $2 a day, with one in three living on less than $1 a day.
* More than 660 million people without sanitation live on less than $2 a day, and more than 385 million on less than $1 a day.
* Access to piped water into the household averages about 85% for the wealthiest 20% of the population, compared with 25% for the poorest 20%.
* 1.8 billion people who have access to a water source within 1 kilometre, but not in their house or yard, consumpe around 20 litres per day. In the United Kingdom the average person uses more than 50 litres of water a day flushing toilets (where average daily water usage is about 150 liters a day. The highest average water use in the world is in the US, at 600 liters day.)
* Some 1.8 million child deaths each year as a result of diarrhoea
* The loss of 443 million school days each year from water-related illness.
* Close to half of all people in developing countries suffering at any given time from a health problem caused by water and sanitation deficits.
* Millions of women spending several hours a day collecting water.
* To these human costs can be added the massive economic waste associated with the water and sanitation deficit.… The costs associated with health spending, productivity losses and labour diversions … are greatest in some of the poorest countries. Sub-Saharan Africa loses about 5% of GDP, or some $28.4 billion annually, a figure that exceeds total aid flows and debt relief to the region in 2003. source 21
22. The richest 50 million people in Europe and North America have the same income as 2.7 billion poor people. “The slice of the cake taken by 1% is the same size as that handed to the poorest 57%.” source 22
23. The world’s 497 billionaires in 2001 registered a combined wealth of $1.54 trillion, well over the combined gross national products of all the nations of sub-Saharan Africa ($929.3 billion) or those of the oil-rich regions of the Middle East and North Africa ($1.34 trillion). It is also greater than the combined incomes of the poorest half of humanity. source 23
24. A mere 12 percent of the world’s population uses 85 percent of its water, and these 12 percent do not live in the Third World. source 24
25. Consider the global priorities in spending in 1998
Global Priority $U.S. Billions
Cosmetics in the United States 8
Ice cream in Europe 11
Perfumes in Europe and the United States 12
Pet foods in Europe and the United States 17
Business entertainment in Japan 35
Cigarettes in Europe 50
Alcoholic drinks in Europe 105
Narcotics drugs in the world 400
Military spending in the world 780

And compare that to what was estimated as additional costs to achieve universal access to basic social services in all developing countries:
Global Priority $U.S. Billions
Basic education for all 6
Water and sanitation for all 9
Reproductive health for all women 12
Basic health and nutrition 13
source 25

26. Number of children in the world
2.2 billion
Number in poverty
1 billion (every second child)
For the 1.9 billion children from the developing world, there are:
* 640 million without adequate shelter (1 in 3)
* 400 million with no access to safe water (1 in 5)
* 270 million with no access to health services (1 in 7)
Children out of education worldwide 121 million
Worldwide,
* 10.6 million died in 2003 before they reached the age of 5 (same as children population in France, Germany, Greece and Italy)
* 1.4 million die each year from lack of access to safe drinking water and adequate sanitation
Health of children

Worldwide,
* 2.2 million children die each year because they are not immunized
* 15 million children orphaned due to HIV/AIDS (similar to the total children population in Germany or United Kingdom) source 26

27. The total wealth of the top 8.3 million people around the world “rose 8.2 percent to $30.8 trillion in 2004, giving them control of nearly a quarter of the world’s financial assets.”
In other words, about 0.13% of the world’s population controlled 25% of the world’s assets in 2004. source 27
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Notes and Sources

1) This figure is based on purchasing power parity (PPP1), which basically suggests that prices of goods in countries tend to equate under floating exchange rates and therefore people would be able to purchase the same quantity of goods in any country for a given sum of money. That is, the notion that a dollar should buy the same amount in all countries. Hence if a poor person in a poor country living on a dollar a day moved to the U.S. with no changes to their income, they would still be living on a dollar a day. In addition, see the following:

* Ignacio Ramonet, The politics of hunger 2, Le Monde diplomatique, November 1998
* The 9th International Anti-Corruption Conference3 Plenary Address by James Wolfensohn, August 2000
* March recognizes the billions living on less than two dollars a day4, EarthTimes.org, October 24, 2000
* The poverty lines: population living with less than 2 dollars and less than 1 dollar a day5 from PovertyMap.net provides two maps showing the concentration of people living on less than 1 and 2 dollars per day, around the world.
* Also note that these numbers, from the World Bank, have been questioned and criticized.
o The World Bank has been criticized for almost arbitrarily coming up with a definition of a poverty line to mean one dollar per day6 (of which they say there are about 1.3 billion people). That figure and how it has been chosen has been much criticized by many, as shown by University of Ottawa Professor, Michel Chossudovsky in the previous link.
o In addition, as also stated in the previous link, in the United States for example, the poverty threshold for a family of four has been estimated to be around eleven dollars per day. The one dollar a day definition then misses out much of humanity to understand the impacts. Even the two dollars per day that I have pointed out here, while affecting half of humanity, also misses out the numbers under three or four, or eleven dollars per day. These statistics are harder to find, and as I come across them, I will post them here!
o As an aside, Morgan Spurlock, the Oscar nominee for his documentary Super Size Me where he went 30 days on a diet of burgers only to see the effects, produced another documentary where for 30 days he tried to live on the minimum wage of $5.15 per hour7. At times he was earning $50 to $70 a day and yet the tremendous hardships he faced was incredible (including a ludicrous $40 for a bandage in a hospital, and some $500 for just being seen to).
o More fundamental than that though, for example, is a critique from Columbia University, called How not to count the poor 8. The report describes an ill-defined poverty line, a misleading and inaccurate measure of purchasing power equivalence, and false precision as the three main errors that may lead to “a large understatement of the extent of global income poverty and to an incorrect inference that it has declined.” (Emphasis added). This allows the World Bank to insist that the world is indeed “on the right track” in terms of poverty reduction strategy, attributing this “success” to the design and implementation of “good” or “better policies”.
* But the statistic is not lost on some of the most prominent people in the world
o The New York Times in one of their email updates, in their Quote of the Day section, for July 18, 2001 provided the following quote: “A world where some live in comfort and plenty, while half of the human race lives on less than $2 a day, is neither just, nor stable.” — President Bush
o See also James Wolfenson, The Other Crisis, World Bank, October 1998 who said: “Today, across the world, 1.3 billion people live on less than one dollar a day; 3 billion live on under two dollars a day; 1.3 billion have no access to clean water; 3 billion have no access to sanitation; 2 billion have no access to electricity.” (See also note 21 below.)
o Koffi Anan, UN Secretary General, in a speech9 on the International Day for the Eradication of Poverty, 17 October 2000, said “Almost half the world’s population lives on less than two dollars a day, yet even this statistic fails to capture the humiliation, powerlessness and brutal hardship that is the daily lot of the world’s poor.”

2) Ignacio Ramonet, The politics of hunger10, Le Monde Diplomatique, November 1998

3) The State of the World’s Children, 199911, UNICEF

4) State of the World12, Issue 287 - Feb 1997, New Internationalist

5) See the following:

* Holding Transnationals Accountable13, IPS, August 11, 1998
* Top 200: The Rise of Corporate Global Power14, by Sarah Anderson and John Cavanagh, Institute for Policy Studies, November 2000

6) The Corporate Planet15, Corporate Watch, 1997

7) Debt - The facts16, Issue 312 - May 1999, New Internationalist

8) 1998 Human Development Report17, United Nations Development Programme

9) 1999 Human Development Report18, United Nations Development Programme

10) Ibid

11) Ibid

12) Missing the Target; The price of empty promises19, Oxfam, June 2000

13) Global Development Finance20, World Bank, 1999

14) Economics forever; Building sustainability into economic policy21 PANOS Briefing 38, March 2000

15) Human Development Report 200022, p. 82, United Nations Development Programme

16) Ibid, p. 82

17) Ibid, p. 73

18) World Resources Institute Pilot Analysis of Global Ecosystems, February 2001, (in the Food Feed and Fiber section23). Note, that dispite the food production rate being better than population growth rate, there is still so much hunger around the world.

19) See the following:

* Progress of Nations 200024, UNICEF, 2000;
* Robert E. Black, Saul S Morris, Jennifer Bryce, Where and why are 10 million children dying every year?25, The Lancet, Volume 361, Number 9376, 28 June 2003. (Note, while the article title says 10 million, their paper says 10.8 million.)
* State of the World’s Children, 2005, UNICEF (this cites the number as 10.6 million in 2003)

Note that the statistic cited uses children as those under the age of five. If it was say 6, or 7, the numbers would be even higher.

20) The Scorecard on Globalization 1980-2000: Twenty Years of Diminished Progress 26, by Mark Weisbrot, Dean Baker, Egor Kraev and Judy Chen, Center for Economic Policy and Research, August 2001.

21) 2006 United Nations Human Development Report 27, pp.6, 7, 35

22) Larry Elliott, A cure worse than the disease28, The Guardian, January 21, 2002

23) John Cavanagh and Sarah Anderson , World’s Billionaires Take a Hit, But Still Soar29, The Institute for Policy Studies, March 6, 2002

24) Maude Barlow, Water as Commodity - The Wrong Prescription30, The Institute for Food and Development Policy, Backgrounder, Summer 2001, Vol. 7, No. 3

25) Consumerism31, Volunteer Now! (undated)

26) State of the World’s Children, 2005 32, UNICEF

27) Eileen Alt Powell, Some 600,000 join millionaire ranks in 2004 33, Associate Press, June 9, 2005
Online Sources:

(Note that listed here are only those hyperlinks to other articles from other web sites or elsewhere on this web site. Other sources such as journal, books and magazines, are mentioned above in the original text. Please also note that links to external sites are beyond my control. They might become unavailable temporarily or permanently since you read this, depending on the policies of those sites, which I cannot unfortunately do anything about.)
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1. 'PPP Glossary Definition', Biz/ed web site, http://bized.ac.uk/cgi-bin/glossarydb/browse.pl?glostopic=1&glos
id=401
2. http://mondediplo.com/1998/11/01leader
Note, if the above link has expired, please try the following alternative
http://www.zmag.org/crisescurevts/hunger.htm
3. http://www.transparency.org/iacc/9th_iacc/papers/day1/plenary/d1
pl_jwolfensohn.html
4. Web Archive’s archive of the article, http://web.archive.org/web/20010321003640/http://www.earthtimes.
org/oct/developmentmarchrecognizesoct24_00.htm
5. http://www.povertymap.net/mapsgraphics/index.cfm?data_id=23417&t
heme=
6. Prof. Michel Chossudovsky, 'Global Falsehoods: How the World Bank and the UNDP Distort the Figures on Global Poverty', TFF, 1999, http://www.transnational.org/features/chossu_worldbank.html
7. '30 Days Minimum Wage', More4 (part of Channel 4 in the UK), first broadcast November 2005, http://www.channel4.com/more4/documentaries/doc-feature.jsp?id=12
8. Sanjay G. Reddy and Thomas W. Pogge, 'How not to count the poor', Columbia University, June 14, 2002, http://www.columbia.edu/~sr793/count.pdf
Note, if the above link has expired, please try the following alternative locations:
* This reposted version is in HTML, whereas the original link is to a PDF document
http://www.brettonwoodsproject.org/article.shtml?
cmd[126]=i-126-241b14a5be9a5b47cd5a88778ac79532
* Institute of Social Analysis, an organization set up by Colombia University
http://www.socialanalysis.org
9. http://www.un.org/events/poverty2000/messages.htm
10. http://mondediplo.com/1998/11/01leader
11. http://www.unicef.org/sowc99/index.html
12. http://www.newint.org/issue287/keynote.html
13. http://www.oneworld.org/ips2/aug98/16_20_084.html
14. http://www.ips-dc.org/reports/top200.htm
15. http://www.corpwatch.org/trac/feature/planet/fact_3.html
16. http://www.newint.org/issue312/facts.htm
17. http://hdr.undp.org/reports/global/1998/en/
18. http://hdr.undp.org/reports/global/1999/en/
19. http://www.oxfam.org.uk/press/releases/target.htm
20. http://www.worldbank.org/prospects/gdf99/
21. http://www.panos.org.uk/global/reportdownload.asp?type=report&id
=1000&reportid=1006
22. http://hdr.undp.org/reports/global/2000/en/
23. http://www.wri.org/wr2000/agro_food.html
24. http://www.unicef.org/pon00/immu1.htm
25. http://www.thelancet.com/journals/lancet/article/PIIS01406736031
37798/fulltext
26. http://www.cepr.net/globalization/scorecard_on_globalization.htm
Note, if the above link has expired, please try the following alternative
http://www.attac.org/fra/toil/doc/cepr05.htm
27. http://hdr.undp.org/hdr2006/
Note, if the above link has expired, please try the following alternative
Full report, 8Mb in size
http://hdr.undp.org/hdr2006/pdfs/report/HDR06-complete.pdf
28. http://www.guardian.co.uk/debt/Story/0,2763,636624,00.html
29. http://www.ips-dc.org/projects/global_econ/billionaires.htm
30. http://www.foodfirst.org/pubs/backgrdrs/2001/s01v7n3.html
31. http://volunteernow.ca/take_action/issues_consumerism.htm
32. http://www.unicef.org/sowc05/english/index.html
Note, if the above link has expired, please try the following alternative locations:
* Actual report
http://www.unicef.org/sowc05/english/sowc05.pdf
* Home page for the report
http://www.unicef.org/sowc05/
* News report mentioning these stats from Inter Press Service
http://ipsnews.net/new_nota.asp?idnews=27504
33. http://www.charlotte.com/mld/charlotte/business/industries/11853
644.htm
Note, if the above link has expired, please try the following alternative locations:
* http://news.yahoo.com/s/ap/world_wealth
* Google search result
http://www.google.com/search?lr=&ie=UTF-8&oe=UTF-
8&q=Some%20600%2C000%20join%20millionaire%20ranks%20in%202004
* http://thinkprogress.org/index.php?p=1062

* by Anup Shah
* Created: Monday, July 20, 1998
* Last Updated: Friday, November 24, 2006

“When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist.” — Dom Helda Camara

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