Poverty be­yond the num­bers

Financial Mirror (Cyprus) - - FRONT PAGE -

What is poverty? For decades, we have de­fined it with a num­ber, which the World Bank cur­rently puts at a per­sonal in­come of less than $1.90 per day. But a sin­gle num­ber fails to cap­ture the com­plex­ity of poverty. Mea­sur­ing more than just in­come is es­sen­tial to un­der­stand­ing the needs of poor peo­ple and de­liv­er­ing op­ti­mal as­sis­tance.

As the World Bank con­venes its Spring Meet­ings in Wash­ing­ton, DC next week, we have an op­por­tu­nity to set bench­marks that in­clude so­cial and en­vi­ron­men­tal di­men­sions of poverty. The Bank has ac­knowl­edged that more than in­come should be con­sid­ered, and re­cently es­tab­lished a Com­mis­sion on Global Poverty to rec­om­mend ad­di­tional met­rics.

Although many pub­lic and pri­vate groups al­ready col­lect data on a range of is­sues af­fect­ing poor com­mu­ni­ties such as nutrition, ma­ter­nal health, or ac­cess to ed­u­ca­tion, such in­for­ma­tion re­mains largely un­tapped and is rarely shared across in­sti­tu­tions. But there are some bea­cons of light, in­clud­ing the So­cial Progress In­dex, which pro­vides a frame­work for track­ing mul­ti­ple symp­toms of poverty across coun­tries and com­ple­ments tra­di­tional in­come-based mea­sures.

When we rely on a sin­gle num­ber to mea­sure poverty, we mis­di­ag­nose the needs of poor peo­ple. In my home coun­try, Paraguay, I work with one of the coun­try’s largest so­cial en­ter­prises, Fun­dación Paraguaya, to pro­vide mi­cro­fi­nance, ed­u­ca­tion, and train­ing to thou­sands of our poor­est cit­i­zens. We look at 50 met­rics across six di­men­sions of poverty, in­clud­ing in­come, hous­ing, ed­u­ca­tion, and in­fra­struc­ture.

One of our clients, Doña Mercedes, is now a suc­cess­ful mi­cro-en­tre­pre­neur from a ru­ral com­mu­nity not far from the cap­i­tal city of Asun­ción. When she first started with Fun­dación Paraguaya, she was shar­ing a sin­gle-bed­room home with 16 other fam­ily mem­bers and cook­ing meals on a small fire pit on the dirt floor. Now she has a ce­ment floor, a brick house, a sep­a­rate kitchen, and around $500 in per­sonal sav­ings.

By us­ing Fun­dación Paraguaya’s self-eval­u­a­tion on poverty, she was able to un­der­stand her own needs bet­ter and ad­dress them one at time. While tra­di­tional ap­proaches fo­cus largely on es­ti­mat­ing the sources of house­hold ex­penses and in­come, the Fun­dación Paraguaya self-eval­u­a­tion helped Doña Mercedes break down her needs into 50 dis­creet ar­eas that she could work on, piece by piece, and mon­i­tor over time.

For ex­am­ple, she self-eval­u­ated the state of her bath­room and kitchen, the qual­ity of the food eaten at home, the fam­ily’s den­tal health, the num­ber of sep­a­rate bed­rooms in the house, and even her self-es­teem and de­ci­sion-mak­ing ca­pac­ity. A sim­ple poverty map helps her track her progress by us­ing the colours of the stop­light – red, yel­low, and green – and high­light her pri­or­ity ar­eas. Next, she plans to add two more bed­rooms to her house and to work on en­larg­ing her busi­ness.

Fun­dación Paraguaya has been able to repli­cate this type of suc­cess in other parts of the world. In Tan­za­nia, where I worked for three years in ru­ral com­mu­ni­ties, we helped vil­lages in the South­ern High­lands adapt our poverty in­di­ca­tors to the lo­cal con­text in or­der to tackle wa­ter, san­i­ta­tion, and elec­tri­fi­ca­tion needs. Sim­i­lar ef­forts are be­ing de­ployed in South Africa, Nigeria, Uganda, China and be­yond.

We could make even more progress with pub­lic-sec­tor sup­port. Fun­dación Paraguaya col­lects rich data across mul­ti­ple di­men­sions, track­ing more than 8,700 fam­i­lies each year in Paraguay alone. If this in­for­ma­tion were to reach the gov­ern­ment of Paraguay – which has its own meth­ods for col­lect­ing data – we could iden­tify pock­ets of poverty sooner and cus­tomise pro­grammes to help each fam­ily. Be­cause the in­for­ma­tion is self-re­ported, this sort of col­lab­o­ra­tion could de­liver tar­geted aid and high­light spe­cific pub­lic ser­vices that are needed.

More­over, if the World Bank’s Com­mis­sion on Global Poverty adopts mul­ti­di­men­sional poverty mea­sures, it will spur other or­gan­i­sa­tions to pro­duce and share more de­tailed poverty data. That will give aid work­ers a more com­pre­hen­sive poverty map of the world, help­ing to boost the ef­fec­tive­ness of anti-poverty ef­forts ev­ery­where.

It won’t be easy to choose which mea­sures to in­clude, or even how to set uni­ver­sal yard­sticks; but even adopt­ing a few ba­sic ones would spur progress. For too long, oned­i­men­sional mea­sures such as the $1.90 per day guide­line have mis­di­ag­nosed poor peo­ple’s prob­lems – and more im­por­tantly, their causes. We know that the $1.90 per day bench­mark does not fully cap­ture the strug­gles of poor peo­ple in places such as Paraguay.

For­tu­nately, the World Bank now ap­pears to recog­nise the lim­its of its in­come-based in­di­ca­tor. En­sur­ing that the right type of aid reaches those most in need in a timely and ef­fec­tive man­ner re­quires devel­op­ment pol­i­cy­mak­ers to em­brace the type of mul­ti­di­men­sional poverty data that aid or­gan­i­sa­tions like Fun­dación Paraguaya have learned to gather.

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