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Jakarta
There are over 28 million people in Indonesia considered to be poor according to national standards. The Multidimensional Poverty Index, or MPI, focuses on standards of living and measures 10 indicators of multiple deprivations in a household. The 10 indicators include issues of education and health. To be considered multi-dimensionally poor, a person needs to be deprived in at least three out of the 10 indicators.

In Jakarta, 20.8 percent of the population has multiple deprivation and 12.2 percent is vulnerable to multiple deprivations. The intensity of deprivation means the degree to which the average percentage of the people is in multidimensional poverty. As of 2014, this was 45.9 percent.

The population of Jakarta is 10 million at night and increases to 11.2 million in the day as individuals travel into the city for work. As of 2014, the poverty rate and Gini coefficient ratio, a measurement tool for the gap in income, have increased immensely due to increasing rates of inflation and the weaker rupiah. The result is a higher poverty index.

The poverty index ratio increased to 8.9 percent from eight percent in the previous year. The country average for Indonesia is 8.3 percent. The coefficient ratio has gone from a measurement of .364 in 2013 to .436. The ratio illuminates the income distribution among the city’s population as well as the inequality of the economy.

There has been an increase in the poor population from 3.7 percent in 2013 to 4.9 percent. Based on the population of Jakarta, the number of poor has increased from 371,000 to 412,790. Due to poverty, issues of malnutrition, no proper sanitation, lack of electricity and limited educational opportunities are often issues occurring in tandem.

It is important that proper indicators are used to determine the amount of the population that is poor in order to correctly assess their needs. In the words of Amartya Sen, author of the book, “Development as Freedom,” poverty should be seen “as a deprivation of basic capabilities, rather than merely as low income.”

Currently, the national poverty line is based on monetary measures. These measures, utilized by the Millennium Development Goals to indicate the national poverty line, have assisted in growth and processes that have recently been taken by the Indonesian government. In addition, budgeting and planning resources have been observed.

– Erika Wright

Sources: Jakarta Post 1, Jakarta Post 2, U.N. Habitat
Photo: Wikimedia Commons

latin_america_middle_class
When people are asked to picture Latin America, an image of poverty usually comes to mind. Yet while it is true that Latin America has historically been a region of high rates of poverty and income inequality, income inequality has in fact declined in 13 of 17 countries as measured by the Gini coefficient. The Gini coefficient is used to determine the level of income inequality in a country wherein a score of 0 is given to countries with complete equality (countries whose citizens have the same income) while a score of 1 is given to perfectly unequal countries (those in which one person owns all the income).

Recent data by the World Bank suggests that there has been a successful push to reduce poverty in the region, with the number of people living in extreme poverty (defined as those living on less than $2.50 a day) halved to 12.3 percent between 2003 and 2012. The largest proportion of the population, at 38 percent, includes those that are most vulnerable to falling back into poverty. This last part includes those making between $4-$10 a day. The middle class in Latin America is growing extremely rapidly at 34.3 percent of the population and is set to overtake the most vulnerable to become the largest segment of Latin America. The middle class is defined as the number of people who earn between $10-$50 a day.

Yet these numbers are a bit misleading. There continues to be a large degree of inequality between Latin Americans of different ethnicities. In Brazil, 76.4 percent of primary school children who are descended from Europeans are enrolled in school, while only 65.3 percent of indigenous or African children are enrolled. Similarly, in Chile 97 percent of families of European descent are enrolled in school, while 74.4 percent of children of indigenous or African descent are enrolled.

This is significant because as the middle class expands, it’s going to be able to expend more money on disposable goods and fuel economic growth. It will also be interesting to see what happens as the middle class demands more of a stake in the political process.

– Jeff Meyer

Sources: World Bank, IARIW
Photo: Not Adam and Steve

Poverty_in_russia
As the adage goes, the poor stay poor while the rich get richer. For years, Russia has been regarded as a nation fraught with economic inequality- a land where the rich accrue more and more wealth each year while the poor descend further and further into squalor. Even in the advent of the burgeoning middle class, the growing disparity of wealth has contributed to a widening economic gap between Russia’s rich and poor residents.

Although an astounding 18 million Russians, or roughly 13 percent of the population, live below the official poverty line, having a collective income of $12.4 billion, the 97 wealthiest Russians jointly own $380 billion- nearly 31 times the collective income of the nation’s poorest individuals.

While $18 million residents grapple with the challenges of poverty, Vladimir Putin consistently vaunts the exclusive wealth of Russia. In a sense, Russia has exhibited economic growth. For instance, Moscow now houses more billionaires than New York City, the iconic American city that has long been esteemed as the metropolis of wealth and power of the Western World.

Although Putin boasts about the economic prosperity of the few wealthy elites, little effective action has been taken to curb the growing rates of poverty in Russia. For example, the estimated cost of living in Russia is approximately $210. However, the nation’s minimum wage is wholly insufficient at $155 per month.

Despite this harrowing fact, it appears that the 2014 Winter Olympic Games, set to be hosted in Sochi, has taken prominence over the rampant poverty in Russia. In 5a Akatsy Street, located in a neighborhood with deteriorating infrastructure, a brand-new multi-million dollar highway brazenly cuts through the surrounding poverty.

The glossy highway stands in salient contrast to the squalor of 5a Akatsy Street, a locale in which residents have barely sustained themselves without running water or a sewage system. While the Russian government sanctions the construction of stadiums and highways, the majority of Sochi residents live in dwindling, contaminated and neglected villages.

However, the juxtaposition of the ostentatious Olympic preparations in Sochi and the prevalence of squalor surrounding the slinky stadiums and magnificent mega-malls highlights a general trend that has been observed in Russian society, a dangerous trend in which in which the poor are vastly overlooked while the most wealthy are needlessly glamorized.

Phoebe Pradhan

Sources: Telegraph, Forbes, TribLive
Photo:
AsiaOne

africapoverty_opt
Americans are accustomed to equating growth with wealth. The existence of a historically robust middle-class has meant that economic power gets a direct injection into households through income, lower prices on goods and services, and government services funded through taxes.

Translating this thinking to the African context, however, is a naïve mistake, as the most recent Afrobarometer report shows a lingering disparity between African growth and poverty rates.

In the 34 surveyed countries, 17 percent of people frequently go without food and 22 percent lack clean water regularly. A full half of people go without these necessities, as well as cash and medicine, occasionally. Seventy-six percent rate their government as doing a poor job to narrow the income gaps.

The final statistic is significant because it shows that average people are aware of the deep rift between poor and rich. As unrest grows in Nigeria, Kenya, the DRC, and elsewhere, this perceived injustice will be a contributing factor; it has already been the subject of al-Shabbab’s rhetoric in Somalia, and it enabled the organization to earn widespread support for many years.

The extreme dissatisfaction with governments is not wholly fair, though. South Africa, among others, has spent millions in social grants and development to try to combat rampant poverty – but the money has failed to improve the situation. In fact, the gap has widened. While Robert Mattes, one of Afrobarometer’s authors, said that corruption likely played a major role in the grants’ inefficiency – and this is more than likely true in a number of instances – there is also a case to be made that countries giving aid to South Africa have a flaw in their strategies.

The USA, which tops the list of donors, has a unique perspective to offer due to its previously-noted affinity for the middle class and its history of development successes in other countries. A stronger emphasis on the investment of competent professionals, rather than cash, may bring experience and expertise to South Africa, and other nations, which could make the effect of each dollar much larger.

On the whole, poverty has fallen in Africa, but this encouraging statistic must be taken in context. Zambia, for instance, has improved more than most in Africa, but this follows several decades of economic free-fall which reduced it from a middle-income country to a place where three quarters of people are below the poverty line.

As a dominantly rural country, Zambia is also indicative of a continental trend – wealth accumulating in (select sections of) urban nodes, leaving the vast majority of people and land behind. A political system throttled by corruption is effectively the kiss of death on any hope of change in the immediate future.

Small successes, such as the improvement made by MDG-related programs, are not to be dismissed as irrelevant; but neither should the operative word “small” be forgotten when thinking about Africa’s near future. Structural and institutional problems continue to bog down the unflagging efforts of aid and development work.

If the most recent Afrobarometer results reveal one thing, it is that innovative strategies are an absolute necessity if widespread and lasting improvement is to be attained. Traditional, micro-level approaches have been definitively proven ineffective by the survey. So, Americans and everyone else need to confront their presuppositions about growth, aid, and a host of other concepts, to bring them more closely into alignment with practical reality.

– Alex Pusateri

Sources: Al Jazeera, BD Live, Science Blog, Rural Poverty, Zambian Economist
Photo: Sanaga

poverty_india
Last month, when the Indian government claimed that poverty had been cut by a third since 2004, skepticism, public outcry, and heated debate emerged all over the world concerning the latest figures.

How could a country where nearly half of the children under the age of five are chronically malnourished claim to have reduced poverty, many asked.

The fact of the matter is that, according to India’s Planning Commission, extreme poverty fell from 37% to 22% in the past seven years. This leaves the official number of the country’s poor at 269 million out of a population of 1.2 billion.

Instead of rejoicing at the figures, as the world did when China claimed to have reduced the number of its poor by 220 million from 1978 to 2004, many considered the methodology used as an insult to the poor.

The official poverty threshold in India – calculated using the Tendulkar methodology, a forty year-old measurement – is essentially based on the minimum calories consumed by a person.

The problem is that this debatable definition of India’s poor places the poverty line slightly below lowest levels set by the World Bank. There are those earning fewer than 32 rupees (55 cents) in urban areas and 27 rupees (45 cents) in rural areas, incapable of  living at the edge of subsistence. The Tedulkar methodology, based on how much money buys 2,400 calories of food a day, sets the Indian poverty rate at around 10% lower than the World Bank’s rate, equating to roughly 40 million people.

Still, economists like YK Alagh defend the figures. He says that the rapid declines in poverty are mostly due to overall economic growth (8.2% annually in the years 2004-2005 and 2011-2012), an increase in farm growth (3.5% annually), and new jobs.

Others, such as V.K. Srinivasan, chairman of the Indian Institute of Economics, believe that new methods are needed to calculate poverty. He cites the multidimensional poverty index used by the United Nations Development Program as a good example.

“Human development should not be judged in terms of income and expenditure only, but should be done in terms of life expectancy and quality of education,” he said.

Although the debate continues, it is safe to say that at least 1 in 5 Indians still live in extreme poverty. This means that for India, the fight against poverty still has a long road ahead.

– Nayomi Chibana
Sources: Huffington Post, BBC News, The New York Times
Photo: Deutsche Welle,

poverty in panama
To understand poverty in Panama, is to understand geography. Citizens in urban Panama are granted numerous economic opportunities. These opportunities keep jobs being generated and help provide incomes to support communities. With all of these positives coming out of urban Panama, why then is the country so poor? The answer lies in the areas less populated.

Over a quarter of Panama’s more than three and a half million population lives in poverty. The numbers show this poverty in concentrated in rural areas. Nearly half of those living in rural areas suffer from poverty, with a quarter of those people experiencing extreme poverty. For the indigenous people of Panama, the numbers are even worse. Of the indigenous natives in the country, eighty percent live below the poverty line and over half are extremely poor.

Such an extreme difference between poverty in the rural and urban areas can be explained through the geography of Panama. Those living in remote areas aren’t granted the economic opportunities that the cities have to offer. There are less people and therefore fewer jobs. The inability for farmers to sell their products to a broad array of consumers makes agriculture a less stable sector of the economy. Many of the indigenous areas lack roads, so travel to and from these areas is limited. With such a narrow access to the outside world, these citizens are forced to live off of what the land provides. Panama is known to have poor agriculture and cultivation, making it hard for rural citizens to make a living.

Inequality in Panama is astonishing. It ranks as one of the most unequal countries in the world, along with Brazil and South Africa. Panama has a strong urban health care system, but poor health practices are common in the rural areas.

Many citizens in Panama aren’t given the opportunities they deserve simply based off of where they live. Excluding rural citizens from the country’s workforce will keep Panama’s poverty rates consistently high for a long time to come.

– William Norris

Sources: Rural Poverty Portal, World Bank
Photo: Oneonta

World_Poverty_Decline_Borgen_Project_Whitney_Michelle_Whitney_M_Wyszynski_Whitney_Wyszynski

Oxford University’s poverty and human development initiative published a world poverty report.  As world poverty declines, the report notes that “never in history have the living conditions and prospects of so many people changed so dramatically and so fast.”  In fact, if some countries continue to improve at current rates, it is possible to eradicate acute poverty within 20 years.

The academic study measured new deprivations, such as nutrition, education, and health. By examining more than income deprivation, the study is able to convey the bigger picture.  The new methodology is entitled the Multidimensional Poverty Index (MPI).  Past studies identify income as the only indicator of poverty.  This is a misrepresentation because multiple aspects constitute poverty.

The MPI measures poor health, lack of education, inadequate living standards, lack of income, disempowerment, poor quality of work, and threats from violence.  These factors provide a holistic look as world poverty declines.

Dr. Sabina Alkire and Dr. Maria Emma Santos developed the new system.   They named the system “multidimensional” because it is what people facing poverty describe.  “As poor people worldwide have said, poverty is more than money,” Alkire said.

This increased information and understanding better informs international donors and governments.  “Maybe we have been overlooking the power of the people themselves, women who are empowering each other, civil society pulling itself up,” Alkire said.  The new data could incentivize donors to provide assistance.  International and national aid contribute to the declining rates.  Improvements to infrastructure, education, and healthcare help decrease poverty rates.  Trade has improved the economies of Ethiopia, Rwanda, and Sierra Leone.

Rwanda, Nepal, and Bangladesh experienced the greatest decrease in poverty rates.  It is possible that “deprivation could disappear within the lifetime of present generations.”  Close behind in the ranks of poverty reduction were Ghana, Tanzania, Cambodia, and Bolivia.

The study is supported by the United Nations’ recent development report.  The UN report stated that poverty reduction was “exceeding all expectations.”

Check out the MPI interactive world map for more details.

– Whitney M. Wyszynski

Source: The Guardian