Tuesday, 6 May 2003

Poor, but pedicured

It appears that those at the bottom are getting richer - but sadly the maths just doesn't add up

by George Monbiot


George Monbiot The global economy is working. The rich may be acquiring an ever greater share of the world's wealth, the ecosystem may be collapsing, but - or so we believe - the poor are emerging from poverty. This is portrayed as the ultimate test of the great neo-liberal experiment: if, as the world's resources are privatised and its corporations deregulated, the war against poverty is being won, then the accompanying inequality and destruction can be accounted as little more than collateral damage.
There is only one set of figures which provides a global view of whether the incomes of the poor are rising or falling, and it is cited everywhere. The trend, it suggests, is slow but significant: between 1990 and 1999, the percentage of the world's people living in absolute poverty fell from 29% to 23%. Ugly as some of its characteristics may be, the existing economic model is helping the poor.

The figures are compiled by the World Bank. It claims to know, to within the nearest 10,000, how many of the world's people are living below the international poverty line. The response of those who criticise the way the global economy works is to accept the bank's calculations, but to argue that there are more equitable and less destructive means of achieving the same results. But the figures are without foundation.

A new paper by the economist Sanjay Reddy and the philosopher Thomas Pogge demonstrates that the World Bank's methodology is so flawed that its calculations cannot possibly be correct. Not only does it appear wildly to underestimate the level of global poverty, but the downward trend it purports to show appears to be an artefact of the way in which it has been compiled. The World Bank's figures, against which the success or failure of the entire global economy is measured, are useless.

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