poverty and hunger

Corvinus University of Budapest

UN Summit on the Millennium Development Goals
MDG 1: POVERTY AND HUNGER

Budapest
2013
CHAPTER 1: Reduce by half the proportion of people living on less than a dollar a day Extreme poverty in the world has decreased considerably in the past three decades. In 1981, more than half of citizens in the developing world lived on less than $1 a day. This rate has dropped dramatically in 21 percent in 2010. Moreover, despite a 59 percent increase in the developing word’s population, there were significantly fewer people living on less than $1 a day in 2010 (1.2 billion) than there were three decades ago (1.9 billion). But 1.2 billion people living in extreme poverty is still a extremely high figure. Extreme poverty headcount rates have fallen in every developing region in the last three decades. And both Sub-Saharan Africa and Latin America and the Caribbean seem to have turned a corner entering the new millennium. After steadily increasing from 51 percent in 1981 to 58 percent in 1999, the extreme poverty rate fell 10 percentage points in Sub-Saharan Africa between 1999 and 2000 and is now at 48 percent – an impressive decline of 17 percent in one decade. In Latin America and the Caribbean, after remaining stable at approximately 12 percent for the last decades of the 20th century, extreme poverty was cut in half between 1999 and 2010 and is now at 6 percent.1 However, despite its falling poverty rates, Sub-Saharan Africa is the only region in the world for which the number of poor individuals had risen steadily and dramatically between 1981 and 2010. There were more than twice as many extremely poor living in Sub-Saharan Africa in 2010 (414 million) than there were three decades ago (205 million).2 As a result, while the extreme poor in Sub-Saharan Africa represented only 11 percent of the world’s total in 1981, they now account for more than a third of the world’s extreme poor. India contributes another third (up from 22 percent in 1981) and China comes next contributing 13 percent (down from 43 percent in 1981).3 How poor are the extremely poor? Have they become pooprer in the last three decades? Figure 44 plots the average daily per capita income of the extremely poor in the developing world as a whole, in the Sub-Saharan Africa region, and the developing world excluding SSA. As shown, the average income of the extremely poor in the developing world has been rising and steadily converging to the $1 per day poverty line. In 2010, the average income of the extremely poor in the developing world was 87 cents per capita per day, up from 74 cents in 1981 (in 2005 US dollars). If the extreme poor in Sub-Saharan Africa were not included, the average income of the world’s poor would have converged even faster to the $1 line. This increase in incomes of the extreme poor in unfortunately not seen in Sub-Saharan Africa. Between 1981 and 2010, the average income of the extremely poor has remained flat at approximately half of the $1 line in that region. Accelerating extreme poverty reduction is a huge challenge in both Sub-Saharan Africa and South Asia, given that there are approximately 400 million and 500 million extreme poor people in these regions respectively. The depth of extreme poverty is commonly measured by the extreme poverty gap. When expressed in dollars based on Purchasing Power Parity (PPP) calculations, the extreme poverty gap represents the average amount of additional daily income needed by the extremely poor to reach the poverty line of $1 per day. Thus, from figure 45, we can see that the average gap of the extremely poor in the world is 38 cents per day, or approximately $140 per year in 2005 PPP dollars. Since there are 1.2 billion extremely poor individuals in the world, the aggregate extreme poverty gap amounts to approximately $169 billion dollars in 2005 PPP dollars, or approximately $197 billion in 2010. Measuring poverty continues to be a barrier to effective policymaking. In many countries, the availability, frequency and quality of poverty monitoring data remain low, especially in small states and in countries and territories in fragile situations. Institutional, political and financial obstacles hamper data collection, analysis and public access. The need to improve household survey programs to monitor poverty in these countries is urgent. The main programs of Mdg 1.A are:
Department of Agriculture
I. Banner Programs
II. Locally-Funded Projects
III. Foreign-Assisted Projects
IV. Other Programs
Department of Agrarian Reform (DAR)
I. Land Acquisition and Distribution (DAR, DENR, LRA, LBP)
II. Agrarian Justice Delivery (DAR)
III. Program Beneficiaries Development (DAR, DENR, DTI, NIA, DPWH, DOLE)
Department of Social Welfare and Development (DSWD) I. KALAHI-CIDSS: KKB
II. Pantawid Pamilyang Pilipino Program
III. Social Pension
IV. Shelter Assistance Program
V. Center-Based Services
VI. Community-Based Services
The target of reducing extreme poverty rates by half was met five years ahead of the 2015 deadline, as the global poverty rate at $1.25 a day fell in 2010 to less than half the 1990 rate. 700 million fewer people lived in conditions of extreme poverty in 2010 than in 1990. However, at the global level, 1.2 billion people are still living in extreme poverty. The percentage itself is quite deceiving, as it is estimated that the goal was met in large part due to India, China (in 20 years it dropped its poverty rates from 60% to 16%) and East Asia.6
The World Bank projects that, by 2015, about 970 million people will still be living on less than $1.25 a day in countries classified as low- or middle-income in 1990. Sub-Saharan Africa and Southern Asia will each be home to about 40 per cent of the developing world population living in extreme poverty. This lack of progress towards achieving the MDG goals in African countries stirs up one of the program’s biggest criticism: that “it arguably neglects the very poorest by focusing on percentages and non-universal cover for the most part and towards achieving quantified targets at the expense of quality”.
The one thing that has to be done in order to reverse the tendency for helping a few and ignoring the poorest is a major overhaul of the international aiding structure. An enforcement of the funding commitment is needed. Over the past 35 years, UN members have repeatedly "committed 0.7% of rich-countries' gross national income (GNI) to Official Development Assistance". In 2005 the EU reinforced this commitment, stating that 80% of the countries who exceed the UN target for ODA are member-states. However, the US as well as other countries have opposed specific foreign-aid targets, and many of the OECD countries’ contributions have been non-existent or fell short of the goal.
An additional critique of the mechanism being used is that the MDGs seek to introduce local change through external innovations supported by external financing. If there is any hope for reversing the present trends in African and Southern Asian countries, the financing has to be met with simultaneous advances through community initiative, building from resources of solidarity and local growth within existing cultural and government structures. The change has to be internal, and most of the existing barriers to development are not money-related. One of the biggest problems nowadays in the formulation of economic policies to combat poverty in the aforementioned regions is the lack of data collection, analysis and access to information about these areas. This is the result of institutional, political and financial obstacles, the same obstacles that misplace funds and discourage private investment by some countries. Thus, we can see that, in the future, there has to be an additional focus from all of the international community in delineating and enforcing these objectives, and social and economic progress have to be simultaneous.
CHAPTER 2: Achieve full and productive employment and decent work for all, including women and young people
Target 1.B of the first MDG focuses on achieving full and productive employment and decent work for all, including women and young people. The main indicators chosen to measure the success of the target are the growth rate of GDP per person employed, the employment-to-population ratio, the proportion of employed people living below $1.25 (PPP) per day, and the proportion of own-account and contributing family workers in total employment (vulnerable employment).
As we can see in the graph7, GDP per person employed (1990 constant prices PPP)8 has risen considerably over the last 8 years, with the world GDP per person employed (1990 constant prices PPP) rising almost 4000$. China is the biggest success story with a jump from 6517$ in 2003 to 14196$ in 2011. India is also enjoying considerable success with an increase of over 3000$. Available data places most of the African countries at the bottom of the list (ranging from 1000-3000$).9
After experiencing worldwide modest growth (0,5%) from 2003 to 2007, the employment-population ratio took a big hit following the economic crisis. The global ratio took a fall of 1% (61.3% to 60.3%) from 2007 to 2012, with the biggest contributors being falling labor force participation and rising unemployment. In this time period, the global economic and financial crisis left a 67 million jobs gap (unemployment increased by 28 million, and an estimated 39 million people have dropped out of the labor market). The developed regions registered a 1.7% drop, while the developing regions experienced a decline of 0.9% (2.1% in Southern Asian and 1.5% in Eastern Asia). The gender gap in employment persists, with a 25% difference in 2012 (biggest differences are found in Northern Asia, Southern Asia and Western Asia). Negative labor-market trends for youth accounted for 41% of the decline in the global employment-population ratio, due to rising unemployment and falling participation.10
Even with the global financial and economic crises, the number of workers living in extreme poverty has declined dramatically over the past decade. Since 2001, the number of workers living with their families on less than $1.25 a day has declined by 294 million, leaving a total of 384 million below this threshold classified as the ‘working poor’. The global decline is attributed in large part to the dramatic reduction in extreme poverty among workers in Eastern Asia which, due to rapid economic growth, and to poverty reduction especially in China, saw the number of poor workers fall by 158 million between 2000 and 2011, and by 24 million between 2007 and 2011. Nevertheless, altogether, 60.9 per cent of the developing world’s workforce remained poor or ‘near poor’ in 2011, living on less than $4 a day, stressing the need for improved productivity, as well as the promotion of sustainable structural transformation and social protection systems that ensure basic social services for these workers and their families.11
Vulnerable employment (defined as the sum of the percentages of unpaid family workers and own-account workers in total employment) accounted for an estimated 58 per cent of all employment in the developing regions in 2011. This number as only slowly decreased in the last 10 years. In fact, the proportional decrease was so slow that the absolute number increased by 136 million in this time period, bringing the total up to 1.52 billion. The main reason for this increase is the continuous expansion of the labor force in developing countries where vulnerable work is more common, and this in turn reflects the widespread prevalence of informal work arrangements, which results in low pay and lack of social protection for the workers, in a clear violation of their fundamental rights. Once again we see that women are far more likely to engage in this type of arrangements, a reflection of the gender gap in employment. We can see that the gap is widest in North Africa, and the total share is highest in Sub-Saharan Africa.12
Special international programs that have been launched - When we are talking about decent work we must have in mind “four inseparable, interrelated and mutually supportive pillars: employment, rights, social protection and social dialogue.”13 So, all the programs developed by United Nations, in order to achieve the Millennium Development Goals related with full employment and decent work, have to be in accordance with these pillars. There are an infinitive number of programs, nevertheless, we will just analyze some of them. India - Indian National Rural Employment Guarantee Scheme (NREGS) - In 2006, National Rural Employment Guarantee Scheme (NREGS) was launched in India. Adopting a rights-based approach, this program is supported by a law which gives “100 days of employment a year to at least one member of any rural household who is willing to perform unskilled labour for the minimum wage.”14 NREGS comes as an important intervention in creating employment opportunities, building rural productive facilities (water management systems, rural roads…) and avoiding the migration to urban areas. In this sense, the NREGS acts as a safety regulator that can prevent any depression of living standards in rural areas and it has now become an integral part of the rural economy. In terms of outreach, the program has done considerably well. “While 99.6 percent of the sample households were aware of the scheme, […] 84.6 percent of households had applied for a job-card under the scheme.”15 Within job-card holders, nearly 90 percent got employment for at least a day since the beginning of the program. The major lacuna in implementation has been the fact that on average, households have received only 20 days of employment as opposed to the minimum 100 days promised under the program. Political affiliations influenced, in some cases, the number of days of employment that households could get. Women Entrepreneurship Development & Gender Equality Program (WEDGE) - In over 25 countries, programs on Women’s Entrepreneurship Development and Gender Equality (WEDGE) have reduced poverty through the creation of decent work and women’s empowerment16. In 2007 the program reached over 10,000 women and 9,000 men, providing access to credit. Monthly profits of participants’ businesses increased their sales fourfold and their profits by 50 per cent. The SIYB (Start and Improve Your Business) strategy has reached 940,000 entrepreneurs, mostly women, over the last decade and has helped create over 1.2 million jobs. However, the gap between men and women, concerning with job, stills being very evident17.
Program on Continuous Apprenticeship - The Program on Continuous Apprenticeship aimed to achieve a positive co-relation between education and work for young people, and, so, it gives students a theoretical and practical training as well as work experience. The program took place in areas with high local rates of poverty, illiteracy and unemployment. The majority of the students who completed their training were recruited. “The program has broad implications for achievement of MDG 1 in Egypt, where the youth employment to population ratio was 23 per cent and youth unemployment was 27 per cent in 2002 when the pilot was launched.”18
The Bolsa Família (“family stipend”) - The Bolsa Família (“family stipend”) was launched in 2003 and is generally considered to be the largest conditional cash transfer program in the world. In 2009 it covered 50 million people, corresponding to about one-quarter of Brazil’s population.19 The program has a number of specific objectives related with the reduction of poverty and inequality. However, a recent change to the program has been its integration with the Child Labour Eradication Program (PETI). In 2008, 875 000 children were pinpointed as workers. This has led to the necessity to ensure children’s attendance at school. “Similar programs have been implemented in several other countries, a successful example being the Oportunidades program in Mexico, the first to be implemented on a national scale.”20
What would you recommend be done to achieve the original goals?
As it is said above, there are lots of programs that have been a success and extremely important for the development of certain regions/countries. However, other programs have some lacunas and are not well-implemented, which make the progress slow in reducing vulnerable employment.21 So, there is a long path that must be followed to achieve full employment and decent work for all.
Firstly, there is a need for “persistent effort centered on quality jobs, sustainable enterprises, efficient public services, and social protection, while safeguarding rights and promoting voice and participation”22. Due to this, more efficient programs are requested, such as the “green jobs programs”, which relates the need for better jobs with the quest for environmental friendly jobs, promoting the so called green economy.
Secondly, we need to have in mind that global-level politics could not be as successful as politics established between two countries/regions, because in this last case both parts are focused on the same objective. In specific situation, for specific problems, no global policies will be need, but rather state policies. In bilateral relations we can also include the relations between developed countries, which have lots of qualified people, but a huge rate of unemployment, and countries that are in development and that need skilled people to help them. As an example of this situation we can mention the relations between Portugal and Angola. Thirdly, it is important to analyze the differences between Brazil/China/India and other small countries that are also into the Millenium Programs. Huge and economically developed countries are, logically, more able to be successful in other areas, such as, eradicate poverty, offer better jobs’ conditions, and that’s why these countries are growing faster than others. So, there is a need for interdependence and mutual help between these countries. Regarding China, we can say that the “one-child policy” is a good solution both for the employment rates and for the elimination of poverty, and, in this way, we can acknowledge that demographic politics have a great impact on all other politics, in a spill over logic.

CHAPTER 3: Reduce by half the proportion of people who suffer from hunger
The third and final “target” within the first Millennium Development Goal (MDG1) is to “reduce by half the proportion of people who suffer from hunger”23. To identify the success or lack of success of this goal, the UN has narrowed their focus to understand the prevalence of underweight children who are under five years old, in addition to studying the proportion of the population who live below the minimum level of dietary energy consumption. It is very important to note that the Food and Agriculture Organization of the United Nations (FAO) is primarily responsible for collecting and presenting their findings that concern the state of this issue. It is equally as vital to understand the language that they use in their findings. The FAO often examines the proportion of the population who are “undernourished”, which is the state, lasting a year or more, of inability to acquire enough food, where “enough food” is defined as a level of food intake insufficient to meet dietary energy requirements24. The FAO has concluded that there is a so-called “hunger trap” in which food insecurity leads to poor labor productivity, which leads to low incomes and thus lower food availability25. This is a very difficult trap to break from unless one of these facets can be altered from an external source. For example, if a new manufacturing plant locates to a rural area with a high percentage of undernourished people, this could be a positive, external change that may bring about higher salaries. However, this scenario is rather unlikely, and in reality, it is very difficult to break away from the hunger trap. Worldwide, 842,000,000 live their daily lives in an undernourished state26. Of the 842 million people, 97.9% of them live in undeveloped or developing countries27. This is not necessarily a surprising statistic, but one that may put into perspective the dire assistance that the developing countries need from the developed ones. As previously mentioned, it is the developed countries that will provide the manufacturing plant or other external factor that can break the hunger trap. The MDG1 set a target to decrease the number of hungry people in the world to 12% of the total population28. In the time period 1990-1992, this percentage was 24%. Currently, the world is on track to have 13% of its residents living in an undernourished state by 201529. Therefore, say the authors of the State of Food Insecurity in the World, “we need immediate and substantial action” because the goal is currently attainable, but only if the upmost effort is given in the next fourteen months30. Despite this remarkable decrease in such a short time period, it must be noted that since 1990-1992, the number of hungry has fallen by 17%31. This can be interpreted to say that the proportion of hungry people has fallen by almost 50%, yet the actual figure of hungry people has dropped by 17%. Ideally, these numbers would be equal because it can be deceiving to put emphasis on the proportion of hungry people, which is heavily influenced by the world population growth rate. Of the 842 million undernourished people, 100 million of those are children who are under the age of five years old32. Naturally and biologically, the first years of a human’s life are the most important. This is where they develop and grow the fastest. However, with a lack of nutrition comes an inability to grow properly, and the result is stunted growth. In the hungriest country in the world, Burundi, nearly 60% of the children have their growth stunted due to a lack of proper diet33. In order to best address these problems, several different tactics have been researched and introduced in different places. Intuitively, it is clear that there is not one common solution to this problem. Each region has their geographic and situational differences that make it necessary to tailor solutions to particular regions. For example, a program in Malawi has allowed 100,000 farmers to get cash through mobile phones that they can then spend at the market34. The money comes from UKAID, which is the UK’s international development organization. Farmers and market-goers who sign up for the program will be given a low-cost mobile phone, and they will receive monthly text messages that enable them to collect money from local agents. This is a very logical way of attacking the problem because in Malawi, the issue is not a lack of available food. In fact, there is a surplus of food, but it is difficult to sell or buy it because it is not affordable to the farmers. Therefore, this is an excellent demonstration of the necessity of an external source to eradicate the hunger trap. UKAID is providing additional income, which will hopefully serve to intervene in the hunger trap and allow these people good fortune. There are many programs that are similar to this one in other countries. For example, in Afghanistan, the World Food Programme (WFP) provides vouchers to approximately 30,000 Afghanis to allow them to go to the market as customers rather than beggars35. They are then able to buy a varied assortment of food. Whether it is money or vouchers, the service of providing money to hungry people is the most direct form of intervention to the hunger trap, and perhaps the most important method of eradicating hunger. In Haiti, the FAO has determined that 5.1 million of the total 10.3 million population is undernourished36. This is nearly half of all citizens of the state. To eradicate this problem, the WFP has taken initiative and introduced new ways of dealing with the problem in Haiti. WFP has launched efforts to buy local rice and milk from Haitian farmers, which they in turn distribute to the schools in the surrounding areas37. This is a very strong program because it tackles two significant problems: children developing correctly with proper nutrition and the stabilization of farmers’ production and sales. By distributing food to local schools, it gives kids food that they may not be receiving at home, and this also results in a desire to go to school. A desire to go to school, of course, is beneficial because it keeps children from the streets, and it gives them an education. The stabilization that WFP provides to the farmers is tremendously important because it gives the farmers a sense of security that when they produce food, somebody will buy it. Without this security, farmers are reluctant to produce food, which then can lead to food shortages. This is a less direct form of intervention to the hunger cycle, but for each hungry region different methodologies will be more efficient.
What would you recommend be done to achieve the original goals?
To achieve the first Millennium Development Goal (MDG1), is necessary the help and support of the developed countries who have the money and the facts to eradicate malnutrition and hunger in the most affected countries.
As mentioned above, can not be found the same solution to the problem, because each country has different geography and each situation is different, so it is important to examine in depth the most affected countries, and solutions are found as the example of Haiti, to eradicate the root problem, creating farmers security (adult people) and feeding children healthy, ensuring healthy children in the future.
Undernourished and hunger is a problem in which we can all contribute, in most developed countries are international or even national (those countries who also has a lot of poverty and undernourished like Mexico) programs that support this cause, what is needed is to make people aware and conscious, that we all have the ability to support and donate some money to a cause that affects millions of people worldwide.
CONCLUSION

Despite this impressive achievement at the global level, 1.2 billion people are still living in extreme poverty. In Sub-Saharan Africa, almost half of the population live on less than $1.25 a day. Sub-Saharan Africa is the only region in the world that saw the number of people living in extreme poverty rise steadily, from 290 million in 1990 to 414 million in 2010, accounting for more than a third of people worldwide who are destitute. They (Sub-Saharan Africa) now account for more than a third of the world’s extreme poor. India contributes another third and China comes next contributing 13 percent.
To combate the poverty in this places, the financing has to be met with simultaneous advances through community initiative, building from resources of solidarity and local growth within existing cultural and government structures, adding that One of the biggest obstacles nowadays is the lack of data collection in small countries and territories in fragile conditions,the need to improve household survey programs to monitor poverty in these countries is urgent.
Another way to combater the poverty in these places is the creation of employment. The MGF is trying to produce decent work for all including women and young people and introduce efficient public services, social protection and promoting the participation in the jobs. The huge countries are economically developed have more successful because they have more economy to get more jobs and this way his poverty rate are lower than small countries. So, there is a need for interdependence and mutual help between these countries. In order to achieve decent work, there are lots of programs that have been a success and extremely important, in regions such as Brazil/India/China due to its economic development. However, other programs have some lacunas and are not well-implemented. So, there is a long path that must be followed to achieve full employment and decent work for all.
With regard to the issue of global hunger, tremendous progress is evident in the statistics, particularly when examined in comparison to the statistics from a short twenty years ago. However, it is necessary to seek the truth beyond percentages and understand that these statistics represent people who are lacking the ability to obtain proper nutrients for the body to work correctly. 842,000,000 of our kind need assistance, and that assistance will come from the developed countries in order to break the so-called "hunger trap". There have been significant steps taken by organizations like UKAID and WFP to assist the hungry people through direct and indirect intervention. Money transfer and relationships with local food producers are merely two examples of the ways that the world hunger eradication is being approached. It is clear, however, that a bit more attention could be given to this massive problem.

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Annexes

1. The Evolution of Extreme Poverty Rates by Region

2. Number of Poor by Region (million)

3. Regional shares of the world’s extreme poor population

4. Average per capita Income of the Extreme Poor

5.

6. World, India and China GDP per person employed (constant 1990 PPP $) (Source: World Bank)

7. GDP per person employed is gross domestic product (GDP) divided by total employment in the economy. Purchasing power parity (PPP) GDP is GDP converted to 1990 constant international dollars using PPP rates. An international dollar has the same purchasing power over GDP that a U.S. dollar has in the United States. (Source: World Bank)

8.

9.

10.

11.
12.

14.

Source: http://www.thegedi.org/research/womens-entrepreneurship-index
15.

Source: http://www.un.org/millenniumgoals/pdf/report-2013/mdg-report-2013-english.pdf P.8.
16.

Description: Number of families that benefit from this program, by each Brazilian State.
Source: http://blog.planalto.gov.br/dobradinha-pac-bolsa-familia-em-belo-horizonte-2/

17.

Source: http://mdgs.un.org/unsd/mdg/Resources/Static/Products/Progress2012/English2012.pdf P. 10.