Poverty is a political choice
A UN Rapporteur has just delivered a withering critique of the international system.
The United Nations Rapporteur on Extreme Poverty and Human Rights, Philip Alston, has just released his final report, a withering critique of international efforts to eliminate poverty which he describes as the result of “longstanding neglect” by “many governments, economists, and human rights advocates.”
Central to his report are the institutional failings of the World Bank in getting to grips with the scale of global poverty, which it persistently underplays using the flawed measurement tool of an international poverty line, or IPL. The IPL, argues Alston, sets the poverty benchmark at way too low a level to support a life of dignity consistent with basic human rights.
Based on an average of national poverty lines adopted by some of the world’s poorest countries and calculated using ‘purchasing power parity’ (or PPP), the poverty line is ridiculously low, amounting, for example, to just $1.90 a day in the United States and €1.41 in Portugal. But even using this “staggeringly low standard of living” as a barometer of poverty, the report identifies 700 million people living under $1.90 a day.
Criticising a “deceptively positive picture” that has underpinned a “decade of misplaced triumphalism,” Alston proposes abandoning the IPL for “a broad dashboard of multidimensional indicators” that offer a more nuanced and accurate picture of poverty nationally and internationally.
The report accepts that “huge progress has been made in improving the lives of billions over the past two centuries,” but questions the World Bank’s banner headline that extreme poverty dropped from 1.895 billion people in 1990 to 736 billion in 2015. These figures mask the exceptional performance of China, which lifted more than 750 million above the Bank’s poverty line in that period.
What distinguishes China from most other countries in the global South, argues the economist Jason Hickel, is that it was not subjected to the ‘shock therapy’ of the World Bank and IMF’s structural adjustment programmes (SAP). SAPs were neoliberal ‘reforms’ often attached as conditions to IMF loans to poor countries, including removing tariffs on imports, prioritising production for export, privatising services and utilities, and removing price controls. “Instead of being forced to adopt a one-size-fits-all blueprint for free market capitalism,” suggests Hickel, “China relied on state-led development policies and gradually liberalised its economy on its own terms.”
The sustainability of China’s impressive economic performance has been questioned because it’s been driven by a low wage economy and a resource-intensive manufacturing sector which has made it the world’s largest emitter of greenhouse gases. China’s income inequality remains relatively high with 373 million Chinese living below the upper-middle-income poverty line of US$5.50 a day. This is not a rights-based alternative to the IMF’s SAPs, but nonetheless China’s approach has lifted hundreds of millions of people out of poverty.
In fact, Alston argues that without China’s “outsized contribution,” to development, the global poverty headcount would “barely have changed,” thereby questioning the “celebratory accounts” of achievements by the World Bank and others. Hickel, too, suggests that “it is disingenuous…to build an inequality-reduction narrative that rests on gains from China and chalk it up as a win for Washington’s approach to free-market globalisation.” He argues that SAPs were designed to stimulate growth and facilitate debt repayments, but instead have weakened the hand of the state in terms of economic oversight and deepened the debt burden of poor countries.
Today, 64 countries in the global South spend more on debt repayments than on healthcare, something which has weakened their capacity to fight the coronavirus pandemic. This problem is compounded by the fact that the Sustainable Development Goals (SDGs) - a UN initiative launched with great fanfare in 2015 to “end poverty in all its forms everywhere” - are also sending out signals of distress.
The SDGs: “colourful posters and bland reports.”
The Special Rapporteur’s report says of the SDGs that “The UN and its member states are sleepwalking towards failure...Five years after their adoption, it is time to acknowledge that the SDGs are simply not going to be met.”
Alston questions how Goal 8 (which calls for an increase of GDP in low income countries of seven per cent by 2030) is commensurate with Goal 13, which calls for “urgent action to combat climate change and its impacts.” In short, the Goals appear to be complicit with the same neoliberal growth agenda which has precipitated the existential crisis of climate change, and which undermines the IPCC target of limiting global warming to 1.5°C of the pre-industrial average.
Other criticisms levelled at the Goals include their dependence on private sector funding and philanthropy to achieve their targets - rather than actively pursuing a structural realignment of the global economy toward equitable taxation and redistribution - and the fact that the SDGs, like the Millennium Development Goals before them, use the International Poverty Line as a barometer. This means that even if their targets are met, billions of people will still face serious deprivation. This narrow interpretation of poverty, the report argues, fails to frame poverty eradication in the context of fundamental human rights which are “often invisible in the overall SDG context.”
As if to endorse the Special Rapporteur’s findings, UN Secretary-General António Guterres has admitted that progress toward the Sustainable Development Goals is “seriously off-track.” According to Alston’s report, the underlying problem is that “economic growth is at the core of the SDGs, the engine relied upon to lift people out of poverty,” and prioritizing “an enabling business environment over empowering people.”
He stops short of calling for the Goals to be abandoned, but believes they need to be recalibrated and revitalised, with more stringent mechanisms introduced for monitoring and evaluation. In a scathing assessment, Alston concludes that:
“Instead of promoting empowerment, funding, partnerships, and accountability, too much of the energy surrounding the SDG process has gone into generating portals, dashboards, stakeholder engagement plans, bland reports, and colorful posters. Official assessments are rarely critical or focused, and they often hide behind jargon.”
But do those responsible for the Goals have the agility, flexibility and resolve to change their methodology mid-stream, especially when so many of their multilateral partners and sponsors are wedded to the high-growth imperative that underpins mainstream conceptions of ‘development’? Even more challenging, can they do it in the midst of a health pandemic and a climate emergency?
The Special Rapporteur’s report draws on findings from the World Bank that suggest that COVID-19 will push 176 million people into poverty at a higher poverty line of $3.20, and yet “many governments have seen COVID-19 as a passing challenge to be endured.”
With the IMF predicting the worst economic recession since the Great Depression and a cumulative loss to global GDP of $9 trillion, there’s an understandable concern among workers in low-paid occupations that their livelihoods are under threat. These fears seem well-founded given that 20 million workers lost their jobs in the US in April and unemployment rocketed to nearly 15 per cent.
For those on the frontlines of the pandemic - essential workers, many of whom are poorly remunerated and in precarious occupations - the concern is that governments will double-down on neoliberal responses to COVID-19 as they did to great criticism in the decade following the 2008 financial crisis by implementing further austerity measures, wage freezes, public service cuts and redundancies. This is likely to deepen the racial and class divides that have already been exposed by the pandemic, while ignoring the “indispensability of large-scale economic and social restructuring” as Alston puts it.
Oxfam reported that in 2019, 2,153 people owned more wealth between them than 4.6 billion people. They also calculated the annual monetary value of unpaid care work carried out globally by women aged 15 and over to be $10.8 trillion. According to neoliberalism’s metric of choice - Gross Domestic Product - this work holds no value, yet it is priceless to the sick, disabled and elderly who are dependent on support. These contrasting statistics are a reflection of what Oxfam describes as a “flawed and sexist economic system” in which “economic equality is out of control.”
Alston argues that any poverty elimination strategy needs to bring equitable taxation and redistribution front and centre as a “symbol of solidarity and burden-sharing,” and the proposals in his report would make for a progressive development manifesto. They include the closure of tax havens and forcing transnational corporations to pay their way; dropping the International Poverty Line and adopting a rights-based measurement of poverty in its place; removing the crippling debt burden from poor countries; reducing dependence on private resources for financing public development goals; and acknowledging the “deep deficit of political motivation” underlying the malaise of the SDGs.
“Poverty is a political choice,” he says, and eliminating it requires that social justice and human rights are central to the ways in which we implement and measure human development. His report is both a damming indictment of current development policy and practice and an appeal for cogent and urgent action.
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