The big issue for the MDG summit, the ‘big push’ to 2015 and even the post-2015 debates (there’s a newly agreed UN summit due in Sept 2013) should really be a focus on equity and on the poorest. Why? Because nearly three-quarters of the world’s poor now live in middle-income countries. The MDGs have focused donors in particular on the poor over the last decade. But what if the poor have ‘moved’?
Popular understandings of global poverty are based on a false premise, that poor people all live in poor countries. In fact, when we did the number crunching we found a new bottom billion poor people – but not in fragile and conflict-affected states and not in low income countries.
This new IDS research shows that most poor people no longer live in the poorest countries. Poor people have not been moving, obviously. Instead, a host of countries have recently graduated to ‘middle income’ status, but poor people within them have been left behind. In 1990, nine in ten of the world’s poor people lived in poor countries. In 2007-8, we estimate that three-quarters of the world’s 1.3 billion poor people now live in middle-income countries such as India, China, Nigeria, Pakistan and Indonesia, and a quarter live in low-income countries, largely in Africa.
This means there is a new ‘bottom billion’ and they don’t live in the world’s poorest countries. What does this startling change mean for the future of the MDGs, aid and global strategies for poverty reduction?
If development is about poverty reduction, where poor people live is a crucial question. It is important to note just five countries (China, India, Pakistan, Indonesia, Nigeria) account for much of the total number of poor that have ‘moved’ to MIC countries. However, this is not just about India and China; the percentage of global poverty accounted for by the middle-income countries (MICs) minus China and India has tripled as a proportion of the global total. Further, this isn’t just about the income poverty MDG. A further surprising finding is the picture holds across nutrition MDG measures (height and weight) and the UNDP’s new multi-dimensional poverty index. Where there is a nuance is if we look at the primary schooling MDG and – possibly infant mortality MDG – then maybe 40% of the poor are still in low-income countries (LICs).
This evolving new narrative thus may be one of different poverties in different countries. Why has it taken so long to realize we were getting it wrong? Good data runs 2-3 years late at least, and the numbers reflect a long-running pattern that became particularly visible over last year or so, as a number of countries reached middle-income status.
So, what? One read of the data is that poverty is increasingly turning from an international to a national distribution problem, and that governance and domestic taxation and redistribution policies become of more importance than overseas development assistance.
So, should aid stop to ‘poor countries’ like most of Africa? No – LICs and Africa need aid more than ever before, due to the post-crisis impact on public revenues and spending.
Can’t middle income countries just support their own poor? Yes and no. Some can. Not all yet. Some are only just MICs and withdrawing aid suddenly might mean they slip back to LICs. In some MICs, domestic resources are substantial. In others where they have only just passed the threshold, it would be terrible to withdraw aid suddenly and thus push back countries that are on a sustained growth path.
I’m curious what others reading this blog think about this changing picture of global poverty – does it matters as much as I think it does? If so, what needs to be done?