On Being Poor in the Third World: What does $1.25 or $1.90 Per day Mean?

02.22.17
Zoriah Miller
World News /22 Feb 2017
02.22.17

On Being Poor in the Third World: What does $1.25 or $1.90 Per day Mean?

In 2008 the World Bank raised its Global Poverty Line from $1.00 to $1.25 per day, then raised it again to $1.90 in 2015, taking inflation and other factors into account. Using these figures there are now some 700 million people living in extreme poverty, down from one billion. Do these thresholds tell us anything meaningful? They do not; worse they work against our understanding of poverty.

First, it should be obvious that even if poverty (at $1.90) is declining, this is a very low bar, and rising above it (going from $1.90 to $2.30 or $3.15) still leaves you poor. Thinking about the difference between extreme poverty, or dire poverty, or just plain poverty is something only rich people can afford to do; ask someone who has moved from a dollar to a dollar and a half (a spectacular 50% jump) and we might find that person feeling no different than before, or even poorer.

Second, these data suggest that we are moving inevitably to the end of poverty. But this may not be so. If for example, the world reaches a projected 9 billion total population in 33 years (2050), 88% of those people (7.9 billion) are projected to live in the developing world. To be sure that world contains a mix of countries, some of which are doing better, but many are not. In 1971 the United Nations created a list of Least Developed Countries (LDCs). Today there are forty-eight countries on that list, and half of those were on it when it began 43 years ago. Of course we might see some positive surprises over the next three decades, but it is equally possible that we’ll see continued stagnation and even greater disparities between the first and third worlds.

Third, the comfort of seeing worldwide poverty decrease (based on a very low threshold) tends to give us the illusion that we understand poverty and what to do about it. In fact it remains a somewhat mysterious and increasingly complex phenomenon.

In 1981 84% of China’s population lived below the $1.25 poverty line. Only 4 countries did worse: Cambodia, Burkina Faso, Mali and Uganda. By 2005 China’s below $1.25 population had dropped to 16%, a huge decrease of 81%, while Mali’s below-$1.25- population had gone the other way, from 40% to over 50%. Burkina Faso’s on the other hand had dropped by 20% and Uganda between 1989 and 2009 went from about 69% below the $1.25 line to 38%.

How do we explain such changes and disparities? Is it topography, natural resource endowments, the political system, historical legacies, social structure, culture? We have inklings and theories, but we don’t really know.

In 1963 Harvard economist Robert L. Heilbroner wrote a slim book called The Great Ascent – The Struggle for Economic Development in our Time.

In it he asks the reader to understand the life of poor people in the underdeveloped world by imagining a middle class suburban American family, from which he starts taking things away:

“Everything goes: beds, chairs, tables, television set, lamps. We will leave the family with a few old blankets, a kitchen table, a wooden chair. Along with the bureaus go the clothes. Each member of the family may keep in his wardrobe his oldest suit or dress, a shirt or blouse. We will permit a pair of shoes to the head of the family, but none for the wife or children.

We move into the kitchen. The appliances have already been taken out, so we turn to the cupboards and larder. The box of matches may stay, a small bag of flour, some sugar and salt. A few moldy potatoes, already in the garbage can, must be hastily rescued, for they will provide much of tonight’s meal. We will leave a handful of onions, a dish of dried beans. All the rest we take away: the meat, the fresh vegetables, the canned goods, the crackers, the candy. Now we have stripped the house: the bathroom has been dismantled, the running water shutoff, electric wires taking out. Next we take away the house. The family can move to the toolshed.”

As pointed as this exercise is, it defines poverty as a condition based on things. And of course having and not having things is important. But if we think beyond things, we enter several different realms that complicate our understanding of poverty.

Poverty is also a matter of position, where one is in a society and where one is on the map, and while for some position is a strait-jacket, others may find they can move out of it. If you are a lower-caste, dark-skinned woman in rural India, you are poor because of caste, gender, color, and where you live (most of the world’s poor, by the way, live in the zone between 20 degrees north of the equator and 20 degrees south of it.) If you are a young man in rural Senegal you are poor in part because of a lack of access to education, financial services, jobs, etc. But if you move to Dakar and live in a slum, you are still poor but you have some chance of making money in day labor, or selling goods on the side of the street, and moving up, at least for a while. For poverty in urban areas can be dynamic – one can move up quickly, only to go down again. Slums serve a purpose in this oscillation; they can be a way station on the way down, as well as the first step on the way up for those who come in from the countryside.

Poverty is also experienced relatively – if everyone is poor, then in a way no one is. If you are a mid 20th century North African nomad moving your livestock seasonally and living in a tent and everyone you know lives like you do and someone asks if you are poor, you might not understand the question.

Likewise it may be folly to try to establish common characteristics of poverty.

Anthropologist Oscar Lewis in the 1950s and 1960s did research in Mexico and in books like La Vida and Five Families talked about the “culture of poverty” and noted these characteristics:

• Low participation in national life- voting, cinema, travel, infrastructure, – even in cities, they are on the margins
• Persistent attachment to primitive religious concepts; superstitions
• Violence
• Sexual violence
• Multiple partners
• Frequent moves
• Early childbearing
• Poor nutrition
• Alcohol
• Gambling, luck games, lottery, etc.

This view suggests that Lewis’s poor are part of an “underclass,” with the implication of oppression and the structures that contribute to it. But these characteristics are not necessarily found among the poor in India, or China or Bolivia. And how do they apply to the nomad in a tent who has few “things,” nor access to education, financial services, jobs etc.? He may be on the margins of national life, bear children early, be superstitious, but not prone to sexual violence or alcohol or gambling, and probably does not think he is poor.

Clearly there are differences in how people experience their lot. A world where everyone is more or less in the same boat, but all are materially deprived, and where life is precarious, and is lived “on the margins,” is clearly different from the kind of chronic poverty Lewis describes. Lewis’ poor person might feel envy, resentment, or anger. The nomad, just as deprived, might have none of these feelings, nor might the lower caste Indian woman.

Then there is the revolution of rising expectations – you are poor if you think you are worse off than others and don’t like it. Heilbroner pointed in this direction in his 1963 book: “For the underlying masses, development is apt to be a time of awakening hostilities, of newly felt frustrations, of growing impatience and dissatisfaction.”

The evidence of these feelings and their power, has been seen ever since. Indeed poverty seems to be becoming a more complex phenomenon. Just two developments that began in the middle of the last century offer insights into that complexity; the growing ease of transportation and of communication. Sixty or seventy years ago in much of the third world radio had just arrived and people began to become aware of a wider world. Then came telephone and TV, tales told by returning overseas workers, and now cell phones. By now everyone has “seen Paree,” and if you are young, and male, being satisfied with your condition, or your position, is less likely than ever. More and more people are on the move, voting with their feet against poverty. They try to leave their villages in Ethiopia or the Philippines or Mexico.

The numbers are telling. In 2015, there were 244 million international migrants – people living or working in countries not their own. That is the equivalent of the entire population of the U.S. in 1990, or 75% of the current U.S. population. This movement of people has grown 60% in the last quarter century. And that movement is not just from the Global South to the Global North, but is increasingly a south-to-south movement (e.g. Myanmar to Thailand).

Remittance transfers, the money sent “home” by people working in countries not their own, have also grown at a steady pace, relatively unaffected by financial crisis or recession, to the point where they now represent at least four times the world total of official development assistance (ODA), or roughly $600 billion annually and growing.

It would seem poverty is a moving target, perhaps more so than we like to think.

We can talk in dry economistic terms like low ownership of productive assets, low access to services like water, sanitation facilities or electricity, or morbidity rates. We can invoke social science and talk about support networks or social capital as mitigating elements in poor people’s lives, and so on. We can ask a poor person in rural Malawi what poverty means to her and she might say lack of luck, or the irregularity of her cash flow, thus when illness comes, or rain damages her roof, she is caught having to scramble to pay a money lender usurious interest rates. At the same time if we ask a middle class American if he is poor, when he owns a 60 inch flat screen TV, two cars, an I-phone, etc. along with rolling credit card debt of $20,000, he is likely to say no.

Not only do we lack a broad consensus on the causes of poverty (and with that, what to do about it), we are still unsure what poverty actually looks like, or from whose point of view one ought to look at it. Poverty is a moving target, it is not just about money, or crossing a threshold, or about one’s position in society, or about whether you feel more or less poor. And like the world as a whole, the complexity of poverty is growing. Simple poverty measurements like $1.25 or $1.90 not only tell us little, they can fool us into thinking we know what we are doing when it comes to efforts to do something about it. But the truth is we know less than we think and a humble acknowledgement of that may give us reason to attend to the subject more fully and deeply, not just to its causes, but its dynamics in different contexts, as well as how people’s own definitions of poverty keep changing.

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