A/HRC/44/40
upon which they rely? How can we reconcile them with so many other indicators that paint
a far more troubling picture? Is the “huge achievement” as meaningful as touted? Can it
withstand the onslaught of COVID-19 and climate change as well as the effects of extreme
inequality, and if not, what does that tell us about how precarious progress has been? And
how does the progress made compare to what could have been achieved with the immense
wealth available?
Misplaced reliance on the World Bank’s international poverty line
A.
7.
Almost all of these celebratory accounts rely one way or another on the World Bank’s
international poverty line (IPL), under which the number in extreme poverty fell from 1.895
billion in 1990 to 736 million in 2015, and thus from about 36 to 10 percent of the world’s
population.8 The United Nations has ensured the IPL’s status as the dominant benchmark by
enshrining it as the main reference point in both the Millennium Development Goals and the
SDGs. In addition, the Bank’s financial and intellectual clout ensure that almost all of the
most glowing accounts of progress use its IPL statistics.
8.
Certainly, the line is a highly admirable initiative that has likely done more to raise
awareness and foster collective intent than any other single effort. However, the picture it
provides is far from complete and it is important to recognize its principal limitations.9 Many
of these have been acknowledged by Bank officials, by a Bank-appointed expert group, and
even by the economist responsible for developing the modern IPL. Yet the limitations
nonetheless represent a strong indictment of the single-minded focus on this particular line
and its use by many commentators—and the Bank—to underpin a misleading picture of
progress against poverty.
9.
What exactly is the IPL? The current line is derived from an average of national
poverty lines adopted by some of the world’s poorest countries, mostly in Sub-Saharan
Africa.10 Unlike many national lines, it is not based on any direct assessment of the cost of
essential needs. It is an absolute line, constant in value, calculated and expressed using
purchasing power parity (PPP) dollars, which are designed to adjust for the costs of goods in
different countries in a way that market exchange rates do not (notwithstanding the many
challenges to the validity of the PPPs). According to the Bank, the line is a globally relevant
yardstick that allows for the achievement of the same meager needs in every country.
10.
The current line of US$1.90 2011 PPP per day11 represents what that amount could
buy in the United States in 2011. Expressed in local currencies for the most recent years
available, the line translates to living on 7.49 yuan per day in China, 1.41 euros in Portugal,
22.49 pesos in Mexico, 50.83 rubles in Russia, 355.18 naira in Nigeria, 910.15 pesos in Chile,
or 36.27 rupees in India.12 The IPL is of course well below the national poverty lines of most
countries, and accordingly generates dramatically lower numbers in poverty. For example,
using the most recent comparisons available, Thailand has a poverty rate of 0.0 percent under
the IPL but 9.9 percent under the national line,13 the United States, 1.2 percent versus 12.7
8
9
10
11
12
13
4
World Bank, Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle (2018), p. 2.
Issues outside the scope of this report include critiques of the purchasing power parity rates, the
methods of deriving previous IPLs and the consequences of shifting methodologies, and the problem
of uni-dimensional money-metric approaches. Scholars including Sabina Alkire, Angus Deaton, and
Sanjay Reddy have shed immense light on these problems.
Francisco Ferreira, et al., “A Global Count of the Extreme Poor in 2012,” World Bank, 3 October
2015, pp. 39, 46.
Except where noted, poverty lines are expressed in 2011 PPP dollars.
Local currency conversions provided by the World Bank via email March 25, 2020. The conversion
years are: 2018, Russian Rubles, Mexican Pesos, Nigerian Naira, Thai Baht; 2017, Euros in Portugal,
Chilean Pesos; 2016, Chinese yuan; and 2014, South African Rand, Indian Rupee.
2018 figures. World Bank, “Poverty & Equity Brief: Thailand,” April 2020.
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