The United Nations Development Programme and the Oxford Poverty and Human Development Initiative have recently unveiled the Global Multidimensional Poverty Index for 2023. This index gathers data from a whopping 110 developing countries, comprising a total of 6.1 billion people – a figure that represents an astounding 92 percent of the world’s population.
A startling conclusion is that, despite accounting for a lower share of the global population, Sub-Saharan Africa is home to 534 million of the world’s 1.1 billion impoverished – a staggering 50 percent of the overall poverty-stricken population. South Asia is another area of significant concern, as it is home to more than one-third of the world’s impoverished or 389 million people.
Despite the depressing numbers, there is a ray of optimism. An amazing group of 25 countries has successfully cut their global Multidimensional Poverty Index scores in half, accomplishing this tremendous feat in just 15 years.
In a monumental shift, India has witnessed an unparalleled exodus from poverty. Over the course of a mere fourteen years (2005/2006 – 2019/2021), a staggering 415 million individuals have broken the chains of poverty, an achievement of a scale rarely observed. The poverty incidence has plummeted dramatically from a bleak 55.1 percent to a considerably lower 16.4 percent. A nation once riddled with deprivation in every conceivable measure is now reporting a pervasive decline in deprivation across all indicators.
More heartening is the progress observed in the nation’s most vulnerable groups – children and those belonging to disadvantaged castes. These groups, often mired in the deepest throes of poverty, have reported the fastest absolute progress, thereby debunking the notion that they are inextricably trapped in an unending cycle of poverty. The poorest states, once seen as the stubborn bastions of poverty, have experienced a remarkable turnaround, further underscoring India’s nationwide transformation.
Nonetheless, we’d want to discuss some of the methodological concerns with the Multidimensional Poverty Index. The Multidimensional Poverty Index methodology provides a holistic approach to evaluating poverty by examining deprivations in three critical dimensions: health, education, and standard of life. While the vast coverage and equal weighting within each category provide a comprehensive perspective, there are several potential flaws.
Firstly, the binary deprivation determination (deprived or not deprived) may oversimplify the nuanced reality of poverty, masking variations in the severity of the deprivation.
Secondly, the equal weighting of indicators within dimensions assumes all factors are of equal importance to individuals, which may not align with the realities in different contexts or cultures. Furthermore, the arbitrary threshold for identifying an individual as multidimensionally poor (a deprivation score of 1/3 or higher) could result in overlooking individuals or households that might be suffering from significant, though not comprehensive, deprivation.
Finally, the reliance on available data for these indicators may bias results towards areas where such data is easily accessible and reliable, thereby potentially under-representing regions with less reliable data infrastructure. Therefore, while the MPI is undoubtedly a significant step forward in poverty measurement, the methodology could benefit from a more nuanced approach to deprivation scoring, differential weighting based on context, and the use of a sliding scale of poverty, along with efforts to improve data reliability globally.
Regardless, South Asia has to invest more in reducing poverty. The complexity of the poverty issue in South Asia calls for a comprehensive, multi-dimensional strategy. Informed by key insights from various scholarly studies and expert recommendations, here’s a robust plan that South Asia could embrace:
Cultivate Broad-Based Economic Growth: The eradication of poverty hinges on promoting inclusive growth and expediting human development. Inclusive growth is about ensuring the fruits of economic progress are equitably distributed across all strata of society, particularly reaching out to the marginalized and the rural poor.
Refine Social Policies and Poverty Metrics: It’s imperative to broaden our understanding and measurement of poverty, beyond merely income parameters, to encompass elements such as health and education. This multi-dimensional perspective on poverty can guide the formulation of more impactful social policies.
Tackle Rural Poverty Head-On: Considering the extensive presence of poverty in South Asia’s rural areas, targeted strategies may be essential, such as improving access to fundamental services, bolstering agricultural productivity, and creating income-generating opportunities. While there’s no universally effective model, identifying and extending successful strategies can create powerful ripples of change.
Mitigate the COVID-19 Impact: The pandemic has imperiled the hard-earned gains in poverty reduction, with the risk of pushing millions back into poverty. Robust strategies must be devised to neutralize the impact of the pandemic and safeguard the trajectory of poverty reduction.
Finally, the value of regional collaboration and mutual learning cannot be overstated. For example, India’s impressive stride in pulling 415 million people out of poverty over 15 years serves as an inspiring model for other South Asian nations. The efficacious implementation of these strategies could propel South Asia forward on the path to eradicating poverty.
As we look to the future, it is clear that the path to real emancipation lies in freeing our global community from the shackles of poverty. And yet, poverty is not merely an economic condition—it is an affront to human dignity, a stumbling block in our collective journey towards progress and prosperity. The stark realities and sobering numbers of MPI should not just be seen as an academic exercise. Rather, they should serve as an urgent call to action for all nations, especially those in South Asia, to invest more robustly in strategic, multi-dimensional poverty reduction. This commitment should involve governments, policymakers, and every facet of society.
Bibek Debroy is Chairman, of the Economic Advisory Council to the Prime Minister of India (EAC-PM) & Aditya Sinha is Additional Private Secretary (Policy & Research), EAC-PM.