Four Reasons to Question the Official 'Poverty Eradication' Story of 2015

The United Nations, large NGOs and lots of big corporations are gearing up to tell the world that we can eradicate global poverty by 2030. As a new paper by the economist David Woodward confirms, however, this claim is so far from reality that it deserves the label of cynical hype.

The UN is currently coordinating a grand manoeuver of immense complexity. In order to agree to a new generation of global development outcomes called the Sustainable Development Goals, they are conducting a dizzying array of meetings with everyone from governments to NGOs to multi-national corporations like KPMG and Microsoft. The public isn't very aware of all this yet even though its been going on for almost two years, but it will most likely break into the mainstream news agenda sometime in the late summer, just before a meeting of Heads of State in New York in September when the formal agreement will be signed.

As part of the build up to this, most of the players have agreed on a set of talking points in an effort to engage the public. At the heart of these are two ideas: that poverty has been halved in the last 15 years, and that we can eradicate it by 2030. It's a wonderful, hopeful sentiment that no-one could possibly be against, right?

Unfortunately, even a cursory understanding of the data shows it is little more than hype, designed to rally public support behind a 'business as usual' political agenda that wants to distract attention from the structures and conditions in our global political economy that cause mass poverty in the first place.

Here are four critical flaws at the heart of this story.

1. The meaning of "poverty eradication"

Poverty, in this context, is measured by how much money you have to live on every day. But it doesn't mean what most might assume, i.e. having so little income that you are unable to afford enough for the most basic levels of health and wellbeing. The poverty being talked about here is the World Bank definition of living on less than $1.25 a day. About 1.2 billion people struggle in those conditions today. A more common sense definition would be a level of income sufficient for for basic health, nutrition and wellbeing; and Woodward's paper (in common with a recent Policy Brief by the UN body UNCTAD) uses the number of people living on less than $5 a day to illustrate the implications of such a poverty line.* If you do that, then right now there are 4.3 billion people unable to achieve basic health and wellbeing. So already, the idea that we're actually talking about what the average person might understand to be poverty eradication - that is, the very people the UN & co. are trying to speak to - looks decidedly shaky. They are, in fact, using a discredited poverty line to make their story seem more plausible.

2. The Growth Effect

But let's put that aside for a moment and go with the official figure. In order to achieve eradication of even $1.25-a-day poverty by 2030, a few things will need to happen. Because we live in a neoliberal, "trickle-down economics" world, for those with the least to make a little more, those with the most must make a whole lot more. The figures on this are staggering. Even taking pre-2008 growth patterns (i.e. before the global financial crisis), the poorest only ever get crumbs from the feast. Since 1981, 95% of all growth has gone to the top 40%, leaving the remaining 60% to divide 5% between them. Within that 60%, and in keeping with general truths of this political economy, the poorer you are, the less you have access to. Over that same period, people in the poorest 10% have seen a full 2% less growth in their incomes every year than those in the middle. And don't forget, people in both the poorest and the middle deciles are all sharing the 5% crumbs.

"The reason for pointing all this out is not to pour scorn over good intentions, but to call for integrity and honesty as a first principle in any process of change."Look across all income brackets and you realize that with our current system, for the $1.25-a-day poorest to get above that level, the average global income would need to be triple what it is right now in rich countries. In other words, the average income across the globe, which includes some of the poorest countries like Afghanistan and Liberia, would all need to reach the average levels in the US today, and then triple. All by 2030. Such miracles have never been seen in all of human history. In fact, Woodward has calculated that, even with pre-2008 growth levels, this would take about a century, not fifteen years. And if you use the more accurate $5 a day target, we're looking at two centuries.

3. The Food Effect

Well, at least even the poorest have managed some growth in income in the last few decades, that's positive. That shows that things are heading in basically the right direction, even if progress is slower than we might like. Right?

Wrong. Because income only matters in terms of what it can buy. Those of us who are very poor have to spend most of their money on basics, like food and shelter. So what you care about isn't rises in income so much as what that income can buy. Since 2008, overall food prices have risen 43% across the developing world. Bad enough. But it gets worse, because if you break food down into different types, you will see that cereal prices have actually risen by 92%, and cereals like maize and wheat are all that most poor people can afford to eat. When you have to spend upwards of 80 cents in every $1 on food, and the cost of your food almost doubles, a few percent increase in your income over the course of a decade is worse than meaningless.

4. The Carbon Effect

If there is one absolute killer flaw in the official story, that takes this 'eradicate poverty by 2030' claim from spurious to dangerous, it is this. To go back to the point about average incomes above: for the average income to triple, using today's economic patterns and model, global GDP will need to increase 15 times. Put another way, the global economy will need to be 15 times bigger by 2030 than it was in 2010, and growth means more greenhouse gas emissions.

To put that in context, in the last 30 years - i.e. double the time that it would need to grow by 15 times - the global economy grew a 'mere' 6-fold. In order to power that growth, greenhouse gas emissions grew by 42%. So, if 6 fold growth = 42% more greenhouse gas emissions each year by the end of the period, then you don't need a degree in math, or even to do the math, to get a clear sense of what a 15-fold growth would deliver. In other words, it would mean destroying our planetary climate and making human civilization incompatible with ecological reality.

You could say that there are very positive moves towards greener energy, and that's both true and to be celebrated, but when seen in full global context, they, so far, cannot even stop emissions growing year on year, let alone reduce overall levels of carbon. They are politically powerful, practically wonderful at the local and even regional scale, and they should be supported wholeheartedly, but they are not yet anywhere near scalable to the point that we should rely on them to allow us to base our future on this sort of exponential material growth. Especially in world where oil industry leaders are happily predicting that, "Despite the growing emphasis on renewables, we still foresee 80% of energy coming from fossil fuels in 2030." To get to the point where we could be confident that renewables can save our hides, we would need a global action plan like none we can even dream of right now, and will never be able to as long as this sort of 'support massive industrial growth because it can eradicate poverty' story is accepted.

The reason for pointing all this out is not to pour scorn over good intentions, but to call for integrity and honesty as a first principle in any process of change. To say, hope is precious, it should be handled with humility and respect; it should not be used lightly or exploited for marketing purposes if there is no substance to it. When we see it being used in this sort of cynical way, we should call foul.

These particular 'eradicate poverty' claims mask a very particular ideological intent, namely to validate the idea that we just need more of the same basic economic model. In terms of global development, this means more GDP-defined industrial growth; more, if hopefully greener consumption and production; more "trickle down" neoliberal economics; more private (i.e. corporate) influence in politics and governance; more foreign aid-based development. Which is another way of saying, we don't need to consider the fundamentals of the global economy. We don't need to talk about the corrupting influence of money in politics, or how we define growth, or the profoundly extractive nature of the economy, or the immense public power of private corporations, or overall levels of production and consumption. None of these are currently on the table in the discussion on the SDGs. If we want to make room for those sorts of whole-system conversations, we first need to reject the fig leaves that keep the old, incremental change ones in place.

*Correction: This section was updated from a previous version to more accurately reflect UNCTAD's position on its poverty numbers. UNCTAD makes no determination this is an appropriate line, but has explored the idea for illustrative purposes in a Policy Brief.