mediafilter on Tue, 12 Jan 1999 01:22:00 +0100 (CET) |
[Date Prev] [Date Next] [Thread Prev] [Thread Next] [Date Index] [Thread Index]
<nettime> Global Falsehoods |
>X-Sender: chossudovsky@pop3.sprint.ca >Date: Sun, 10 Jan 1999 19:55:49 -0500 >From: Michel Chossudovsky <chossudovsky@sprint.ca> >Subject: Global Falsehoods >Mime-Version: 1.0 > >GLOBAL FALSEHOODS: HOW THE WORLD BANK AND >THE UNDP DISTORT THE FIGURES ON GLOBAL POVERTY > > by > > Michel Chossudovsky > >Professor of Economics, University of Ottawa, author of The Globalisation >of Poverty, Impacts of IMF and World Bank Reforms, Zed Books, London, 1997. > >C copyright by Michel Chossudovsky, Ottawa, 1999. To publish this text >contact the author at chossudovsky@sprint.ca > > >Until the 1998 financial meltdown ("black September" 1998), the World >economy was said to be booming under the impetus of the "free market" reforms. > >Without debate or discussion, so-called "sound macro-economic policies" >(meaning the gamut of budgetary austerity, deregulation, downsizing and >privatisation) continue to be heralded as the key to economic success and >poverty alleviation. In turn, both the World Bank and the United Nations >Development Programme (UNDP) have asserted authoritatively that economic >growth in the late 20th Century has contributed to a reduction in the >levels of World poverty. >According to the UNDP, "the progress in reducing poverty over the 20th >century is remarkable and unprecedented... The key indicators of human >development have advanced strongly. "1 > >The Devastating Impacts of Macro-economic Reform are casually denied > >The increasing levels of global poverty resulting from macro-economic >reform are casually denied by G7 governments and international institutions >(including the World Bank and the IMF); social realities are concealed, >official statistics are manipulated, economic concepts are turned upside down. > >The World Bank Methodology: Defining Poverty at a "Dollar a Day" > >The World Bank framework deliberately departs from all established concepts >and procedures (eg. by the US Bureau of Census or the United Nations) for >measuring poverty.2 It consists in arbitrarily setting a "poverty >threshold" at one dollar a day per capita. It then proceeds (without even >measuring) to deciding that population groups with a per capita income >"above one dollar a day" are "non-poor". > >The World Bank "methodology" conveniently reduces recorded poverty without >the need for collecting country-level data. This "subjective" and biased >assessment is carried out irrespective of actual conditions at the country >level.3 The one dollar a day procedure is absurd: the evidence amply >confirms that population groups with per capita incomes of 2, 3 or even 5 >dollars a day remain poverty stricken (ie. unable to meet basic >expenditures of food, clothing, shelter, health and education). > >Arithmetic Manipulation > >Once the one dollar a day poverty threshold has been set (and "plugged into >the computer"), the estimation of national and global poverty levels >becomes an arithmetical exercise. Poverty indicators are computed in a >mechanical fashion from the initial one dollar a day assumption. > >"Authoritative" World Bank Numbers > >These authoritative World Bank numbers are those which everybody quotes, >--ie. 1.3 billion people below the poverty line. But nobody seems to have >bothered to examine how the World Bank arrives at these figures. > >The data is then tabulated in glossy tables with "forecasts" of declining >levels of global poverty into the 21st Century. These World Bank >"forecasts" of poverty are based on an assumed rate of growth of per capita >income, --ie. growth of the latter implies pari passu a corresponding >lowering of the levels of poverty. Its a numerical game! > >World Bank "Forecasts": Poverty in China will decline to 2.9 percent by the >Year 2000 > >According to the World Bank's "simulations", the incidence of poverty in >China is to decline from 20 percent in 1985 to 2.9 percent by the year >2000.4 Similarly, poverty levels in India (where according to official >data more than 80 percent of the population (1996) have per capita incomes >below one dollar a day), the World Bank's "simulation" (which contradicts >its own "one dollar a day" methodology) indicates a lowering of poverty >levels from 55 percent in 1985 to 25 percent in the year 2000.5 > >The whole framework (stemming from the one dollar a day assumption) is >tautological; it is totally removed from an examination of real life >situations. No need to analyse household expenditures on food, shelter and >social services; no need to observe concrete conditions in impoverished >villages or urban slums. In the World Bank framework, the "estimation" of >poverty indicators has become numerical exercise. > >The UNDP Framework > >While the UNDP Human Development Group has in previous years provided the >international community with a critical assessment of key issues of global >development, the 1997 Human Development Report devoted to the eradication >of poverty broadly conveys a similar viewpoint to that heralded by the >Bretton Woods institutions. The UNDP's "human poverty index" (HPI) is >based on "the most basic dimensions of deprivation: a short life span, lack >of basic education and lack of access to public and private resources".6 > >Based on the above criteria, the UNDP Human Development Group comes up with > estimates of human poverty which are totally inconsistent with >country-level realties. The HPI for Colombia, Mexico or Thailand, for >instance, is of order of 10-11 percent (see Table 1). The UNDP measurements >point to "achievements" in poverty reduction in Sub-Saharan Africa, the >Middle East and India which are totally at odds with country-level data. > >The human poverty estimates put forth by the UNDP portray an even more >distorted and misleading pattern than those of the World Bank). For >instance, only 10.9 percent of Mexico's population are categorised by the >UNDP as "poor". Yet this estimate contradicts the situation observed in >Mexico since the mid-1980s: collapse in social services, impoverishment of >small farmers and the massive decline in real earnings triggered by >successive currency devaluations. A recent OECD study confirms >unequivocally the mounting tide of poverty in Mexico since the signing of >the North American Free Trade Agreement (NAFTA).7 > >Double Standards in the "Scientific" Measurement of Poverty > >"Double standards" prevail in the measurement of poverty: the World Bank's >one dollar a day criterion applies only to the "developing countries". Both >the Bank and the UNDP fail to acknowledge the existence of poverty in >Western Europe and North America. Moreover, the one dollar a day criterion >is in overt contradiction with established methodologies used by Western >governments and intergovernmental organisations to define and measure >poverty in the "developed countries". > >In the West, the methods for measuring poverty have been based on minimum >levels of household spending required to meet essential expenditures on >food, clothing, shelter, health and education. In the United States, for >instance, the Social Security Administration (SSA) in the 1960s had set a >"poverty threshold"which consisted of "the cost of a minimum adequate diet >multiplied by three to allow for other expenses". This measurement was >based on a broad consensus within the US Administration.8 > >The US Poverty Threshold > >The US "poverty threshold" for a family of four (two adults and two >children) in 1996 was of the order of $16,036. This figure translates into >a per capita income of eleven dollars a day (compared to the one dollar a >day criterion of the World Bank used for developing countries). In 1996, >13.1 percent of the US population and 19.6 percent of the population in >central cities of metropolitan areas were below the poverty threshold.9 > > >According to the UNDP Poverty in Mexico is lower than in the United States > >Neither the UNDP nor the World Bank undertake comparisons in poverty levels >between "developed" and "developing" countries. Comparisons of this nature >would no doubt be the source of "scientific embarrassment" --ie. the >poverty indicators presented by both organisations for Third World >countries are in some cases of the same order of magnitude as (or even >below) the official poverty levels in the US, Canada and the European >Union. In Canada, heralded by the World community as "a promised land", >occupying the first rank among all nations according to the same 1997 Human >Development Report, 17.4 percent of the population are below the (official) >poverty threshold compared to 10.9 percent for Mexico and 4.1 percent for >Trinidad and Tobago.10 > >Conversely, if the US Bureau of Census methodology (based on the cost of >meeting a minimum diet) were applied to the developing countries, the >overwhelming majority of the population would be categorised as "poor". >While this exercise of using "Western standards" and definitions has not >been applied in a systematic fashion, it should be noted that with the >deregulation of commodity markets, retail prices of essential consumer >goods are not appreciably lower than in the US or Western Europe. The cost >of living in many Third World cities is higher than in the United States. > >Moreover, household budget surveys for several Latin American countries >suggest that at least sixty percent of the population the region does not >meet minimum calorie and protein requirements. In Peru, for instance, >following the 1990 IMF sponsored "Fujishock", 83 percent of the Peruvian >population according to household census data were unable to meet minimum >daily calorie and protein requirements.11 The prevailing situation in >Sub-Saharan Africa and South Asia is more serious where a majority of the >population suffer from chronic undernourishment. > >The investigation on poverty by both organisations take official statistics >at face value. It is largely an "office based exercise" conducted in >Washington and New York with few insights or awareness of "what is >happening in the field". The 1997 UNDP Report points to a decline of one >third to a half in child mortality in selected countries of Sub-Saharan >despite the slide in State expenditures and income levels. What it fails to >mention, however, is that the closing down of health clinics and the >massive lay-offs of health professionals (often replaced by semi-illiterate >health volunteers) responsible for compiling mortality data has resulted in >a de facto decline in recordedmortality. The IMF-World Bank sponsored >macro-economic reforms have also led to a collapse in the process of data >collection. > >Vindicating the "Free" Market System > >These are the realities which are concealed by the World Bank and UNDP >poverty studies. The poverty indicators blatantly misrepresent country >level situations as well as the seriousness of global poverty. They serve >the purpose of portraying the poor as a minority group representing some 20 >percent of World population (1.3 billion people). > >Declining levels of poverty including forecasts of future trends are >derived with a view to vindicating the "free market" policies and upholding >the "Washington Consensus" on macro-economic reform. The "free market" >system is presented as the "solution", namely as an instrument of poverty >alleviation. The impacts of macro-economic reform are denied. Both >institutions point to the benefits of the technological revolution and the >contribution of foreign investment and trade liberalisation to the >eradication of poverty. > > > >TABLE 1 > >THE UNDP'S HUMAN POVERTY INDEX > >SELECTED DEVELOPING COUNTRIES > > >Country Poverty Level > > (percent of the > population below the > poverty line) > > >Trinidad and Tobago 4.1 >Mexico 10.9 >Thailand 11.7 >Colombia 10.7 >Philippines 17.7 >Jordan 10.9 >Nicaragua 27.2 >Jamaica 12.1 >Iraq 30.7 >Rwanda 37.9 >Papua New Guinea 32.0 >Nigeria 41.6 >Zimbabwe 17.3 > > >Source: Human Development Report 1997, table 1.1, p. 21 > > > >TABLE 2 > >POVERTY IN SELECTED G7 COUNTRIES, BY NATIONAL >STANDARDS > > >Country Poverty Level > > (percent of the > population below the > poverty line) > >United States (1996)* 13.7 >Canada (1995)** 17.8 >United Kingdom (1993)*** 20.0 >Italy (1993)*** 17.0 >Germany (1993)*** 13.0 >France (1993)*** 17.0 > > >Source: *US Bureau of Census, > ** Centre for International Statistics, Canadian Council on >Social Development > ***European Information Service. > > >FOOTNOTES > >1. United Nations Development Programme, Human Development >Report, 1997, New York, 1997, p. 2.) > >2. For a methodological review on the measurement of poverty see >Jan Drewnowski, The Level of living Index, United Nations >Institute for Social Research and Development (UNRISD), Geneva, >1965. See also the extensive research on poverty thresholds >conducted by the US Bureau of the Census. > >3. See World Bank, World Development Report, 1990, Washington >DC, 1990. > >4. See World Development Report, 1997, table 9.2, chapter 9. > >5. Ibid., chapter 9, table 9.2. > >6. Ibid., p. 5. > >7. See Clement Trudel, Le Mexique subit le choc de >l'internationalisation, Le Devoir, Montreal, 28 March 1998, p. >A4. > >8. See US Bureau of the Census, Current Population Reports, >Series P60-198, Poverty in the United States: 1996, Washington, >1997. > >9. US Bureau of the Census, Poverty in the United States: 1996, >Washington, 1997, p. 7. > >10. According to the official definition of Statistics Canada >(1995). For country ranks based on the UNDP's Human Development >index, see Table 6, Human Development Report, 1997, p. 161 > >11. See Michel Chossudovsky, El Ajuste Economico: El Peru Bajo el >Dominio del FMI, Mosca Azul Editores, Lima, 1992, p. 83. > > > Michel Chossudovsky > > Department of Economics, > University of Ottawa, > Ottawa, K1N6N5 > > Voice box: 1-613-562-5800, ext. 1415 > Fax: 1-514-425-6224 > E-Mail: chossudovsky@sprint.ca > > >Recent articles by Chossudovsky on the global economic crisis at: > >http://www.transnational.org/features/g7solution.html >http://www.interlog.com/~cjazz/chossd.htm >http://www.heise.de/tp/english/special/eco/ >http://heise.xlink.de/tp/english/special/eco/6099/1.html#anchor1 >http://www.newwork.com/Guest_commentary.html --- # distributed via nettime-l : no commercial use without permission # <nettime> is a closed moderated mailinglist for net criticism, # collaborative text filtering and cultural politics of the nets # more info: majordomo@desk.nl and "info nettime-l" in the msg body # URL: http://www.desk.nl/~nettime/ contact: nettime-owner@desk.nl