PHM-Exch> Fwd: More Poverty for the Poor
Claudio Schuftan
cschuftan at phmovement.org
Wed Jul 24 02:19:56 PDT 2024
From: Jomo from Challenging Development+ <jomodevplus at substack.com>
Date: Wed, Jul 24, 2024 at 3:07 PM
Subject: More Poverty for the Poor
Many low-income countries (LICs) continue to slip further behind the rest
of the world. Meanwhile, people in extreme poverty have been increasing
again after decades of decline.
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for more
More Poverty for the Poor
<https://substack.com/app-link/post?publication_id=244813&post_id=146948715&utm_source=post-email-title&utm_campaign=email-post-title&isFreemail=true&r=1a0gij&token=eyJ1c2VyX2lkIjo3NzI4MzczOSwicG9zdF9pZCI6MTQ2OTQ4NzE1LCJpYXQiOjE3MjE4MDg0MzQsImV4cCI6MTcyNDQwMDQzNCwiaXNzIjoicHViLTI0NDgxMyIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.nXFAu-1Ind-1p_iY_sWXWdnU9QHjAVea9jwLzupToCo>Many
low-income countries (LICs) continue to slip further behind the rest of the
world. Meanwhile, people in extreme poverty have been increasing again
after decades of decline.
Jomo <https://substack.com/@jomomydevplus>
Jul 24
<https://substack.com/@jomomydevplus>
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*More Poverty for the Poor*
By Jomo Kwame Sundaram
<https://substack.com/redirect/71941c1e-97e9-4d1f-a870-80f1f0b00376?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
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KUALA LUMPUR, Malaysia, Jul 24 2024 (IPS) - Many low-income countries
(LICs) continue to slip further behind the rest of the world. Meanwhile,
people in extreme poverty have been increasing again after decades of
decline.
*Falling further behind*
World output more than doubled from $36 trillion in 1990 to $87 trillion by
2021 (in constant US dollars), but this growth has not been evenly
distributed, causing most LICs to fall further behind.
Many of the world’s poorest economies have had meagre growth since the
1960s. As most developing countries have made progress, income gaps among
nations have declined.
World economic stagnation adversely affects most countries and people,
especially developing countries relying on commodity demand and prices. As
much of the world grew, most LICs fell further behind.
Hundreds of millions are stuck in extreme poverty, with incomes per capita
in many post-colonial countries barely changing. A World Bank paper
<https://substack.com/redirect/bfbdb27d-9aad-4711-bbdf-931151fa5759?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
argues
the poor are especially worse off.
Many poor nations have not caught up, let alone diversified their
colonial-type economies. Meanwhile, many poor nations remain mired in
conflict, deepening their stagnation.
Poverty has risen due to poor progress as populations grew. Another World
Bank
<https://substack.com/redirect/0eab8948-e2ec-4902-8fa7-fb91ccb51d13?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
report
found lower growth correlated with conflict deaths and institutional
fragility. Unsurprisingly, these countries often had the world’s highest
poverty rates.
Worse, global warming disproportionately harms poor tropical nations and
their populations much more. Climate change is expected to push well over a
hundred million into extreme poverty
<https://substack.com/redirect/c00791c1-dc89-46d7-906f-5467a75a3336?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
by
2030.
*Left behind*
Paper co-author Paul Collier
<https://substack.com/redirect/30e1baca-67a8-464a-8564-3c69114b2e09?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
identified
58 countries in Africa, Asia and Latin America, with about 1.4 billion
people in 2021, as the ‘Bottom Billion’. Collier argues most still face
problems and have failed to progress since.
These nations have long suffered from persistent poverty, low growth, and
failure to develop. Their plight has been exacerbated by civil conflict,
geographic constraints, and, often, the inability to use their natural
resources to accelerate economic development.
Since the 1980s – not the 1960s and 1970s, as the Bank paper claims – the
Bottom Billion countries have failed to grow, falling behind instead. By
contrast, the few former LICs that sustained high growth now enjoy per
capita outputs at least thrice that of other Bottom Billion countries.
Except for these few notable exceptions, most of the 58 Bottom Billion
countries remain LICs or have become lower-middle-income countries. Only
six have achieved upper-middle-income country status in the past decade,
mainly due to rapid growth thanks to oil and gas.
Although the Bottom Billion countries exist in all regions, about
two-thirds (38 of 58) are in SSA. They account for 77% of the Bottom
Billion population. Over half have abundant natural resources, but most
have not used their mineral wealth to sustain economic progress.
In 2012, the IMF
<https://substack.com/redirect/fdf779d1-fa54-46ed-821a-c1b4fc3a8565?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
classified
34 of the 58 Bottom Billion countries as ‘resource-rich’, with
non-renewable resource exports and revenue often exceeding 20% of their
total exports and government revenue, respectively. But most still
experience lacklustre growth, if any.
Since 1990, Sub-Saharan Africa (SSA) averaged barely 0.8% annual per capita
income growth. Meanwhile, global growth rates doubled as regions like East
Asia registered more than 6% yearly per capita growth rates.
Anaemic growth meant that the average incomes of Africans and other
slow-growing LICs slipped further behind the rest of the world. Using the
World Bank’s global poverty line, the number of poor Africans grew by tens
of millions.
If current growth and poverty trends persist, many slow-growing or stagnant
LICs, mainly in Africa, will be unable to end extreme poverty, let alone
catch up with the rest of the world.
*Poorest worst off*
Conventional growth models
<https://substack.com/redirect/07ef687d-8aee-44f4-a081-6f4d82fd4619?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
imply
that countries lagging behind should grow faster than those already ahead.
East Asian industrialisation – supposedly emulating earlier European growth
– supports this notion.
Growth in many LICs has slowed since the turn of the century. The paper
finds that “The Bottom Billion fared worst of all”, as per capita output
barely rose.
The poorest Bottom Billion did not experience convergence by catching up
with the others. While some studies suggest overall income convergence, the
world’s poorest are relatively worse off.
Now, the Bottom Billion are ‘falling behind’ while those in extreme poverty
may be rising again. Incomes of the world’s poorest countries and people
are likely to fall behind, even if only relatively, despite some
convergence among countries.
The situation has worsened since 2022. In addition to the commodity-price
collapse since 2015, the COVID-19 pandemic, the Ukraine and Gaza wars, and
geopolitically driven unilateral sanctions have ensured protracted
stagnation.
Bottom Billion countries lack the policy and fiscal space to cope with, let
alone address, the impending debt crises. The situation has been
exacerbated by tighter credit with high interest rates set by the US Fed.
Despite decades of recognising LIC characteristics, the World Bank has yet
to develop strategies, policies and means to overcome their poverty. It is
unclear why the Bank has endorsed the Bottom Billion designation, although
it has not enhanced our understanding of poverty.
*Related IPS Articles*
· Land Grabs Squeeze Rural Poor Worldwide
<https://substack.com/redirect/216e570b-c082-4452-b35d-44d68ed3939f?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Chronicle of a Catastrophe Foretold
<https://substack.com/redirect/8265802e-bf56-4a45-aa83-bbc042fb4c22?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Global South Stagnating under Heavier Debt Burden
<https://substack.com/redirect/6d113b2a-de47-4167-9159-f1fe82f9d5ef?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Onerous Debt Making Poorest Poorer
<https://substack.com/redirect/21652321-0450-472e-a944-e924c3d53009?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Rich Nations, IMF Deepen World Stagnation
<https://substack.com/redirect/6ce73252-4b5c-44d6-a77a-896756b4daa9?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Out of Africa: Rich Continent, Poor People
<https://substack.com/redirect/3efe0db3-c2b5-4a61-9ab5-816ebde6104b?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· IMF, World Bank Must Urgently Help Finance Developing
Countries
<https://substack.com/redirect/d10b24af-bc38-4d65-89a5-15cdffacf799?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Neoliberal Finance Undermines Poor Countries’ Recovery
<https://substack.com/redirect/fd55bdb8-314d-4706-8806-83c2d5f0d4e5?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Poor Lives Matter, but Less
<https://substack.com/redirect/508e0ae8-d054-4d9a-bf42-cd9f9dd37163?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
· Social Protection Necessary to Quickly End Poverty,
Hunger
<https://substack.com/redirect/388ddf65-21c6-46a0-8985-24f0dbfc04e3?j=eyJ1IjoiMWEwZ2lqIn0.PS59_znKHzlOwVUkakEgDIZc_vNuaWsHL-9LkCsoC2Q>
https://www.ipsnews.net/2024/07/more-poverty-for-the-poor/
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<https://substack.com/redirect/2/eyJlIjoiaHR0cHM6Ly9zdWJzdGFjay5jb20vc2lnbnVwP3V0bV9zb3VyY2U9c3Vic3RhY2smdXRtX21lZGl1bT1lbWFpbCZ1dG1fY29udGVudD1mb290ZXImdXRtX2NhbXBhaWduPWF1dG9maWxsZWQtZm9vdGVyJmZyZWVTaWdudXBFbWFpbD1jc2NodWZ0YW5AcGhtb3ZlbWVudC5vcmcmcj0xYTBnaWoiLCJwIjoxNDY5NDg3MTUsInMiOjI0NDgxMywiZiI6dHJ1ZSwidSI6NzcyODM3MzksImlhdCI6MTcyMTgwODQzNCwiZXhwIjoxNzI0NDAwNDM0LCJpc3MiOiJwdWItMCIsInN1YiI6ImxpbmstcmVkaXJlY3QifQ.SjtunldpJ6t_sN5-F6q1tL5Ht3klzBBDCkcjqFuiAks?>
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