Piecing together the poverty puzzle means widening the ways in which we define and measure poverty, acknowledging that poverty is neither one-dimensional nor solely monetary in nature.

Broader measures include two higher-value poverty lines to complement the $1.90 international poverty line—$3.20 and $5.50/day, which are typical of standards among lower-middle and upper-middle income countries.

Poverty is a complex and multifaceted problem

In 2018, the number of poor in developing East Asia and Pacific at the $5.5 poverty line is almost 18 times more than at the $1.90 line.

Poverty exists in other forms that are not monetary; thus, a multi-dimensional poverty measure (MPM) is useful to assess deprivations in multiple aspects of life.

In developing East Asia and Pacific, the share of poor according to a multidimensional definition that includes consumption, education, and access to basic utilities is about 50 percent higher than monetary poverty based on the $1.9 poverty line.

As highlighted in this chapter, poverty is multi-faceted. A larger suite of poverty measures broadens our view and understanding of poverty in the developing East Asia and Pacific region.

Broader measures of poverty are important

As countries have grown economically, the yardstick for measuring extreme poverty based on the International Poverty Line (IPL)—$1.90/day 2011 PPP—has gradually become less relevant to the developing East Asia and Pacific region, which is today comprised exclusively of middle-income countries.

The more prosperous countries in the region, such as China, Malaysia, Mongolia, and Thailand have international poverty rates less than 1 percent.

However, many citizens in these countries would not believe that poverty does not exist.

Their conception of poverty and the standards of living they aspire to are much higher than what is benchmarked by the IPL. At the same time, poverty is a complex and multifaceted problem.

In addition to monetary deprivation, individuals may suffer from lack of access to basic infrastructure, education, and other critical services.

In line with these ideas, the World Bank has recently introduced new poverty measurements based on the recommendations of the Commission on Global Poverty, led by the late Professor Sir A. B. Atkinson, to consider complementary indicators to the core indicator of extreme poverty (World Bank 2017).

Higher poverty lines are needed in developing East Asia and Pacific

Given rising incomes and wealth over the past three decades, the IPL may now be too low to define whether someone is poor in developing East Asia and Pacific.

Higher international poverty lines are needed that are better suited to tracking progress and matching aspirations in more developed countries .

For people living in countries with higher overall income levels, there is value in monitoring progress with higher poverty lines that reflect the increasing costs of basic needs and services in a growing world.

https://openknowledge.worldbank.org/handle/10986/31500

About the author

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

Thailand’s GDP rebounds in Q4 but recovery still lagging its peers

Oxford Economic expects economic momentum to improve further in 2022, with GDP rising by an above-consensus 5.1%. However, Oxford Economics expects the policy rate to remain at 0.5% until Q1 2023 as Thailand’s stunted recovery and a partial recovery in tourism still warrants an accommodative stance.

Vietnam, China and Thailand are Cambodia’s top three export destinations

Cambodia’s total export to the Regional Comprehensive Economic Partnership (RCEP) member countries amounted to $1.95 billion in the first quarter of 2022, up 11 percent from $1.75 billion  over the same period last year, a Ministry of Commerce’s data showed on Thursday.

How will US interest rates affect emerging markets?

While the rate hikes were initiated to help the US domestic economy, higher interest rates are nevertheless likely to impact emerging markets.