Note this excerpt from a recent story from New Business Ethiopia:
World Bank Sees Progress against Extreme Poverty
By New Business Ethiopia Reporter
Thursday, 01 March 2012
“The percentage of people living on less than 1.25 US dollars a day and the number of poor declined between 2005-2008 in every region of the developing world, says the World Bank’s new estimate released today.”
“In Sub-Saharan Africa, for the first time since 1981, less than half of its population (47 percent) lived below 1.25 US dollars a day. The rate was 51 percent in 1981. The 1.25 US dollars -a-day poverty rate in SSA has fallen 10 percentage points since 1999. Some 9 million fewer people living below 1.25 US dollars a day in 2008 than 2005.”
To read the full article: http://newbusinessethiopia.com
For most sub-Saharan Africans their cup is still half empty
In September 2000, world leaders from over 150 countries met at the United Nations Millennium Summit, and adopted the Millennium Declaration Goals (MDG), defining eight goals to be accomplished in sub-Saharan Africa by 2015. The agreed upon goals were to: eradicate extreme hunger and poverty; achieve universal primary education; promote gender equality and empower women; reduce child mortality rates; improve maternal health; combat HIV/AIDS, malaria, and other diseases; ensure environmental sustainability; develop a global partnership for development.
The minimum target goal was to halve the proportion of people living on less than $1 a day. The World Bank (WB) in their 2008 (latest) survey used a base of $1.25 a day or $38 dollars a month for 386 million of the 812 million people, or 47.51%, living in sub-Saharan Africa. In 1981 the number of people living below the poverty level was 51%, noting a slight improvement over the thirty year period.
Having spent considerable time in twenty-three sub-Saharan African countries since 1970, the picture in the villages tells a different story. The WB survey according to the article was based on 850 households in 130 countries around the world. This is a smaller sampling than we undertake in the United States in community election polls.
The goal of “eradicating” poverty by 2015, according to experts is still far from its target. Indicating the change from 2005 to 2008 in which 9 million people, less than 1% of the population in sub-Saharan Africa, are better off at $1.25 a day still means most are living at or below the poverty level. More people die from starvation each year, than WB claims of lives having been improved. Adding twenty-five cents a day, will make little difference in the starvation rate in sub-Saharan Africa. In addition the high birth rate and rampant unemployment overshadow any small increase in their destitute situation.
Sub-Saharan Africa has been noted by experts as, “the epicenter of crisis, with continuing food insecurity, a rise of extreme poverty, stunningly high child and maternal mortality, large numbers of people living in slums, and a widespread shortfall for most of the MDGs.”
At a Chiefs of Mission Conference in April 2002, Assistant Secretary of State for African Affairs Walter Kansteiner, spoke about his concerns in sub-Saharan Africa. He said, it was the State Department’s intent to increase spending in sub-Saharan Africa and “this would make a significant difference in areas critical to their survival”. Secretary of the Treasury Paul O’Neill, a conference speaker said, “In your part of the world, we could make a difference in less than ten years, not with loans converted to grants, but with developments to create real economic growth and income growth.” He added “that we need to do better for the poorest people—going from $1 subsistence a day to $2 a day was not adequate”. He stressed the importance of creating employment opportunities, and teaching young children computer skills. That was ten years ago, and little has changed to eradicate poverty for most Africans.
Jaime Saavedra, director of the World Bank’s Poverty Reduction and Equity Group noted, “On the policy and program side, we need to continue attacking poverty on many fronts, from creating more and better jobs, to delivering better educational and health services and basic infrastructure, to protecting the vulnerable”.
In 2005 at the African Presidential Roundtable, held at Boston University’s African Presidential Archives and Research Center, Professor Adil Najam from the Fletcher School of Law and Diplomacy at Tufts University talked about the Millennium Development Goals for Africa and noted, “there had been insufficient progress in achieving these goals… and even if the goals were met, more than 500 million people would still be living on less than a dollar a day, without safe drinking water, and at risk of HIV infection.”
During my service as U.S. Ambassador I met a number of times with officials of the World Bank (WB) and International Monetary Fund (IMF), in Washington and Mauritius, to discuss ways to help Comoros and Seychelles solve critical poverty and economic issues. In Comoros the country desperately needed debt relief, new loans, and new civil affairs projects. In Seychelles the country’s pressing needs included a workable macroeconomic reform plan to help resolve the foreign exchange (forex) crisis, which affected the local business community, as well as the people living in the villages struggling to make ends meet.
In 2001 the CIA reported the Comoros GDP was $710 per capita. For the same period our embassy reported the GDP per capita of $360. Seeing the poor living conditions in many of the villages I used the lower GDP figure of $360 to make our case in Washington for support of Comoros, although we rounded up the GDP per capita to $400 or slightly more than $1 per day. The World Bank report in 2001 stated household per capita consumption was $394, or slightly more than $1 per day; that 60 percent of Comorians were living below the poverty level. The fluctuation in the 2001 GDP figures was somewhat affected by the cash remittances received from relatives living overseas. According to the United Nations, 2001 remittances from the 150,000 Comorians living abroad amounted to $26 million, or $43 per capita, and foreign assistance mainly from France, China, and the United Arab Emirates amounted to $48 per capita.
In 2005 the CIA World Factbook listed Comoros as having a GDP of $600 per capita. The World Bank in 2006 pegged it at $660, while the State Department indicated the GDP at $720 per capita. The above GDP figures indicated an increase above the $1 per day level, a significant improvement, but still did not eradicate poverty. I was encouraged by the report which indicated the poverty levels in Comoros fell to near 50 percent.
In Seychelles the GDP had increased from $1,000 per capita at the time of independence in 1976, to a GDP of $7,800 per capita in 2002 according to the CIA World Factbook. During the period of 2002 to 2005, the currency exchange rate was fixed at slightly above 5 Seychelles rupees [SCR] to the dollar, though visitors were offered SCR 10-14 on the local black market. Beginning in 2006 the Seychelles government allowed the exchange rate to float, reaching SCR 16 to the dollar in March 2009, and floating higher to SCR 18.
The 2006 World Bank report indicated a GDP of $8,600 per capita, while the International Monetary Fund reported a GDP of $11,800 per capita, both overstated considering the value of the SCR based on market conditions. Using an exchange rate of SCR 10-12 to the dollar the real GDP per capita was worth half, and at SCR 18 was overstated by an additional 50 percent.
At first I came away from meetings with these agencies believing they wanted to help the countries. Soon I became a non-believer in their ability to deliver on solutions. Each time we met there was a lack of preparedness on the agenda issues discussed in prior meetings. I finally gave up on further meetings. A simple analysis, or financial projection or debt restructuring options which seemed straight forward, they stated was not part of their role.
The 2008 World Bank report noted that the first Millennium Development Goal of halving extreme poverty in sub-Saharan Africa has been achieved before the 2015 deadline. However the report’s findings give me concern due to the small sampling of the households surveyed. “For some today their cup is half full—but for most sub-Saharan Africans their cup is still half empty.”