Great strides have been made on poverty, as I explained in a recent post, with the proportion of the poor projected to fall to 14.4% of the population of developing countries, from 41.7% in 1990. But what about hunger?

According to the UN’s 2011 assessment of the MDGs, the news is not good. In 1990, 828m people were hungry or 20% of the population of developing countries. Progress has been very slow since then:

The proportion of people in the developing world who went hungry in 2005-2007 remained stable at 16 percent [837m people], despite significant reductions in extreme poverty. Based on this trend, and in light of the economic crisis and rising food prices, it will be difficult to meet the hunger-reduction target in many regions of the developing world.

But hang on a minute. Why is the UN trotting out data for 2005-2007? That’s before the global food crisis, which hit at the same time as the financial crisis and has been just as slow to go away.

Food prices hit rock bottom in 1999, but then rose quickly with vicious increases in 2007 and 2008 (20% and 18%) and 2010 and 2011 (17% and 28%) as illustrated in the chart below.  Yet we’re still relying on data from five years ago to estimate hunger.

The UN reported ‘dire’ news of a spike in its 2009 and 2010 MDG reports, with an estimate of more than 1 billion people hungry by 2009. But then it backed off in 2011, simply reporting the old data (which, oddly and without explanation, had been revised up slightly for all years, including 1990).

What gives? The problem is that our data on hunger are extremely patchy and rely on assumptions so heroic that I am left wondering if we are currently able to say anything useful about global hunger at all.

Here’s how it works at the moment. The target on food was set at the 1996 World Food Summit and predates the MDGs. The UN Food and Agriculture Organisation (FAO) has been measuring progress since 1999. Its measurement system has four steps:

• First, it estimates the minimum energy requirement for each member of a population, based on a complex algorithm that takes age, sex, weight, and height into account (with an added allowance for pregnant women).
• Second, it works out how much food is available for human consumption, based on a country’s Food Balance Sheet, which provides an estimate for how much food is available for each person, and how many calories, protein, and fat that food contains.
• Third, it uses household surveys – where they are available – to estimate how evenly food is distributed.
• Finally, it plugs numbers into a formula that estimates the proportion of the population below the minimum energy requirement cut-off point.

There are many problems with this methodology including:

• Micronutrients are left out entirely even though they play a huge role in nutrition, especially for the normal development of young children.
• We often don’t really know how much food a country has available – Food Balance Sheets are poor at capturing data on non-commercial food production; and at estimating how much food is being used for animals, is being stored in reserves, or is wasted.
• People aren’t that good at estimating their own food intake when asked in a household survey (let alone that of family members), while countries do surveys infrequently, if at all. As a result, estimates of the distribution of food are, at best, educated guesses.  Moreover, and as far as I can tell, FAO has not been good at documenting which countries have surveys, or from when.
• It’s hard to know how much food people need – especially as they’ll become less active as their food gets scarce (thus burning less energy).
• In countries where many people go hungry, a large proportion of the population hovers just above and below the minimum energy requirement, making estimates of hunger extremely sensitive to small changes in underlying assumptions.
• Perhaps most importantly for the current crisis, price is not fully considered. As staples become more expensive, presumably the poor consume less and the distribution of food changes markedly.  Hunger may therefore grow much faster than suggested by the fall in average food consumption. Surveys have no hope of capturing the impact of volatile prices.

FAO’s figures have faced sustained criticism for at least a decade. Back in 2004, a somewhat huffy note from a FAO statistician defended its methodology as ‘the best available’ and dismissed various ‘methodologically incorrect’ alternatives.

More recently, however, the damn has burst, with FAO sent back to the drawing board in 2010, by the Committee on World Food Security.  We are promised revised statistics that will improve modelling of the impact of price increases and income shocks, strengthen food balance sheets, integrate more household surveys, and include micronutrients and other factors in the mix.

But in the meantime, the presentation of data is suspended. Estimates for the number of undernourished people in 2009 and 2010 have been withdrawn, and no figures for 2011 have been prepared.

In the midst of the first ever global food crisis, in other words, the lights have been turned off. 837m people were probably hungry four to six years ago. Maybe. That might have gone up above a billion, or perhaps it didn’t. Hunger is either resurgent or it isn’t.

Of course, leaders are using the old figures without too many scruples. Here’s Ban Ki-Moon from just last month:

Even before the food crisis began, eight hundred million people were going to bed hungry at night. Now, a staggering nine hundred and twenty-three million people suffer from chronic hunger and under-nutrition.

But I think it’s pretty clear that, until the FAO comes back with new and better data, the ‘correct’ answer to the question ‘how many people are hungry?’ is – ‘we simply don’t know’. Apparently, the matter will be considered at an International Scientific Symposium in Rome in January next year.

Let’s hope FAO pulls its finger out and we don’t go that much longer without any data.

Having just been rude about one World Bank report, here’s a positive review of another – the Global Monitoring Report 2011, which the Bank produces jointly with the IMF.

The GMR updates progress against the Millennium Development Goals – targets that were set as the culmination of a push throughout the 1990s to take poverty to the centre of the international agenda.

For a long time, it seemed that the MDGs were going to be an embarrassing failure. In 2009, as the UN prepared for the 2010 MDG review conference, Kofi Annan rang the alarm:

We have been moving too slowly to meet our goals. And today, we face a global economic crisis whose full repercussions have yet to be felt. At the very least, it will throw us off course in a number of key areas, particularly in the developing countries. At worst, it could prevent us from keeping our promises, plunging millions more into poverty and posing a risk of social and political unrest. That is an outcome we must avoid at all costs.

The MDGs’ many critics felt vindicated. In particular, Bill “just asking that aid benefit the poor” Easterly was over the moon. “Let’s face it: it’s over,” he wrote. “The MDGs will not be met.” Idealistic development campaigners had wasted their time on a set of arbitrary and poorly designed goals. Africa had been deliberately made to look like a failure, in what was an unforgiveable set up.

The 2010 MDG summit was a somewhat sombre affair. Sir Bob Geldof (seen saluting the troops, above) demanded that all 189 leaders who agreed the Millennium Declaration should be pulled out of retirement (or the ground, if applicable) to issue a personal apology to him, and the world’s poor. [OK – I made that bit up.]

But wait a minute…

Then something unexpected happened. The Great Recession largely spared the developing world (so far at least) and, far from slowing down, the decline in poverty accelerated. According to the GMR, the headline target – halving the proportion of people living in poverty by 2015 – is not just going to be met, it’s going to be smashed.

In 1990, 41.7% of the world’s population lived on less than $1.25 a day (this figure has been endlessly restated, which is a story in and of itself – see graphs below). That’s dropped to 25.2% in 2005, less than five percentage points above the 2015 target of 20.9%. By 2015, the IMF and World Bank project it will be down to 14.4% – a reduction of nearly a third.

At this point, it’s more or less obligatory to point out that this is all down to China (with a small contribution from India), and that ‘real’ poverty – in Africa – hasn’t been touched. Except that’s not the whole story.

China has seen an astonishingly rapid progress – poverty was down almost fourfold by 2004, and is projected to be cut 12.5 times by 2015. India is also seeing accelerating improvements and is projected to have reduced poverty by more than half by the target date.

But Africa isn’t expected to do as badly as many people think. Its poverty rate was 57.6% in 1990, had fallen to 50.9% in 2005, and is projected to be 35.8% in 2015. That’s still ten percentage points above the target, but if attained, it would be far from an abject failure (180m fewer Africans in poverty in 2015 than would have been the case with no reduction in the proportion of the poor).

Progress on non-income MDGs has been much less impressive. In 2009, hunger was down only 4 percentage points (to 16%), and seems highly unlikely to halve by 2015. In the same year, 11% of kids were not in primary school, against a universal enrolment target for 2015.

The news on health is a bit better. Infant mortality was down by a third in 2009, when it is supposed to drop by two thirds. And maternal mortality has fallen by 35% when the target is three quarters. But, over the past few years, the corner seems to have been turned on HIV/AIDS, TB, and malaria – with deaths from all three diseases now past their peak.

Ending Poverty

But let’s go back to the poverty MDG. In 1990, there were 1.8 billion poor people (in a world of 5.3bn people). If the IMF/Bank projections pan out, by 2015, there’ll be 882.7m poor people left (in a world of 7.3bn). That represents real progress in both relative and absolute terms.

Here’s a thought. In the debate about what should succeed the MDGs, one obvious option is simply to extend the current set of goals and focus harder on the challenges facing the 15% of the world’s population that will still be below the poverty line in 2015.

If poverty does indeed fall by a billion between 1990 and 2015, then there’s no reason why it shouldn’t fall as fast over the next fifteen years, even as the global population grows by another billion. In other words, having halved absolute poverty, leaders could commit to abolishing it by 2030.

Here are some thoughts on the implications of an attempt to abolish poverty.

First, much depends on whether the Bank and IMF’s projections hold up for the speed of poverty reduction between now and 2015. The key factor is the speed of growth we see between now and then. The GMR expects 6-7% annually in emerging and developing economies between 2012 and 2014, including 5.7% annually in Africa.

There’s no reason for this not to happen. The Bank and IMF continue to be confident that the twin track recovery (boom times everywhere but in the West) will continue. I am less sure, though, that developing countries can avoid trouble indefinitely if Europe and America continue to head deeper into the mire.

Second, much will depend on the nature and quality of growth that is generated, and whether we will continue to see the worrying divorce of income growth from human development (health, education, gender, etc.).

The GMR has an interesting box on poverty in Brazil, which was one of the most unequal countries in the world in 1990, but has seen both growth and a sharp decline in inequality since 2003:

The 1990s marked the expansion of social safety nets in Brazil. Public social expenditure, including conditional cash transfers such as the Bolsa Família, targeted to poor families rose from 17.6 percent of GDP in 1990 to 26.0 percent of GDP in 2008—an increase of almost 50 percent in education, health, housing, and social security. Recent evidence suggests that this increase in social spending and better targeting contributed much to reducing poverty and inequality.

The Bank and IMF believe that these policies took an additional 17.5 million people out of poverty, bringing the absolute poverty rate down by 9 percentage points more than if inequality had stayed high.

Back in 1990, the World Development Report started the push to put poverty at the top of the international agenda. It said there were two secrets to effective poverty reduction: labour intensive growth and greater investment in the provision of basic services to the poor.

That was true then, and it’s true now. That’s why we need a big push on the non-income MDGs in advance of 2015, and extensive use of social protection is needed to boost the impact of growth on the quality of life of the poor.

Take education – 67 million children are still out of primary school and 70% of them live in just 10 countries. With political will, this is a relatively easy problem to fix, and in a way that improves quality, rather than eroding it. It’s also a vote winner, if politicians can be persuaded that they’ll see results within an electoral cycle.

Third – and assuming, we’re down below 900m poor people in 2015 – a great deal will ride on what happens in Africa, which will be home to 40% of the poor (another 30% will live in India).

I am quite bullish about Africa’s prospects. After 50 years of terrible demography (loads and loads of children), Africa is now swimming with the demographic tide, as its baby boom generation hits the workforce in larger numbers, and its dependency ratio drops (more adults relative to children and young people).

With similarly favourable demography, Asia has seen strong growth as more adults support children and the elderly. In the 2020s, we could be talking about an African ‘economic miracle’, but only if the continent creates jobs for the 7-10 million young people entering its labour market each year, and makes sure that at least some of them have skills tailored to the continent’s comparative advantage.

There are obvious bear traps. Unemployment and underemployment are already far too high. At the moment, the average Nigerian only produces more than he or she consumes for an average of 30 years of their life, compared to 34 years in Indonesia, 35 years in India, and 37 years in China. This intensifies the need for a greater focus on human development and on the distribution of growth.

Fourth, political instability – and, above all, conflict – will be obvious deal breakers for the post-2015 poor.

Unsurprisingly, lower income countries are making the slowest progress on poverty. While two thirds of countries are on target, or close to target, for all MDGs, only six out of forty LICs are on track to meet MDG1 (poverty) and just one is on target to meet MDG5 (maternal mortality).

Almost all of these countries have very weak institutions, and many of them have experienced repeated cycles of conflict. Although the number of civil and interstate wars has fallen in recent decades, many countries remain locked in cycles of repeated violence.

According to the 2011 World Development Report, “for every three years a country is affected by major violence (battle deaths or excess deaths from homicides equivalent to a major war), poverty reduction lags behind by 2.7 percentage points… fragile and conflict-affected states and those recovering from conflict and fragility, account for 47% of the population [of developing countries], but they account for 70% of infant deaths, 65% of people without access to safe water, and 77% of children missing from primary school.”

This is not just a problem for the poorest countries, of course, but for highly unstable middle income countries such as Pakistan and Nigeria, which are guaranteed to be on the frontline of the fight against poverty post-2015.

Fifth, an attempt to abolish poverty will become harder as it progresses, not easier, as poor people are targeted who face multiple obstacles preventing development.

Despite all the money that is spent on international development, we still know far too little about poverty in countries where problems are most deep-seated.

In Africa, 2005 poverty estimates were based on data for less than 70% of the population. Many countries have either not completed household surveys in recent years, or have not collated the results.  It is still common to find donors supporting huge programmes in countries where they cannot even be sure, say, how many children are not in school.

Voices of the Poor – the World Bank’s survey of 60,000 poor people is still spoken of with reverence, but it’s over ten years old. Few countries have the detailed, shared data sources – and accompanying analysis – on the drivers of poverty that are needed to underpin any effort to reach the poorest.

And sixth, much will depend on how resilient developing countries prove to a range of new threats.

Resource scarcity is clearly a game changer, both for poor countries that have extensive natural resources, and which risk an intensification of their ‘resource curse’, and for those that don’t.

Food and energy inflation has a disproportionate impact on the poor, as incomes grow but fail to keep pace with the cost of living. Progress against hunger was stalled even before the food crisis. The IEA projects no decline in energy poverty levels (cooking on biomass and/or no electricity) by 2030.

The poor also have few reserves in the face of famine, floods, droughts, earthquakes, etc. 20-40% of GDP of African countries comes from agriculture – every percentage point loss in the sector due to a natural disaster knocks off a quarter of percentage point, with a more pronounced impact on poor households.  Population pressures, and climate change, will intensify these risks.

The news here is not necessarily bad. In an era of higher food prices, a rural renaissance is possible, if agricultural investment gets down to the grassroots and those living in the countryside are rewarded for the ecosystem services they provide.

Ideally, urban and rural development policy need to be rethought together. All population growth is now in the towns and cities of the developing world, which will struggle to secure the resources they need to support their populations.

Some of the world’s biggest cities look pretty fragile to me (Karachi, for instance – 15 million people in 2015, probably 20 million by 2030), while I also wonder whether trouble is growing in the ‘long tail’ of countless smaller towns where roughly a quarter of the world’s population resides.

Post-2015 Development

If we take out the crystal ball, what are the prospects for development post-2015? We could categorise countries according to the challenges ahead of them (and the poverty reduction strategies that will be most effective).

(i) Development’s A-List: stable middle income countries with a reasonable or strong commitment to inclusive growth, investment in social development, and other pro-poor policies.

(ii) Rising stars: Low income countries with comparatively strong institutions and increasing growth and poverty reduction potential.

(iii) Tough nuts: Middle and low income countries with fragile and/or failing institutions, and endemic problems with conflict/violence.

I then see three broad scenarios post-2105, all of which assume that the Bank/IMF projections hold out for the new few years (this is a big if).

• More of the same: progress on poverty is concentrated in less fragile states. The proportion of the poor continues to drop, but absolute numbers fall slowly, if at all.
• Backwards step: conflict, macroeconomic or political instability, or new risks (scarcity) see one or more large countries drop out of the A-list.
• Tough nuts cracked: progress accelerates in a growing number of fragile states, while more inclusive growth reaches the poorest in all poor and middle income countries.

I’d also expect (or hope) to see:

• An early commitment from governments to ending poverty, allowing development of a roadmap for ending poverty that can be implemented from 8 September 2015, the anniversary of the Millennium Declaration.
• The commitment to ending poverty to be part of any broader package of sustainable development goals, but in a way that ensures resources are ring fenced and the post-2015 poverty agenda is insulated from the (likely) failure to agree SDGs.
• Tailored strategies for ending poverty in key regions (Africa) and groups of countries (e.g. conflict-afflicted), for achieving results on specific MDGs (e.g. the 10 countries where 70% of the kids out of school live), and for an integrated response that releases the potential of catalytic groups (e.g. women).
• A renewed commitment from international development agencies to focus on the very poorest, and to bring together disparate existing bilateral and multilateral development strategies into an integrated approach to the post-2015 agenda.
• Development assistance (and especially development expertise) to be very heavily focused on the ‘tough nuts’, with upwardly-mobile middle income countries largely left to fend for themselves (and to export their models to poorer countries), and a continued provision of budgetary support to any ‘rising star’ able to cope with it.

Conclusion

In the Millennium Declaration, the world’s leaders described the world’s central challenge as ensuring “globalization becomes a positive force for all the world’s people” and promised to “spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty.”

They were committed, they said, to “freeing the entire human race from want.”

With poverty in retreat, I think we should be doubling down on that commitment, and moving from halving poverty by 2015, to ending it by 2030. It’s a stretching target, especially if contagion from the economic crisis finally hits developing countries, and especially as the last of the poor will find it hardest to escape from poverty.

But it also seems to be a target that could be achieved. What do you think? Am I wrong?

Our main conclusion is that Africa is reducing poverty, and doing it much faster than we thought. The growth from the period 1995-2006, far from benefiting only the elites, has been sufficiently widely spread that both total African inequality and African within-country inequality actually declined over this period. In particular, the speed at which Africa has reduced poverty since 1995 puts it on track to achieve the Millennium Development Goal of halving poverty relative to 1990 by 2015 on time or, at worst, a couple of years late. If Congo-Zaire converges to Africa once it is stabilized, the MDG will be achieved by 2012, three years before the target date. These results are qualitatively robust to changes in our methodology, including using different data sources and assumptions for what happens to inequality when inequality data is not available.

Not much reaction yet – but I’m intrigued to see what other economists are going to make of their work…

Update: Xavier Sala-i-Martin has a wonderfully crazy Columbia University website – he likes FC Barcelona, Salvador Dali and Beavis and Butthead.

Update II: These Economist articles from 2004 (one, two) offer useful background. The crux of the matter seems to be that Sala-i-Martin and Pinkovskiy use GDP to measure poverty (working out distribution of income from household surveys) – the World Bank’s figures are derived directly from the surveys themselves.

Among the most arresting are the crowds gazing at DVDs playing in shops; the emptiness of markets after festivals; the accused dressing up for court in clean T-shirt and flip flops; young African girls on the beach with old white men; the hordes of disabled people – not just amputees from the war but also victims of polio, leprosy and unhealed fractures; beggars of all ages on every street corner; the ubiquity of slums, which as well as having whole districts to themselves also fill in the gaps in more affluent areas;  billboards telling people to beware of counterfeit medicines; people collecting used plastic water bottles; the popularity of lottery outlets; car engines being switched off going downhill; children outside a bar at night using the electric light from inside to see their homework; stalls selling individual cigarrettes, pills and teabags; incessant and insistent requests for money or help with getting to the UK, even by people who work; the huge number of working children; and, of course, the proliferation of NGOs.

And finally an audible indicator of poverty, in the shape of a complaint made to me last weekend by an old man in a slum: “We should be shitting four or five times a week,” he said, “but people here only shit twice a week.”

(1) it looks gorgeous – really fresh design and layout;

(2) it’s clearly trying to move towards a more engaged and participative approach;

(3) Christian Aid have internalised the lesson that making the conversation happen is more important than getting the credit for being the host: the only reference to Christian Aid on the whole site is on the About page; and best of all…

(4) It’s really edgy. Rather than the usual stuff about ‘more and better aid’ etc. – yawn – it focuses on issues like the cocaine trade or ladyboys in Thailand.  Indeed, such is the site’s edginess that it even has a partnership with Vice magazine, who are about as far from being the sort of organisation you’d expect Christian Aid to have as a buddy as you can possibly imagine.  (I exaggerate not: Vice’s website currently sports a how-to guide on anal sex as its top story. Christian Aid – who knew?)