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Poverty

Growing the middle class

Francisco Ferreira's picture

También disponible en español

Shoppers in Chile

Since the Great Recession of 2008, there has been a widespread sense of malaise among the American middle class. Their incomes are close to stagnant, employment has not recovered, and the gap between them and the famously rich top 1% continues to grow. Look south of the Rio Grande, though, and it is quite a different picture. In the last decade, moderate poverty (under U$ 4 a day) in Latin America and the Caribbean fell from over 40% to 28%.

We want jobs, jobs, jobs

Isis Gaddis's picture

Let's think together: Every week the World Bank team in Tanzania wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a couple of questions. This post is also published in the Tanzanian Newspaper The Citizen every Sunday.

Jobs are at the very heart of living. Families escape poverty when their members secure gainful employment, and societies flourish when labor markets offer a wide range of job opportunities to citizens. And there is more to jobs than just monetary benefits. Not having a job or working under unfavorable conditions is often associated with low individual life satisfaction. Youth unemployment, in particular, can undermine the foundations of social cohesion, especially in fragile countries with a legacy of civil unrest and conflict.

Mobile phone credit instead of bread? For many Kenyans, a real dilemma

Tim Kelly's picture

What would you give up to continue using your mobile phone? For most of the six billion mobile subscribers around the world, the sacrifice might be measured in terms of a marginal loss of privacy, or of time.

Should we care equally about poor people wherever they may live?

Martin Ravallion's picture

Not so long ago, those countries designated as “low-income countries” (LICs) in the World Bank’s World Development Indicators accounted for the bulk of the world’s poor, such as by the $1.25 a day standard. Today many very poor people live instead in what are called “middle-income countries” (MICs).  The change seems dramatic. Almost all (94%) of those below $1.25 a day in 1990 lived in LICs. By 2008 the proportion was down to 26%, with the rest in MICs. Andy Sumner attracted much attention to this aspect of how the global profile of poverty has changed in his paper “Where do the Poor Live?.” Amanda Glassman, Denizhan Duran and Sumner dub this emergence of large poverty counts in MICs as the “new bottom billion.”

There has been much discussion about the implications of this change for overseas development assistance (ODA) and development policy more broadly. In particular, there have been calls for concentrating ODA on the LICs, assuming that the MICs can now look after their own poor.

But we need to look more closely at this “LIC-MIC” distinction, to understand why we have seen this change in the global poverty profile, and what relevance it might have for development policy.

Safety nets and poverty reduction: A hand-up not a hand-out

Wolfgang Fengler's picture

Do you sometimes wonder if the average person is benefiting when the economy is doing well? Aren’t the poor left behind, even in the most rapidly growing economies? Concerns around rising inequality exist in many countries, rich and poor, East and West. Kenya is among them.

Over the last 10 years, the economy grew at an average of about 4 percent. With population growth of 2.7 percent, every Kenyan would have benefited by a modest 1.3 percent per year, but that assumes the growth was distributed evenly.

Even though many governments around the world want to avoid rising inequality — at least this is what many say — they often don’t achieve it. One challenge is that the already well off tend to benefit more during periods of economic growth. The poor typically also benefit, but their income rises more slowly. Does this mean rising inequality is here to stay?

Rising Tides Raise Some Boats More Than Others

Mabruk Kabir's picture

Like a Bollywood dance sequence, South Asia’s growth numbers tend to dazzle. It is the second-fastest-growing region in the world after East Asia. But behind the glamour lies a paradox. Despite robust economic growth, the total number of people living in poverty in South Asia has not fallen fast enough. Today, there are more poor people living under $1.25 a day in South Asia than in Sub-Saharan Africa.

Social indicators are lagging as well. South Asia has the highest rates of malnutrition in the world, with 250 million children undernourished. More than 30 million children still do not go to school. Gender discrimination remains a scar. Women’s labor-force participation in the region is among the world’s lowest, boys outnumber girls in school enrollment, and legal and judicial systems still do not address systemic gender violence.

Can Non-State Service Delivery Undermine Governments?

Otaviano Canuto's picture

policeWhether it is in the U.S. presidential election campaign or as a result of the debt crisis in Europe, people on both sides of the Atlantic are debating the role of the state. Do we need more government or less of it? Do we want more public services provided by the state and funded with taxpayers’ money? Or are we better off with the private sector and nongovernmental organizations (NGOs) doing the job?

Only 14% of Tanzanians have electricity. What can be done?

Isis Gaddis's picture

Let's think together: Every week the World Bank team in Tanzania wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a couple of questions. This post is also published in the Tanzanian Newspaper The Citizen every Sunday.

Energy fuels economic development and the evidence is before our eyes every day.  Businesses require a steady supply of energy to produce goods and services.  Electricity allows school children to study after sunset and hospitals need it to save lives Insufficient or irregular energy supply is associated with significant economic cost for businesses and households.  Lack of access to clean energy also creates a myriad of health and environmental hazards, such as indoor pollution from cooking on traditional open-fire stoves and deforestation.

Unfortunately, affordable access to clean energy remains an elusive dream for most Tanzanians, especially those living outside of urban centers and the poor:

For shared prosperity Tanzania needs a universal strategy

Jacques Morisset's picture

The figures don’t lie. Today, about 11 million Tanzanians live in poverty. This is too much. Equally worrisome is that since 2001 the national poverty rate appears to be stuck at approximately a third of the total population despite rapid and stable economic growth.

People need jobs

For a long time, the Tanzanian Government has defended itself: poverty reduction will catch up thanks to the massive public investment made in social and infrastructure sectors over the past decade. More children, including girls, are going to school, and the efforts to reduce infant mortality have registered spectacular achievements. However, it is estimated that those improvements will take one generation to translate into actual productivity gains and higher incomes.

Living a long and healthy life – Africa and Kenya are only starting to catch up

Wolfgang Fengler's picture

Soon after I turned 40, I started experiencing back problems. I asked my brother for advice (he is a medical doctor) but didn’t quite like what I heard. “Sorry brother, our bodies are just not built for us to live much beyond 40…” he told me. If you take human evolution as a reference, he is right.

For the first 59,900 years of our existence (out of a total of 60,000), people used to live only into their 30s, at best. During the 1000 or so years that followed, there were some modest improvements raising life expectancy to 40 years. Things really changed only in the past 100 years on the backdrop of major medical and sanitation breakthroughs.

Invest in nutrition to invest in the future?

Janneke Hartvig Blomberg's picture

Let's think together: Every week the World Bank team in Tanzania wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a couple of questions. This post is also published in the Tanzanian Newspaper The Citizen every Sunday.

Malnutrition has detrimental effects on a child's physical growth (stunting); it can also result in irreversible damage to their brain and mental development, and it increases their risk to illness and death. The biggest impact of malnutrition is seen in the first 1,000 days of life of a child's life - from the time of conception to the time they reach their second birthday.

For women, malnutrition increases risk during pregnancy and the delivery of low birth weight babies. Malnutrition is a serious issue in Tanzania as shown by the following statistics:

Improving access to drugs: Fitting the solution to the problem

Shanta's picture

Patricio Marquez’s post correctly  identifies lack of access  to quality medicines as one of the  constraints to poor people’s health in Africa.    But the  solutions he recommends—more public money for “essential drugs benefits”, building  resilient institutions,  and providing  physicians  with better  scientific information  and guidelines  about  drug  prescriptions—are   unlikely   by    themselves  to   improve poor   people’s   health  outcomes.

More public money.  Patricio notes that out-of-pocket expenditures are about 40 percent of total health expenditures and most of this is spent on outpatient drugs.  He assumes the reason is that countries have not adopted a program of essential drugs benefits, and the reason for the latter is lack of public resources.  But consider the following facts. 

How can we improve access and get more value from drug expenditures in Africa?

Patricio V. Marquez's picture

Medicines are key inputs for quality medical care and the prevention of disease, and when administered appropriately, as evidence from Sub-Saharan African countries shows, they can contribute significantly to reducing death rates due to conditions such as HIV/AIDS, tuberculosis, and malaria.
 
But it is also obvious that not everybody in these countries, particularly the poor, enjoys this benefit, since limited access to essential drugs remains a key challenge in most health systems.  High out-of-pocket expenditures, typically more than 40% of total health expenditures in some countries (a large portion for outpatient drugs), also place a heavy burden on poor families with chronically ill members who require daily drug intake.


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