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South Asia

Behind Closed Doors: how traditional measures of poverty mask inequality inside the household and a new look at possible solutions

Caren Grown's picture

During the days coming up to, and after October 17, when many stories, numbers, and calls for action will mark the International Day for the Eradication of Poverty, we want to invite you to think for a second on what you imagine a poor household to be like. Is this a husband, wife, and children, or maybe an elderly couple? Are the children girls or boys? And more importantly, do all experience the same deprivations and challenges from the situation they live in?  In a recent blog post and paper, we showed that looking at who lives in poor homes—from gender differences to household composition more broadly—matters  to better understand and tackle poverty.

Globally, female and male poverty rates—defined as the share of women and men who live in poor households—are very similar (12.8 and 12.3 percent, respectively, based on 2013 data). Even in the two regions with the largest number of poor people (and highest poverty rates)—South Asia and Sub-Saharan Africa—gender differences in poverty rates are quite small. This is true for the regions, but also for individual countries, irrespective of their share of poor people. Why is that the case? As Chapter 5 of the 2018 Poverty and Shared Prosperity Report explains, our standard monetary poverty indicator is measured by household, not by individual. So, a person is classified as either poor or nonpoor according to the poverty status of the household in which she or he lives. This approach critically assumes everyone in the household shares equally in household consumption—be they a father, a young child, or a daughter-in-law.  By design, it thus masks differences in individual poverty within a household.

Notwithstanding this shortcoming, when we look a bit deeper the information we have today still shows visible gender differences in poverty rates. Take age, for example. We know that there are more poor children than poor adults, and while we do not find that poverty rates differ much between girls and boys at the early stages of life, stark differences appear between men and women during the peak productive and reproductive years.

Moving India’s railways into the future

Joe Qian's picture
Laying Tracks
Progress is being made on the largest railway project in India's modern history – the Dedicated Freight Corridor Program. 
View the 3D presentation here
Thump…thump…thump...like a slow rhythmic drum, concrete ties that hold the track in place are laid down one after another with the latest machinery as rails are placed precisely on top of them.

It’s nearing sunset near the town of Hathras in India’s state of Uttar Pradesh, home to 220 million people—more than the entire population of Brazil.

Progress is being made on the largest railway project in India’s modern history that will increase prosperity by helping move people and goods more safely, effectively, and in an environmentally-friendly way.

India’s Dedicated Freight Corridor (DFC) program is building dedicated freight-only railway lines along highly congested transport corridors connecting the industrial heartland in the north to the ports of Kolkata and Mumbai on the eastern and western coasts.
 
India Trains
Passengers and freight trains currently share tracks in India which can cause congestion and delays. The project will help increase the speed of freight rail to up to 100km/h from the current 25km/h average. 

Through these efforts, DFC is expected to improve transport and trade logistics – bringing much needed jobs, connectivity, and urbanization opportunities to some of India’s poorest provinces – including Bihar and Uttar Pradesh while helping protect the environment. The electric locomotives will help ease India’s energy security issues and escalating concerns about traffic accidents, congestion, carbon emissions, and pollution created by road traffic. 

Near Hathras and simultaneously in different sites in the country, workers equipped with modern equipment and techniques efficiently lay 1.5 km of new track per day in different weather conditions. Once completed, electric cables are stretched above and signaling is installed, all in preparation for the electric locomotives reliably to carry their cargo across the country at maximum speed of 100km/h, compared to an average current speed of 25 km/h.

Afghanistan: Learning from a decade of progress and loss

Shubham Chaudhuri's picture
Afghanistan: Learning from a decade of progress and loss


In Afghanistan, the past decade saw remarkable progress, as well as reversals and lost opportunities.

The overall macroeconomic and security context in Afghanistan since 2007 can be broken into two distinct phases, pre- and post- the 2014 security transition, when international troops handed over security responsibilities to the Afghan National Security Forces (ANSF).
 
The pre-transition phase was marked by higher economic growth (GDP per capita grew 63 percent relative to its 2007 value) and a relatively stable security situation.

Since 2014, growth has stagnated, falling below rates of population growth, and the security situation continues to deteriorate. With the withdrawal of most international troops and the steady decline in aid (both security and civilian aid) since 2012, the economy witnessed an enormous shock to demand, from which it is still struggling to recover.

Similarly, welfare can be characterized into two distinct phases.

Finishing the job of ending poverty in South Asia

Hartwig Schafer's picture
This Bangladeshi woman was born in poverty. With the right kind of education, life in poverty quickly became a story from the past for her. Credit: World Bank

"I have a four-year-old son back in my village. I want to make a better life for him,” says Sharmin Akhtar, a 19-year-old employee in one of Dhaka’s many flourishing garment factories.

Like thousands of other poor women, Sharmin came down to Bangladesh’s capital from her village in the country’s north to seek a better job and create a more prosperous future for her family—leaving behind a life of crushing poverty.

Today, as we mark End Poverty Day 2018, it’s important to note that Sharmin’s heartening story is one of many in Bangladesh and the rest of South Asia, where economic growth has spurred a dramatic decline in extreme poverty in the last 25 years.

And the numbers are striking: In South Asia, the number of extreme poor living on less than $1.90 a day dropped to 216 million people in 2015 from 275 million in 2013 and 536 million in 1990.

Even more remarkable, South Asian countries experienced an increase in incomes among the poorest 40 percent of 2.6 percent a year between 2010-2015, faster than the global average of 1.9 percent.

On a global scale, the highest concentration of poor shifted from South Asia to Sub-Saharan Africa in 2012. And India is likely to be overtaken, if it has not already been, by Nigeria as the country with the most people living in extreme poverty.

It’s worth thinking about how far South Asia has come – but remaining clear-eyed about how far we must go to finish the fight against extreme poverty.

Indeed, it is increasingly clear that poverty is more entrenched and harder to root out in certain areas, particularly in rural areas and in countries burdened by violent conflict and weak institutions.

Estimates for 2015 indicate that India, with 176 million poor people, continued to have the highest number of people in poverty and accounted for nearly a quarter of the global poor.

True, the extreme poverty rate is significantly lower in India relative to the average rate in Sub-Saharan Africa. But because of its large population, India’s total number of poor is still large.

And while there has been a substantial decline in the numbers and rate of people living below $1.90 in South Asia, the number of people living on less than $3.20 has declined by only 8 percent over 1990-2015 because of the growing population.

In 2015, 49 percent of the population of South Asia were living on less than $3.20 a day, and 80 percent were living on less than $5.50 a day.

How Much Will the Belt and Road Initiative Reduce Trade Costs?

Michele Ruta's picture
The Belt and Road Initiative (BRI) is a development strategy proposed by China to improve cooperation on a trans-continental scale. The range of projects and activities that will be part of the BRI is very wide, including policy coordination, infrastructure, trade and investment, financial and people-to-people exchanges. But a key goal of the Initiative is to boost connectivity and reduce trade costs through new and improved transport infrastructure projects.
 

Giving people control over their data can transform development

Nandan Nilekani's picture
Suguna, one of the many women who has benefited from Aadhaar– her digital identity. © Bernat Parera
Suguna, one of the many women who has benefited from Aadhaar– her digital identity. © Bernat Parera

In Para village of Rajasthan, India, Shanti Devi’s livelihood depends on wages earned through MNREGA (India’s rural employment guarantee program) and a pension for her and her disabled husband. Eight years ago, a postman would deliver this cash to any household member he found. Sometimes she did not receive the full amount because a relative would claim her money. Even when she did, women like Shanti Devi did not have a secure way to save it because she was unbanked. Opening a bank account needed an individual identification card which many women lacked.

Today, Shanti Devi’s life has changed because of Aadhaar – her digital identity. All of her cash benefits are transferred directly into her bank account, which she was able to open with her Aadhaar number and her fingerprint. She can make and receive digital payments, with any person or business, even without a smartphone. With her ID, she is now fully empowered to exercise her rights, access services and economic opportunities. Most of all, she is afforded the dignity to assert her identity.  

Foreign Investment Growth in the Belt and Road Economies

Maggie Xiaoyang Chen's picture
A major objective of the Belt and Road Initiative (BRI) is to reduce the time and cost it takes to transport goods and people across BRI economies. Many of these countries face serious gaps in infrastructure, especially related to trade and investment.
 
Traveling on a rural highway in Kazakhstan. PhotoCredit: Kubat Sydykov / World Bank 

Afghanistan’s prosperity rests on investing in its people

Shubham Chaudhuri's picture
Afghanistan’s prosperity rests on investing in its people
Primary school students are attending their class in northern Balkh Province. Photo credit: Rumi Consultancy/ World Bank

Today, the World Bank Group released the first Human Capital Index (HCI), a new global indicator to measure the extent to which human capital in each country measures up to its full potential.
 
The HCI is part of the World Bank Group’s Human Capital Project intended to raise awareness about the critical role human capital plays in a country’s long-term growth and to galvanize the country’s will and resources to accelerate investments in its people as its most important asset.
 
Afghanistan’s overall HCI indicates it fulfills only 39 percent of its full potential, conceptualized as 14 years of quality education and survival until age 60
 
As dire as this may sound, the overall HCI score places Afghanistan just around a place where it is expected given its income level—in fact, slightly higher than an average low-income country.

How are displaced Afghans faring?

Christina Wieser's picture
Afghans represent the world’s largest protracted refugee population
Afghan returnee families are arriving at a UNHCR registration office in Kabul. Photo Credit: Rumi Consultancy/ World Bank

Afghans represent the world’s largest protracted refugee population, and one of the largest to be repatriated to their country of origin in this century.

More than seven million refugees returned to Afghanistan between 2002 and 2017, mainly from Iran and Pakistan.
 
Afghan returnees now make up as much as one-fifth of the country’s estimated population.
 
At the same time, conflict-induced population displacement within Afghanistan has sharply increased due to the escalation of insecurity across the country. 
 
In an already difficult context, large-scale internal displacement and returnees from abroad have strained the delivery of public services and increased competition for scarce economic opportunities for both the displaced and the rest of the population.
 
Afghans are living under difficult economic conditions. More than half of all Afghans lived below the national poverty line in 2016-17, and many more are vulnerable to falling into poverty.

To support struggling communities through scarce humanitarian and development assistance is challenging but necessary.
 
But policymakers struggle with many questions.

Investing in people of South Asia for prosperity and quality of life

Hartwig Schafer's picture
A little girl in Balochistan, Pakistan, who now receives a quality education thanks to World Bank support. 
A little girl in Balochistan, Pakistan, who now receives a quality education thanks to World Bank support. Credit: World Bank 

Human capital – the potential of individuals – is going to be the most important long-term investment any country can make for its people’s future prosperity and quality of life.

Just look around the world: Technology is reshaping every industry and setting new demands for skills in every profession. The frontier for skills is moving faster than ever before.

To meet that challenge and be able to compete in the global economy, countries need to prepare their workforces now for the tremendous challenges and opportunities driven by technological change.  

To that end, the World Bank will launch next week its highly anticipated Human Capital Index to measure countries’ contribution of health and education to the productivity of the next generation of their workers.

The Index will be released on October 11 at the Bank’s Annual Meetings in Bali as part of the Human Capital Project, a global effort led by the Bank to accelerate investments in people for greater equity and economic growth.

No doubt, any country ranking gets high visibility and, sometimes, meets controversy. But I hope it triggers a dialogue about policies to promote investments in people.

To be clear, the important purpose of the Human Capital Index is to measure the distance of each country to the highest standard of complete education and full health—or the “frontier”.

The index, irrespective of whether it is high or low, is not an indication of a country’s current policies or initiatives, but rather reflects where it has emerged over years and decades.

Put simply, the index measures what the productivity of a generation is, compared to what it could be, if they had benefitted from complete education and good health.

The index ranges from 0 to 1 and takes the highest value of 1 only if a child born today can expect to achieve full health (defined as no stunting and survival up to at least age 60) and complete her education potential (defined as 14 years of high-quality school by age 18).


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