While there is a world-wide concern about the growth and spread of poverty, and an acknowledgement of its existence in practically all countries, developed or developing, capitalist or former socialist, there is no unanimity as regards its definition. People regarded poor in a given country may be considered rich when measured by the yardstick of another country. The definition given by ‘outsiders’ may not be acceptable to those being defined; and similarly, self-perception may contrast with outside observation or even statistical indexing. Since poverty is said to be multidimensional, a moneymetric measure of poverty may not be a reliable way of determining poverty, or classifying a person as poor. Moreover, all the poor cannot be classed in a single category. We already referred to a distinction made in the former socialist countries between the ‘capitalist poor’ and the ‘socialist poor’—the latter is regarded as a contradiction in terms, as an aberration. Differentiation is also made between those who are hereditarily poor, or those for whom poverty is an ascribed status, and those who are the ‘new poor’, an achieved status. Again, the new poor do not constitute a single homogeneous group. The political refugees and environmental refugees have only one thing in common—they had to flee from their habitat and seek refuge elsewhere; but the amelioration of their situation would need different strategies. The new poor, in the countries-in-transition, are neither the illiterate nor the continuing unemployed; they are mainly the job-dislocated people, or those who are paid low wages, or their payment of wages/salaries has been deferred, causing severe strain on the family to feed its members.
Difficulties in defining poverty have been aptly summed up in the 1997 UNDP Human Development Report thus:
Concerns with identifying people affected by poverty and the desire to measure it have at times obscured the fact that poverty is too complex to be reduced to a single dimension of human life. It has become common for countries to establish an income-based or consumption-based poverty line. Although income focuses on an important dimension of poverty, it gives only a partial picture of the many ways human Lives can be blighted. Someone can enjoy good health and live quite long but be illiterate and thus cut off from learning, from communication and from interactions with others. Another person may be literate and quite well educated but prone to premature death because of epidemiological characteristics or physical disposition. Yet a third may be excluded from participating in the important decision-making processes affecting her life. The deprivation of none of them can be fully captured by the level of their income (HDR 1997: 15–16).
UNDP Measures for Poverty
Three distinct approaches are recognized by the UNDP for the treatment of poverty.
- The Income Perspective focuses on the level of income of a person or the family, and sets the limits to draw a poverty line.
- The Basic Needs Perspective views poverty from the angle of material deprivation rather than income. A person or family is considered poor if they are not able to provide for minimally acceptable basic needs.
- The Capability Perspective focuses ‘on the functionings that a person can or cannot achieve, given the opportunities she has. Functionings refer to the various valuable things a person can do or be, such as living long, being healthy, being well-nourished, mixing well with others in the community and so on’ (HDR 1997).
The human development approach to poverty adopted in the UNDP HDR ‘draws on each of these perspectives, but draws particularly on the capability perspective’.
The Human Poverty Index (HPI), introduced by UNDP in its Human Development Report for 1997, ‘uses indicators of the most basic dimensions of deprivation: a short life, lack of basic education, and lack of access to public and private resources’ (HDR, 1997: 5).
The variables used are the percentage of people expected to die before age 40, the percentage of adults who are illiterate, and overall economic provisioning in terms of percentage of people without access to health services and safe water and the percentage of under-weight children under five (ibid.: 14).
UNDP has computed this Index for 78 developing countries. It is obvious that computation of this index for the countries-in-transition is not possible, in the absence of adequate data, and also perhaps the non-applicability of these indicators in defining poverty in that region, for the same reasons as advanced for industrialized countries. Since Mongolia is classified as a developing country, its HPI is computed. Mongolia’s HPI value is shown as 15.7 per cent, ranking 16th, implying that about one-sixth of its people suffer from poverty. This ranking is incidentally higher than India (36.7 per cent) or Indonesia (20.8 per cent). At the bottom are seven countries whose HPI exceeds 50 per cent: Niger, Sierra Leone, Burkina Faso, Ethiopia, Mali, Cambodia, and Mozambique (ibid.: 21).
Measures Employed in the Countries-in-Transition
Since the measures of poverty employed in other developing countries are not suited to the situation prevalent in the countries-in-transition, the governments of these countries continue to employ the same standards that were used during the socialist period, of course with some needed modifications. Rather than dividing people in terms of income—which is a measure for identifying relative poverty—the aim of these measures was to find out whether the income earned by the individual, or the family/household, was sufficient to meet the basic needs. It may be recalled that in the socialist regimes, income inequality was minimized to a maximum, and minimum wages were fixed in terms of basic needs to ensure that nobody suffered from privation. With the arrival of income differential due to the introduction of the market economy, the same measure is used to demarcate the poverty line.
We may list some of the concepts employed in poverty research in these countries.
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