Jayati Ghosh

Oct 27 : For some time now, the Millennium Development Goals (MDGs) have been the organising framework for the activities of international organisations and donor agencies. It is probably not very useful any more to quarrel about their relative lack of ambition, their limited aims and absence of recognition of the structural causes of poverty and inequality. All that is well known; even so, simply because of their wide acceptance, the MDGs have become the goal posts for judging at least some development experience around the world.

So, even if these are very limited goals, it is worth examining how far they are actually being met. The most important of all the goals is probably the first one, which makes the grand claim of eradicating extreme hunger and poverty. This includes the following specific targets: halving the proportion of people who are absolutely poor; halving the proportion of people who suffer from hunger; and achieving full and productive employment and decent work for all, including women and young people.

The table provides information on one aspect of the first target, the proportion of working people who survive on less than $1.25 per day in purchasing power parity terms, which is the currently accepted international line for determining poverty.

It is evident that the incidence of poverty among the working population increased (significantly in some regions) in 2008 compared to the previous year, reversing the pattern of decline that was evident over the previous decade. In extreme cases, this has even meant an absolute increase in poverty rates among the employed population over the period 1997 to 2008, such as in Oceania, or no change as in Sub-Saharan Africa. What is particular worrying is that regions with already high poverty incidence seem to have been particularly badly affected in the most recent period, including south Asia whose performance is dominated by India. East Asia (and within China) obviously has the most remarkable success in poverty reduction over the past decade, but even here the crisis seems to have led to a reversal, although less marked than elsewhere. Since unemployment rates have also been rising through the current crisis, the actual impact on poverty is likely to be even greater.

Part of the reason why the recent performance on the poverty front has been so disappointing relates to the inability to meet the second target, of reducing hunger. Perversely, the experience with respect to this target has been worse after it was explicitly formulated than before! In the period after the global food crisis of the 1970s, increased investment in agriculture and various other measures implemented across the developing world to ensure greater self-sufficiency in food led to some progress in reducing chronic hunger by the early 1990s. But according to the Food and Agriculture Organisation (FAO), between 1995-97 and 2004-06, the number of hungry people increased in all developing regions except Latin America and the Caribbean, and even here it has reversed in the most recent period. East and southeast Asia also showed good performance in terms of falling numbers of malnourished people, but such numbers increased quite sharply in south Asia (by 50 million) and Sub-Saharan Africa (by 44 million). The surprise is that the growing prevalence of hunger and food insecurity was associated with relatively high gross domestic product (GDP) growth in several regions, such as India and countries in Latin America. The contrast with east and southeast Asia is a stark one, and points to the role of public policy in ensuring that aggregate income growth translates into better provision of basic needs such as food for the general population.

This reflects changes in policy stance across the developing world that led to a relative neglect of agriculture and domestic food distribution. This is why performance on the nutritional outcome indicators has been relatively poor. In some developing regions, the proportion of underweight children under five years has remained relatively high and shown very little decline over nearly two decades. South Asia is the worst performer, with the proportion of underweight children still around half, declining only marginally from 54 per cent in 1990 to 48 per cent in 2007. In Sub-Saharan Africa the proportion fell from 31 per cent to 28 per cent. East Asia shows the best performance, with the proportion declining from17 to seven per cent, and even in Latin America it fell to six per cent.

While this was the state before the global economic crisis, the crisis obviously made matters much worse. But, as the FAO has noted, the continued increase in the number of undernourished people during both periods of low prices and economic prosperity and the very sharp rises in periods of price spikes and economic downturns shows the weakness of global and national food security systems. The recent combination of higher domestic food prices, lower incomes and unemployment because of the global economic crisis has substantially increased food insecurity. As a consequence, the FAO now estimates that around 1.02 billion people in the world are hungry in 2009, which is the highest number since 1970.

Of course both poverty and hunger are critically affected by employment conditions, which is why the target of providing decent work for all is such an important one. This target too has been relatively under-achieved, and the recent crisis has exacerbated this unfortunate trend. Globally, unemployment rates fell only marginally during the economic boom of the past decade, from 6.3 per cent in 1998 to an estimated six per cent in 2007. In south Asia, southeast Asia and Sub-Saharan Africa, open unemployment rates actually increased over this period, despite reasonably rapid GDP growth. Then the crisis had sharp effects upon employment and has already caused very substantial increases in unemployment.

Clearly this MDG has not had much influence in determining appropriate policies in some regions, but if it does still serve to direct policy attention to this crucial area, it may still have some relevance.

By Jayati Ghosh