chapter  4
2 Pages

The Income Poverty MDG: Progress and Projections by the International Poverty Line

In spite of the discussion above, it is worth noting that progress on MDG 1a has been significant in some ways-most importantly, it has probably been met (Chen and Ravallion 2012a, 2012b). However, some have expressed doubts about whether MDG 1a (income poverty) has been met, because of the limited progress on MDG 1c (hunger). They point to the “poverty-hunger” disconnect, whereby the headline statistics on hunger have fallen very little over the same time period; this raises questions about the achievement of income poverty, given that the measurement of income poverty is largely based on food expenditures (Pogge 2013). The incidence of extreme income poverty at $1.25-the central indicator for MDG 1-has fallen

from 43% in 1990 to 22% in 2008 and is projected to fall to 16% in 2015-in short, on these estimates the target has (already) been met (Chen and Ravallion 2012a, 2012b; World Bank 2012a, 2012b). However, as discussed, the international poverty measure remains contested (see Fischer 2010), notably for its use of PPPs (see Deaton 2010, 2011), as does whether the target of halving world poverty has really been met due to the fact that the target will be met largely due to China (as is recognized by Chen and Ravallion 2012a, 2012b). Indeed, if China is removed from the world poverty data then the total number of people under $1.25 has barely changed since 1990 and the number of people under the $2 poverty line has risen slightly, which is increasingly recognized in official estimates by the World Bank who present the data with and without China. If one accepts, for a moment, the data, at a global level, not only has the target been met, but progress

was also faster in the “MDG period” of 2003-2008 versus the 1990-2001/02 period (Fukuda-Parr, Greenstein, and Stewart 2012).4 However, country-level progress towards MDG 1a-arguably never intended to be applied to every country (see Vandemoortele 2011)—is less convincing. The percentage of developing countries making progress by various assessments is detailed in Table 1. Only one-half of all developing countries are making faster progress, and indeed only one-half of all countries are “on track” to halve income poverty by 2015. One might reflect on the earlier comment as to how much resonance the IPL had at national level. If a new IPL-based poverty goal is to be set for the future, estimated projections based on current

trends and under a set of growth and inequality assumptions reveal both that an eradication of extreme poverty is a plausible goal, and that positive and significant changes in within-country distribution would be necessary to achieve that “end” of extreme poverty.