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	Estimates of the cost of ending poverty by Andy Sumner, Arief Anshory Yusuf World Institute for Development Economics Research   In a new UNU-WIDER paper, which provides background for this year’s 2024 OECD Development Cooperation Report, we take a closer look at the end of poverty, what it really means, what it would cost, and how a new approach can improve the tailoring of development cooperation to different contexts.   To end extreme poverty and absolute monetary poverty worldwide by 2030, it would cost about $70 and $325 billion per year. This may sound like a lot but is only 0.1% and 0.6% of the gross national income (GNI) of the OECD’s high-income countries (HICs). This is lower than the commitments made by OECD countries to deliver 0.7% of GNI in development cooperation finance per annum.   If OECD member countries delivered on their commitments—0.7% of GNI or $425 billion in 2023—there would be sufficient global funds, in principle, to end poverty imminently with funds to spare for the logistical costs of cash transfer schemes.   Granted, our estimates are a minimum cost, as there would be other costs—such as administration and logistics expenses–to deliver transfers to households in poverty. Further, in the medium term it is productive employment that is needed and economic development for all countries in the Global South.   Our estimates of the monetary value of transfers needed to end poverty translates to an annual cost of about $100 per year per person living in extreme monetary poverty and slightly more than $180 per year per person living in absolute monetary poverty.   This is the current dollar cost to achieve the major poverty-related global goals and would enable 700 million people to escape conditions of extreme poverty or almost 2 billion to escape absolute poverty (including those in extreme poverty).   That said, ending global poverty is often equated with ending extreme monetary poverty. For example, Sustainable Development Goal (SDG 1) to ‘end poverty in all its forms everywhere’ is measured, in target 1.1, indicator 1.1.1, using extreme monetary poverty.   SDG 1, target 1.2 is potentially even less ambitious in the sense that indicators 1.2.1 and 1.2.2 aim to reduce by 50% poverty measured using the national poverty line and multidimensional poverty (according to national definitions), respectively.   Even then there is a difference between whether ending extreme poverty equates to zero extreme poverty or not. The World Bank’s goal to end extreme poverty differs from the UN SDG target 1.1 in that the World Bank’s goal is to reduce extreme poverty to less than 3% of the global population, which would amount to 250 million people still in extreme poverty in 2030 even if achieved.   Additionally, there are non-monetary dimensions of poverty, which can be assessed individually or aggregated in the global Multidimensional Poverty Index (MPI) developed by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI).   Critiques of the extreme monetary poverty line are widespread and long standing. Specifically, most of the world’s extreme poor do not live in the poorest countries, whose poverty lines are the basis of the $2.15 line. Instead, the majority live in lower-middle income countries (LMICs), where the $3.65 poverty line is the average poverty line of those countries.   Further, it is not clear if having an income of $2.15 per day is sufficient to ensure access to basic health care and basic education and good quality nutrition. In fact, if we consider the number of people in poverty across LICs and MICs, the correlations between headcounts for monetary poverty (ranging from $2.15, every 10 cents, up to $10 per day) and basic education, health and nutrition and access to water and sanitation (using the UNDP/OPHI Multidimensional Poverty Indicator) are stronger at the $3.65 line than at the $2.15 line.   This means a better definition for ending poverty is probably the $3.65 per day line. Ending poverty at this line, while still achievable, would inevitably cost more.   Relatedly, countries that have successfully reduced extreme poverty, and may even end extreme poverty by 2030, have surprisingly high levels of non-monetary poverty.   For example, in a set of Southeast Asian countries with extreme poverty rates at or below 10%, childhood stunting remains stubbornly high. UNSTATS SDG data shows that about 1 in 3 children under five years old are stunted in Indonesia, 1 in 4 in the Philippines and 1 in 5 in Malaysia even though these countries are projected to end extreme monetary poverty by 2030. In short, ending extreme monetary poverty might not be enough to end child stunting.   There is also an issue of hypersensitivity in estimates. Millions of people globally live barely above the $2.15 and $3.65 lines and remain at risk of falling into poverty. This clustering around the poverty lines underlines how hypersensitive estimates of global poverty are to the precise value of the poverty line used.   In fact, the global poverty count increases on average by around 150 million people for every 20 cents added to the value of the line. So, another billion or so people live above the extreme poverty line but under the absolute poverty line of $3.65 a day.   In other words, even if extreme poverty were ended it is plausible that more than a billion people could live in absolute monetary poverty.   It is oft noted that global poverty is increasingly focused within sub-Saharan Africa and in fragile and conflict-affected states (FCAS).   That is true. Extreme poverty accounted for by FCAS is forecasted to continue to increase from the current levels of about 45% of global extreme monetary poverty to approaching 60% in 2030.   There is another aspect that should receive more attention, due to its importance to development cooperation. This is the distribution of global poverty across countries where Overseas Development Assistance (ODA) is financially significant relative to domestic resources and countries where it is not.   This is driven by domestic resources replacing official development assistance (ODA) in significance as economies grow. Beyond the distinction between FCAS and non-FCAS contexts, this is an important differentiation, that between countries where ODA is essential for the government to function well and countries where ODA is now less important.   Ending poverty needs to mean ending more than extreme monetary poverty. Most importantly, if extreme monetary poverty was ended by 2030, a billion or so people would probably live just above that line and still live in absolute poverty.   Second, more tailoring of development cooperation partnerships and the typology can help. Half of global extreme monetary poverty and two thirds of global absolute monetary poverty are accounted for by countries where ODA is low as a share of GNI. Substantial amounts of extreme and absolute poverty remain in countries that are not FCAS or where ODA is less important or even not important at all. An implication for development cooperation is that policy coherence—trade policy, action on tax havens, and so forth—is as important to ending global poverty as ODA is.   Third, the global costs of ending extreme and absolute poverty are not prohibitive, even in fiscally constrained times. Annual ODA spending amounted to $224 billion in 2023, of which $31 billion went to donor countries to address refugee costs, leaving $193 billion allocated to foreign aid. So, the cost of ending extreme monetary poverty annually is about one third of the current annual global ODA spend. And global ODA is equivalent to 60% of the cost of ending absolute poverty.   Of course it is not that simple. Getting the funds to those living in poverty can be incredibly difficult logistically and administratively. However, these estimates do point to the fact that the necessary funds to end global extreme monetary poverty and 60% of absolute monetary poverty are already available.   On the other hand, if OECD member countries delivered on their commitments—0.7% of GNI or $425 billion in 2023—there would be sufficient global funds in principle to end poverty imminently through cash transfer schemes.   * Andy Sumner is Professor of International Development at King’s College London. Arief Anshory Yusuf is Professor of Economics at the Department of Economics, Padjadjaran University, Indonesia.   # The Stockholm International Peace Research Institute (Sipri) reports global military spending of $2440 billion in 2023. The Forbes 2024 Billionaires list reports that the number of worldwide billionaires grew by 141 in the past year, with 2,781 people holding wealth that exceeds $1 billion. These people own combined assets of $14.2 trillion.   http://www.wider.unu.edu/publication/new-estimates-cost-ending-poverty http://www.wider.unu.edu/publication/will-growth-be-enough-end-poverty http://www.wider.unu.edu/publication/just-transitions-and-importance-social-protection-reforms-ambitious-climate-action http://www.wider.unu.edu/publication/are-knowledge-monopolies-driving-global-inequality http://www.wider.unu.edu/publication/development-aid-cuts-will-hit-fragile-countries-hard-could-fuel-violent-conflict http://www.wider.unu.edu/publication/welfare-works-redistribution-way-create-less-violent-less-unequal-societies Visit the related web page
	The Case for Universal Social Protection by Amnesty International   Amnesty International is calling for social security to be made available to everyone worldwide after a series of crises exposed huge gaps in state support and protection systems, leaving hundreds of millions facing hunger or trapped in a cycle of poverty and deprivation.   In a briefing issued, Rising Prices, Growing Protests: The Case for Universal Social Protection, the human rights organization also calls for international debt relief, and urges states to enact tax reforms and clampdown on tax abuse, to free up substantial funding to pay for social protection.   “A combination of crises has revealed how ill-prepared many states are to provide essential help to people. It is shocking that over 4 billion people, or about 55% of the world’s population, have no recourse to even the most basic social protection, despite the right to social security being enshrined since 1948 in the Universal Declaration of Human Rights,” said Agnes Callamard, Amnesty International’s Secretary General.   The briefing shows how rising food prices, climate change, and the economic fallout from the Covid-19 pandemic and Russia’s invasion of Ukraine, are driving a catastrophic humanitarian crisis, and leading to increased social unrest and protests.   It urges states to ensure that social security coverage — such as sickness and disability payments, healthcare provision, pensions for older people, child support, family benefits and income support — is available to every person who may need it.   The briefing shows how the lack of social security in many states has left communities more exposed to sudden economic shocks, the consequences of conflict, climate change, or other upheaval. The fallout from these crises, including widespread hunger, higher unemployment and anger at falling living standards, has motivated protests around the world, which have often been brutally suppressed.   “Universal social protection can address the violations of economic and social rights that are often at the heart of grievances and protest. Instead of viewing peaceful protest as an expression of people’s attempts to claim their rights, authorities have frequently responded to demonstrations with unnecessary or excessive use of force. Peaceful protest is a human right and Amnesty International campaigns to Protect the Protest,” said Agnes Callamard.   The briefing calls for international creditors to reschedule or cancel debts to enable them to better fund social protection. It also highlights that the cost of offering basic social security protection in all low income and low-to-middle income states is estimated at US$440.8 billion a year, according to the International Labour Organization (ILO), an amount that is less than the US$500 billion the Tax Justice Network estimated is lost annually by states to tax havens around the world.   Amnesty International urges states to work together and to use all their resources, as well as reform of their taxation systems to stop evasion and loss of critical revenues, to help ensure funds are available to improve social protection.   “People have been brought to their knees by these crises, and when it comes to fixing the problems in the world, the solutions are rarely simple, but we do know that states should get serious about clamping down on tax abuse,” said Agnes Callamard.   To guarantee the right to social security, Amnesty International supports the establishment of an internationally administered Global Fund for Social Protection, a concept supported by UN Special Rapporteur on Extreme Poverty and Human Rights, the UN Secretary-General and the ILO.   The creation of a fund would offer states technical and financial support to provide social security and would aim to build the capacity of national social protection systems to scale up their responses in times of crisis.   Hunger, poverty and protests   The lack of adequate social security can be catastrophic for the growing numbers of people struggling to afford food.   The World Food Programme (WFP) says 349 million people around the world are in immediate danger from a shortage of food, and 828 million go to bed hungry every night.   Furthermore, according to the Sustainable Development Goals Report 2022, the Covid-19 pandemic has wiped out almost four years of progress in poverty reduction and pushed an additional 93 million people into extreme poverty, living on less than US$ 2.15 a day.   The lack of effective measures to mitigate inflation and shortages has led to a downward spiral in people’s living standards. This has contributed to protests around the world recently, including in Iran, Sierra Leone, and Sri Lanka.   The rising price of food and other essential items has hit people living in low-income countries the hardest, but the increased use of food banks in wealthier countries shows that the cost-of-living and food affordability crisis is widespread.   Russia’s invasion of Ukraine, a major grain producer, has dealt a devastating blow to global food supplies, and pushed the Food and Agriculture Organization’s (FAO) food price index to its highest point since records began in 1990.   Climate change, and spiralling fertilizer prices, have hit agricultural production too. Drought is the greatest single contributor to reduced harvests, according to the FAO.   Social security, tax and debt   Amnesty International is part of a growing coalition of experts and civil society organizations calling on states to progressively deliver universal social protection, and to realize the benefits it will bring.   Agnes Callamard said: “Protecting people against losses due to shocks, from disasters or economic reversals, can be transformational, both for society and the state that provides the support, by reducing social tension and conflict, and promoting recovery. It enables children to stay in education, improves healthcare, reduces poverty and income inequality, and ultimately benefits societies economically.   “We cannot continue to look away as inequality soars, and those struggling are left to suffer. Tax evasion and aggressive tax avoidance by individuals and corporations are depriving states and particularly lower income countries of the resources they need.”   High levels of debt, and the cost of servicing it, mean that heavily indebted states often lack the financial capacity to realize social security aspirations. Low-income countries spend four times more on debt repayments than they do on health service provision, and 12 times more on debt payments than on social protection, according to Oxfam.   According to the IMF’s annual report around 60% of low-income countries are in debt distress or at a high risk of debt distress, and risk defaulting on repayments. Debt cancellation or rescheduling would free up substantial funding in many countries to pay for social protection.   http://www.amnesty.org/en/latest/news/2023/05/global-amnesty-international-calls-for-universal-social-protection-as-overlapping-crises-leave-hundreds-of-millions-facing-disaster/ http://www.socialprotectionfloorscoalition.org/civil-society-call/ http://www.hrw.org/news/2023/05/25/questions-and-answers-right-social-security Visit the related web page
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