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GLOBAL POVERTY AND INEQUALITY

GLOBAL POVERTY AND INEQUALITY SPRING 2007 Are less people living in poverty now than they were 10-20 years ago? Is inequality between poor and rich countries decreasing? Are global poverty and inequality better seen in class rather than country specific terms?

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GLOBAL POVERTY AND INEQUALITY

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  1. GLOBAL POVERTY AND INEQUALITY SPRING 2007

  2. Are less people living in poverty now than they were 10-20 years ago? • Is inequality between poor and rich countries decreasing? • Are global poverty and inequality better seen in class rather than country specific terms? • What are the reasons for global poverty and inequality • Are there any ‘solutions’?

  3. Of world’s 6 billion people, 2.8 billion survive on $2/day (about 45 %). 1.2% on $1 (about 20%) • US, Europe and Japan are 100 times richer on average than Ethiopia, Haiti and Nepal • Richest 10% of Americans to poorest 10% of Ethiopians are above 10,000 to 1.

  4. Critics argue rich are getting richer, poor worse off (within and between countries) • Absolute and relative poverty increasing according to critical scholars • Mainstream economists, scholars and politicians, spokespersons of IOs like IMF and World Bank provide upbeat assessments.

  5. David Dollar and Aart Kraay (2002) widely quoted study suggests “ the best evidence shows… that the current wave of globalization, which started around 1980 has actually promoted economic equality and reduced poverty” * Others at WB suggest 1988-1993, world income inequality is very high & increasing.

  6. Measuring Global Poverty • Income Metrics • World Bank only producer of global poverty statistics • April 2004 press release • The number of poor people in developing countries, less than $1/day had dropped from 1.5billion in 1981 to 1.1 billion in 2001. (reduction of poverty from 40 to 21% of total population in developing countries)

  7. $1/day measure Purchasing power parity • Extremely low measure of poverty • Arbitrary, lacks conceptual foundation • Malnutrition/shelter/housing/education – missing from notion of poverty, • Problems with measurement of poverty • Knowledge about numbers of global poor • Bias in current methodology- underestimates incidence of global poverty

  8. CAPABILITY APPROACH • Amartaya Sen • Goods not important in themselves but what they can enable people to do • Social, environmental, personal conversion factors • Basic Needs – doings and beings necessary to functioning

  9. Filipino women, nannies • International care chain • Feed, clothe, shelter, children, families • Remittances to Philippine $7 billion in 1999 • Global capital flows temper effects on global poverty and inequality

  10. Assess based on achieved functioning's • children suffer trauma, emotional hardships, loss of family intimacy, • ------------------------------ • Mainstream economists value income • Non-monetary capabilities, democratic agency, respect, well-being, social cohesion • HDI – Human Development Index

  11. Inequality/Poverty • Distinguishing Inequality/Poverty • Inequality, difference, competition, • Absolute/relative poverty • Poverty as deprivation • Material? Social? Self? • Poverty as scarcity • Poverty and scarcity socially produced • Absolute scarcity of resources may exist in geographical areas • Social (relative) scarcity occurs in context of social (class) relations

  12. The limits of scarcity in discourse on global poverty and inequality • Income inequality highest levels • Within nation • USA 2000 greater than at any time since 1920s • Richest 5% of households receive 6 times more income than poorest 20% households • Paul Krugman – 70% of all income growth in the USA in the 1980s went to richest 1% of all families • WEALTH – richest 1% of households owned 42% of stocks, 55% of all bonds, 44% of all trusts. 71% of all noncorporate business

  13. Inequality between Nations • Nigeria 90.8% lived on less than $2/day • India 86.2%

  14. Magnitude • Magnitude and Scope • Empirical indicators • ---------------------------------------------------------18th and 19th centuries political economists wrote about inequality as the central issue of their times, • Links to development, poverty, and social harmony

  15. Wherever there is great property, there is great inequality. For one very rich man, there must be at least 500 poor, and the affluence of the few supposes the indigence of the many” • ADAM SMITH

  16. Thomas Paine • “It is well known that in England , the great landed estates, now held in descent, were plundered from the quiet inhabitants at the conquest… That they were not acquired by trade, by commerce, or by an reputable employment is certain… “

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