The Changing Face of Poverty 1998

The conditions of poor people and the extent of poverty in the different regions of the world are changing rapidly in the latter part of the 1990s, according to the progress report from the United Nations Secretary-General on the First United Nations Decade for the Eradication of Poverty (1997-2006).

In East Asia, the largest advance against poverty ever made in human history has been achieved in only a few decades, a bitter setback has been suffered. Between the mid-1960s and the mid-1990s, absolute poverty (of roughly one dollar per day per capita income) in the region fell from 60 per cent to 20 per cent, according to the Secretary-General's report. Success was largely due to cultivation of human resources, the report finds.

But as a result of the recent financial crisis ‹in 1997 alone, there was a net outflow of $100 billion from East Asia, according to statistics released in October 1998 by the UN Department of Economic and Social Affairs (DESA) ‹and of the El Niño­ induced drought, as many as 50 million Indonesians face a return to poverty income levels, the Secretary-General's report projects. At the same time, the cost of living in general and of food in particular is rising. An April 1998 report by the Food and Agriculture Organization of the United Nations found a 50 per cent increase in food prices over a 12-month span. Throughout East Asia, there is rising impoverishment, intensifying social strife, and higher unemployment, and severe strains are being placed on social safety nets which were not constructed with the prospect of rapidly rising impoverishment, the Secretary-General finds.

The poor and the newly poor of East Asia are hardly the only victims of financial turmoil. A report released in September 1998 by the UN Conference on Trade and Development (UNCTAD) estimates that the crisis had cost the world economy $260 billion by mid-1998, even before the sudden collapse of the Russian economy, a run on Latin American equities and currencies, and plummeting stock markets in the United States and Europe. The Secretary-General's poverty eradication report cites the UN's World Economic and Social Survey 1998, which projects a sharp decline in the rate of economic growth of the developing countries overall in the current year, and falling commodity prices. Such trends are sure to severely hamper poverty alleviation efforts in the short term, and are likely to be the harbingers of increased poverty in a number of countries.

The long-term global trend has been one of strong progress in poverty alleviation. The Secretary-General cites 1998 World Bank statistics showing annual average per capita income growth in the developing countries of 1.3 per cent between 1970 and 1996. But even before the financial crisis of 1997-1998, poverty was growing in both absolute and proportional terms in some countries.

In particular, marginalization from the world economy, crippling external debts, low investment in human resources, lack of infrastructure,social strife and political upheaval have taken a heavy toll on the populations of the world's 48 poorest countries in recent years, according to UNCTAD's 1997 report on the least developed countries (LDCs). And difficulties in the transformation from centralized to liberalized economies brought on a significant increase in impoverishment in East Europe and in the republics of the former Soviet Union over the course of the current decade.

Unemployment, perennially high in the developing countries, has intensified in the mid-1990s even in some of the most economically advanced countries. The world economic shock of 1997-1998 is likely to produce considerably higher levels of joblessness. A September 1998 projection by the International Labour Organization (ILO) warns that up to one billion of the world's three-billion-strong workforce will be either without a job or under employed in the year ahead.

Education is one of the keys to the poverty eradication efforts, the Secretary-General's report says. Growth rates of student enrolment generally have been strong in the developing countries, according to a1998 assessment by the UN Educational, Scientific and Cultural Organization. The educational infrastructure in Latin America and the Caribbean is notably strong, the Secretary-General's report finds, and has been improved by decentralization of State education systems.

But in the LDCs, "educational policies have been held hostage to economic and political circumstances", the report says. In addition, the ILO is noting an increase in drop-out rates in primary and secondary schools in Southeast Asia, as families enlist children to provide emergency economic support.

Two other crucial factors are safe water and sanitation. During the UN Decade for Safe Water and Sanitation (1980-1990), an estimated 1.2 billion people gained access to clean drinking water ‹ a monumental achievement. During the early part of the 1990s, an additional 800 million gained access, according to studies by the UN Children's Fund(UNICEF).

But the number of people with adequate sanitary facilities has begun to decline during the mid-1990s, UNICEF finds, and the Secretary-General's report notes that sprawling growth in urban areas of developing countries and pollution in rural areas are threatening progress in access to safe water. To a large degree, there is a vicious cycle at work: poor sanitation is one of the causes of water pollution, and a scarcity of clean water detracts from proper sanitary practices and installation of sanitary facilities.

At a 1997 meeting of the Water Supply and Sanitation Collaborative Council, faltering progress on the twin fronts of sanitation and potable water was noted. The Council found that the dream of making access to clean water and adequate sanitary facilities available to all of humanity, which not many years ago appeared within reach, is not likely to be attained even by the year 2100 if current trends continue.

The Secretary-General's report (A/53/329) was prepared by DESA's Division for Social Policy and Development in response to UN GeneralAssembly resolution 52/193 of 18 December 1997. In addition to surveying progress and setbacks in world poverty eradication efforts, it analyses the relationship between poverty, human rights and development, and reviews the activities of the United Nations system in support of national efforts in the fight against poverty.

Recommendations from the UN Secretary-General's report on the eradication of poverty: * Equitable access to the economic and social benefits of development in both developed and developing countries are key elements for eradicating poverty, and international cooperation is key to ensuring that the benefits of globalization are shared equitably. It is therefore important that there be a well-managed set of international mechanisms to support beneficial financial regulation and stability. * External debt burden continues to be a constraint to many developing countries, especially in Africa and the least developed countries. Debt servicing payments contribute to poverty when public revenue is diverted from productive sector expenditure, such as education, health and physical infrastructure, to debt servicing. The most important recent development in debt relief is the Heavily Indebted Poor Countries (HIPC) initiative, which provides a framework for reducing debt to sustainable levels. * Linking global goals and targets to the issues of financing and assistance in achieving the commitments of the World Summit for Social Development and other conferences is of particular importance. Globally, official development assistance (ODA) has fallen to just 0.25 per cent of gross domestic product in 1996 ‹ the lowest level since foreign aid was institutionalized with the Marshall Plan about 50 years ago. The 20/20 Initiative discussed at the Copenhagen Summit provides one innovative way of increasing resources for basic social services from ODA and national budgets of interested countries. It is imperative for the international community to find new and innovative ways of mobilizing resources for social and economic development. * It is of utmost importance to encourage the establishment of mechanisms to facilitate partnership for poverty eradication and development both at the national and international levels among governments, the private sector and organizations of civil society. The idea of partnership is to unite efforts for social cohesion rather than shifting burdens. * With political will, solidarity and partnership, poverty eradication is an achievable goal.

[Published by the United Nations Department of Public Information - DPI/2013, October 1998]