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A Richer Understanding of Poverty

The MPI would examine factors besides how much money this Nepalese woman makes picking tea. Photo: Thatcher Cook for Mercy Corps.
The MPI would examine factors besides how much money this Nepalese woman makes picking tea. Photo: Thatcher Cook for Mercy Corps.

What exactly does it mean to be poor? Is it strictly a matter of income, or do other factors count as well, like education and health?

Oxford's new look at poverty may be able to help us better understand which hardships challenge the world's poor. The Multidimensional Poverty Index, or MPI, takes a more holistic approach to measuring poverty than previous poverty indexes, which have focused mainly on income, reports Planet Money. It was designed by the Oxford Poverty and Human Development Initiative (OPHI) in partnership with the United Nations.

The MPI examines three major aspects of poverty: education, health and living standard. More specifically, it considers 10 indicators that affect well-being on a household level, like quality of nutrition, type of cooking fuel, and if a family has a latrine. Ideally, the result is a detailed portrait of the nature and intensity of poverty.

So far the MPI has been applied to populations in 104 developing countries, which are home to nearly 80 percent of the world's poor. Check out OPHI's cool interactive world map to explore the poverty indicators for these countries.

Economists like the World Bank's Martin Ravillion question the MPI's methodology, claiming that it's a mistake to combine so many disparate factors into a single index as though they are equal in value. Ravillion describes the MPI's weakness like comparing "apples and oranges" here on Oxfam's From Poverty to Power blog.

But Sabina Alkire, co-creator of the MPI, insists on the importance of considering multiple aspects so we can understand not just who is poor but "how they are poor." Multidimensional models like the MPI could potentially teach us about correlations between various factors -- for example, does the fact that a child is malnourished relate to whether he or she is educated? OPHI explains how economists, governments and NGOs can apply the new index to their endeavors:

The MPI can be used as an analytical tool to identify the most vulnerable people, show aspects in which they are deprived and help to reveal the interconnections among deprivations. This enables policy makers to target resources and design policies more effectively.

Economic Crisis Fueling Social Unrest

Police in Reykjavik, Iceland after a violent protest turned into a riot on January 20. Photo: <a href="http://www.flickr.com/photos/finnurmalmquist/3215651009/">finnur.malmquist (flickr)</a>
Police in Reykjavik, Iceland after a violent protest turned into a riot on January 20. Photo: finnur.malmquist (flickr)

It’s a lot worse than just about everyone thought. By some estimates, the economic crisis could cost 50 million jobs worldwide. That's a catastrophic number, and even their potential loss is already fueling some discontent and sounding alarms.

Worried about the ripple effects of widespread unemployment, the U.S. Central Intelligence Agency recently added the state of the economy to the agency's list of top security threats. Retired Admiral Dennis Blair, the U.S. Director of National Intelligence, warned that "economic crises increase the risk of regime-threatening instability if they persist over a one-to-two-year period."

On the international stage, United Nations Secretary-General Ban Ki-moon voiced his concern: "If not handled, today’s financial crisis will become tomorrow’s human crisis. Social unrest and political instability will grow, exacerbating all other problems."

Violent flare-ups over the economic recession and resulting unemployment are already occurring all over the globe.

In Pakistan, chronic power outages have forced many textile factories to close down for hours at a time, triggering thousands of angry protesters to set fire to the state-owned power company's office. Government cuts in Lithuania’s social programs prompted protesters to pelt the parliament building with eggs and rocks ; at least 14 people were injured and 84 detained. Chinese police officers are now undergoing special training to deal with expected social unrest over factory closings that have left millions of migrant workers out of a job.

Iceland and Latvia serve as extreme examples of the devastating consequences from the declining state of the worldwide economy: both countries’ respective governments collapsed under the pressure of the economic crisis.

However, security experts are concerned about other forms of collateral damage that extend beyond protests. Bruno Tertrais, a strategic and security expert at the Foundation for Strategic Research in Paris tells Time Magazine that he believes the biggest threat to international security is "the collapse of regimes vital to maintaining international order." Tertrais cites Somalia as an example — a place where, after the collapse of its government, piracy has gained a foothold and severely disrupted shipping routes along the horn of Africa.

Extreme poverty has always posed a threat, especially in the world’s emerging economies. However, the breadth and force of the current global economic crisis poses a threat to all nations, whether rich or poor.

From the Archives

Nobel Peace Prize Awarded to Al Gore and UN Climate Body

Previously filed under: North America, Environment
The 2007 prize was awarded for extraordinary efforts to build awareness about man-made climate change and measures needed to counteract it.

Stories We're Watching

As Growth Slows, India Awakens to Need for Foreign Investment

International Herald Tribune - Wed, 02/08/2012 - 07:19
India’s central bank and economic analysts predict that growth will fall sharply to 7 percent this fiscal year and remain sluggish.

Social responsibility and a new world order

Washington Post - Innovations - Tue, 02/07/2012 - 07:56
Just before the New Year, the London-based Center for Economics and Business Research announced that Brazil had overtaken the United Kingdom as the world’s sixth largest economy. Furthermore, it predicted that by 2020, India and Russia will also have overtaken all the European economic powers.

Aid for trade policy rears its ugly head

The Guardian's Poverty Matters - Mon, 02/06/2012 - 01:41
The UK government's dismay at not being granted the contract for Typhoon fighter jets in India is an indication that its controversial aid for trade policy is still very much alive.

Liberia's battle to put the lights back on

The Guardian's Poverty Matters - Sun, 02/05/2012 - 23:00
Ellen Johnson Sirleaf has set ambitious targets to restore the country's electricity supply. But will it meet them by 2015?

As Africa's consumers rise, so does inequality

Yale Global Online - Fri, 02/03/2012 - 10:17
Kenya struggles to spread the wealth from rapid growth.

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