Introduction
Last week’s column illustrated that for most of the 2000s Guyana’s poverty theorizing as well as its policy prescriptions have been constructed on the basis of data derived from headcount or headcount–related survey studies.This is captured in the evolution of the United Nations, UN, institution-led Human Development Reports, HDRs, starting in 1990; along with the UN-led 2015-2030 Global Sustainable Development Goals initiatives, SDGs, and their emphases towards a broader multi-dimensional approach.
Both approaches have continued to date; and I shall review this situation in today’s column.
IDB Recent Headcount Measures
In March 2020 the Inter-American Development Bank, IDB, reported that Guyana’s poverty rate had declined from 43.2 percent in 1992 to 36.1 percent in 2006, the last year of data available from household surveys. Further, the IDB noted that more recent data gathered in the Guyana Labour Force Survey, suggested 41.2 percent in 2017 lived in poverty based on a poverty line of US$5.50 a day. This led the IDB to conclude that poverty rates in Guyana exceeded the Latin American (LA) and the IDB’s Country Department Caribbean regional averages of 26.54 percent and 25.23 percent respectively.
Of special note, the IDB also expressed deep concern that the poverty data seemed to capture large disparities within Guyana, Thus the IDB posited that based on the 2012 Census, about 89 percent of the population lives in the administrative regions along the coast, which includes the capital city, Georgetown, with approximately 26 percent of the population. The remaining 11 percent of the population resides in the rural interior, also known as the hinterland.
Based on the above it is a matter of concern that the urban coastal areas have generally had lower levels of poverty, that is ranging between 27 percent in 1992 and 35 percent in 2017, while rural coastal areas have similar levels of poverty to the national levels.
Additionally, the IDB observed that the rural interior areas recorded poverty rates greater than 70 percent in 1992 and 2006 and 55 percent in 2017. The data is clearly indicative of regional and ethnic disparities, as about two-thirds of the population in hinterland areas is indigenous.
World Bank Headcount Measure
While the World Bank treats poverty as “lacking resources to provide the necessities of life [food, clean water, shelter and clothing] …this treatment can be broadly extended to include access to health care, education and even transportation”. For cases of “extreme poverty” the Bank developed the International Poverty Line. And, as of 2015, set the definition of extreme poverty as those who live on less than US$1.90 per day. (Those living on between $1.90-$3.10 per day are classified as the “moderate poor.”) This number is based on the monetary value of a person’s consumption rather than income alone.
In September 2022, the World Bank updated the line using new purchasing power parities (PPPs). The $2.15 per person per day extreme poverty line replaces the $1.90 poverty line, based on 2017 PPP. At this measure Guyana’s headcount measure was 48 percent.…
As a rule, the World Bank labels absolute poverty as referring to those whose incomes fall below a line set by a given country. Below this line people are unable to meet their basic needs for food, water and shelter. They also have no access to social services such as health care, education and utilities. However, relative poverty refers to people whose total incomes are less than a certain percentage—typically 50 percent—of the country’s median income. Because the median income can vary as a result of economic growth, the line for relative poverty can change. When poverty is defined to include access to services and security critical to well-being—and not just income and consumption the global poverty rate increases by 50 percent.
Is poverty only about money?
The World Bank has raised the useful query captured in this Section header: Is poverty only about money? And the answer given is no. The truth be told, the common perception of poverty considers income and consumption alone. However, there are significant approaches that say other factors must be included. This is because money doesn’t tell the whole story. (Typically, when the poor describe their poverty they do so in ways that go beyond simply not having enough money.) As we shall observe going forward measures of poverty like the United Nations Development Program, UNDP, Multidimensional Poverty Index, MPI, along with its Human Development Index (HDI) pursue this type of approach
Conclusion
It is apt for readers to note that, the World Bank on its website presently asserts “Guyana poverty rate has declined over the past decade; from about 60.9 percent in 2006 to 48.4 percent in 2019.While recent data are not yet available, but rising economic activity after 2020 as a guide this may have resulted in increased employment leading to a reduction in poverty The UNDP, which is the leading institutional exponent on poverty claims though that the population living below U.S. equivalent of $5.5 a day, is about 39 percent
Next week I shall introduce what the UNDP’s multidimensional data reveal about poverty in Guyana today.
