The eradication of poverty is considered one of the main objectives of several international organizations, if not their essential goal. This is mostly illustrated by the World Bank Group’s motto “Our dream is a world free of poverty”. Looking closer, this is the dream of 189 nations that have pledged to halve poverty and hunger figures by the year 2015. This reduction emerged as the priority in the September 2000 United Nations Millennium Assembly, which classified it as the first of eight Millennium Development Goals.

However, setting such goals while no universal definition or measure of the poverty concept has been reached reflects the complexity of this multidimensional issue. The subject of an expert group meeting held by ESCWA in September, poverty statistics in the ESCWA region were tackled with a review of poverty measurements, data needs and availability of statistics in the region, as well as the use of such statistics as a tool for policy formulation.

Ii Monthly presents a brief look into the diversity of the poverty definition and measurement, reviewing the expert group meeting results and the case of Lebanon in this domain.

Definition

Each year a new dimension is added to the concept of poverty, in what seems like a never-ending improvement of its definition. According to Heba Al-Laithy, professor of Statistics at Cairo University, “a poor person would define himself as not having enough funds so he/she would resort to borrowing or begging”. Hence, poverty is equated to insufficiency of funds. This simple definition has evolved to include other basic needs, such as appropriate living conditions, access to education, health, and other rights.

However, this level of deprivation is relative and cannot be generalized to all individuals. In that sense, two measures of poverty have emerged:
• Absolute poverty, which uses certain indicators to classify whether a household falls under or over a specified poverty line.
• Relative poverty, which is a comparative method using indicators that are deemed more relevant or representative of particular conditions. For example, the poverty threshold in Afghanistan may be different from that in Sweden.

Dividing line: poverty line

Although poverty is characterized by a continuous scale, its measurement is rather discrete. In fact, a thin line, called the poverty line, separates the dichotomy of poor - non-poor. The poverty line is the benchmark against which all needs are measured. Much ambiguity also surrounds the definition of this limit. Whether adopting the first definition of poverty or the second, finding the minimum below which a person is considered poor has proved to be a daunting task.

Measurement

In light of the diverse definitions, the most straightforward measure is associated to the simplest definition and would be based on funds availability.

Income or Expenditure Approach

This is captured by either the income or expenditure levels. However, the expenditure approach is more reliable for several reasons, including the following:

• Income could be saved or borrowed and such ambiguity about its origin is translated into a distorted measure of funds.
• Income determination is difficult, especially in the informal sector and in cases of tax avoidance.
• It could be seasonal and occasional and hence, cannot reflect the real status of the subject. In some cases where the individuals have reservations upon declaring their income or expenditures, consumption is used as a proxy to capture these.

In this regard, it is noteworthy to mention that two measurement levels exists, namely the individual and the household level, with the latter being more popular. However, measuring income or expenditures on the household level can be misleading, as larger households would show more inflated figures.

Moreover, such an approach assumes that income/expenditure is evenly distributed among family members, whereas it differs amongst child, adult and elderly. Finally, recording expenditures at the household level would manifest economies of scale, as the use of some products is common to each household’s members.

• Per Capita GDP
In terms of the poverty line, the income/expenditure approach gives an idea about the level of absolute poverty. In fact, per capita GDP was first used as the separating line and different methods followed. These include taking the average income level of the poorest quintile of the population, or taking one-fifth of the average income.

• $1 per day/ $2 dollars per day
This is the most recent measure adopted by the World Bank to define the separating line. The approach assumes that individuals earning less than $1 per day are ‘severely poor’, while those earning under $2 per day are ‘poor’. These benchmarks are adjusted to purchasing power anchored to a base year, allowing for cross-country comparisons. This approach is mostly criticized for being very general, as it cannot be applied to all individuals without regard to region (rural or urban) and age group.

The Unmet Basic Needs (UBN) Approach

The UBN is the second measure associated with the updated definition of poverty. Basic needs are defined as nutritional and non-nutritional ones, such as access to healthcare, education and proper living conditions. Some of these are measured by the following indicators:

Health

• Life expectancy
• Infant mortality
• Under-5 mortality
• Maternal mortality rate
• Malnutrition:
                 • Wasting, or low weight for height
                 • Stunting, or low height for age
                 • Underweight, or low weight for age
 

Education

• Gross primary enrollment rate
• Net primary enrollment rate
• Female education: the percentage of 6-14 year-old girls in school

Water and Sanitation

• Access to safe water
• Access to adequate sanitation facilities

Other indicators related to security, choice and freedom have also been recently incorporated to perfect these basic needs.

However, the UBN approach has proved to be complicated with regards to measurement. In fact, much uncertainty lies in the weight to be attributed to each factor, let alone the measurement method of factors related to human rights.

The poverty line determination is a very complex issue since it is not obvious where to draw the line on which needs are considered to be basic. Moreover, as mentioned above, it depends on a set of factors such as the age group, the region and the activity level, just to mention a few.

The measures discussed are usually undertaken in the context of household surveys which are conducted at only one point in time. This calls for a more dynamic approach, whereby a panel data would allow analysts to examine the rate at which people emerge from or enter into the poverty pool.

The Lebanese Case

Drawing a poverty profile is based on statistical data regarding income, expenditure or consumption on one hand, and the fulfillment of basic needs and rights on the other. The lack or undependability of such statistics translates into a poor, unreliable poverty profile.

The Lebanese case illustrates this issue, as only two statistical surveys tackling the issue of poverty have been undertaken. In 1997. the Central Administration of Statistics (CAS) undertook a household survey which included data on income, but it is not available to the public. The second one, a joint project conducted by the Ministry of Social Affairs and the United Nations Development Program (UNDP) in the same year, and with limited public access, does not contain any data on income, expenditure or consumption. This defect was corrected for by using a proxy capturing living conditions in a report published under the title of “Mapping of Living Conditions in Lebanon”.

The ESCWA expert group meeting reflected the lack of recent work in the poverty realm on the Lebanese front as no case study was presented. However, such a commentary could have been possible given the available household surveys. Table 1 gives an idea about average household income, according to the survey conducted by the Central Administration for Statistics in 1997.

Impact Assessment Dilemma

The issue of governments and their sensitivity regarding the concept of poverty was mentioned at different levels of the seminar. Also, the concept of good governance was mentioned in relation to accomplishing the goal of poverty reduction. In light of that aim, international organizations and governments compete in blaming the other party in the case of failure. This may be the state of affairs to come if the millennium goal of halving poverty is not reached. In addition, NGOs are in no position to criticize the government as the latter is the source of funding.

In fact, given that policy implementation falls under government jurisdiction, failure in reducing poverty is a responsibility governments do not like to admit to. This situation characterizes a number, if not most, developing countries, where the poor are usually referred to as low-income groups.

A certain level of vigilance could be detected in the seminar, with assurances by the committee that recommendations should not be regarded as provocative to any party. This was especially apparent when tackling the issue of the extent of neutrality in statistical data.

Various measurement methods were reviewed and case studies were presented that led to a series of recommendations and conclusions, including the following:
• Enhancing cooperation between national statistics offices and national organizations responsible for development, monitoring and planning.
• Harmonizing and standardizing the poverty concepts in the region through the establishment of a technical working group.
• Reviewing poverty indicators agreed upon in the workshop on development indicators (Beirut, November 2001)
• Reinforcing the importance of neutrality in statistical work and poverty analysis.
• Improving instruments of data collection in the informal sector and marginal occupations.

The Irony

The expert group meeting was concluded with the participants wondering to whom such recommendations are addressed in the light of the lack of funding. They finally settled that these are directed to anyone who can make it possible, hoping that someone would conclude the deal. The irony lies in this very fact, as the parties potentially responsible for eradicating poverty are themselves “poor,” lacking the sufficient funds to contribute towards this sacred goal.