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Behind the historic shift in poverty

A United Nations report on human development signals huge progress in reducing poverty. All the reasons for it may add up to a turnaround in attitudes among the poor about their future.

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    Customers shop in a shoe store in Rio de Janeiro, where the economy is booming with a rising middle class.
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The share of the world’s people living in extreme poverty has fallen by half – from 43 percent in 1990 to 21 percent in 2010, according to a new United Nations report, which also forecasts that by 2030 most of the world’s middle-class people will be living in countries once considered poor.

“Never in history have the living conditions and prospects of so many people changed so dramatically and so fast,” concludes the 2013 Human Development report from the UN Development Program.

And the breadth of this global shift is wide. No country has been left behind in the UN yardstick known as the “human development index,” which measures social gains such as education. 

Is the notion of a permanent “poverty trap” – such as a long-term lack of job opportunities – possibly being put to rest?

For much of history, despair often bred despair among the poor. “The anticipation of future poverty will exacerbate current poverty,” says economist Esther Duflo of the Poverty Action Lab at the Massachusetts Institute of Technology and a new appointee to President Obama’s Global Development Council.

In her field studies, Ms. Duflo often found the poor rejected help simply out of depression about their future. Farmers, for example, might refuse new types of fertilizer even if told it would aid their harvests.

The UN report suggests a possible end to this mental mire, with hope perhaps now breeding on hope.

“Hope operates as a capability,” says Ms. Duflo. “A little bit of hope can allow people to realize their potential.”

The UN report finds countries that emphasize investments in social policies – gender equality, health, and education – do better in the traditional measure of progress, economic growth. And the most successful developing countries have also been more open to world markets, such as welcoming foreign investment. Since 1990, the share of global trade by the so-called global south group of developing countries has grown from a quarter to nearly half. Big countries – China, India, Brazil – have led the way.

While these steps of progress – from free-trade pacts to water wells, from roads to new seed varieties – have helped reduce poverty, the overriding effect seems to be an improvement in the poor’s image of themselves as able to use the assets made available to them.

Optimism alone, however, doesn’t provide certainty of progress. In fact, the UN report also warns that climate change could disrupt recent gains. And resentment over income inequalities could disrupt many societies.

The report is well timed as the world’s attention turns to new Roman Catholic Pope Francis, who is noted for setting an example of siding with the poor by his humble lifestyle as the church’s leader in the capital of Argentina.

Jorge Bergoglio took his papal name from the 13th century friar, Francis of Assisi, having once written of the Catholic saint: “He brought to Christianity an idea of poverty against the luxury, pride, and vanity of the civil and ecclesiastical powers of the time. He changed history.”

Each generation must challenge the frozen attitudes of its time. Based on this latest UN report, perhaps humanity is challenging the notion of poverty as hopelessly inevitable.

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