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Why 300 million more people are suddenly poor

A United Nations index takes a multidimensional look at poverty and finds spikes from 'rising tiger' India to Hungary.

By Jina MooreCorrespondent / November 17, 2010

A girl collects water from a pond in the drought affected region of Moyale, Ethiopia in June 2009. A UN index has doubled the number of poor in Ethiopia, where 39 percent of people live on less than $1.25 a day.

Irada Humbatova/Reuters

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Kigali, Rwanda

In November, 300 million more people around the world were suddenly poor – on paper, at least. The latest numbers on poverty from the United Nations, released Nov. 4, include a new measurement for poverty and reveal some surprises.

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The Multidimensional Poverty Index (MPI) raises the number of poor by 21 percent, to more than 1.7 billion. According to the MPI, sub-Saharan Africa is still home to the greatest proportion of the world's poor, but more than half of the total number of poor lives in South Asia.

These numbers, and the new index that produced them, are part of the UN's annual Human Development Index (HDI), a statistical touchstone. It covers everything from the number of women who die in childbirth to how many people have Internet access and can sway decisions on US policy, influence where nonprofits spend money, and help determine where donors give.

For years, the HDI has set the standard for just how little a person has to live on to be considered poor. The answer? $1.25. But some researchers have long said income alone doesn't define poverty.

"There are some things money can't buy," says Sabina Alkire, cocreator of the index and director of the Oxford Poverty and Human Development Initiative, which launched the index in collaboration with the UN. "It might not buy electricity; it might not buy a public health system, or an education system."

Ms. Alkire's index looks at poverty more experientially. It uses existing survey data and categorizes households as poor if they lack three or more of the 10 poverty indicators, which are spread across health, education, and basic standards of living. "For the first time ever, it measures poverty by looking at the disadvantages poor people experience at the same time," she says.

Examining more than income changes the equation. It doubles the poor in Ethiopia, where 39 percent of people live on less than $1.25 a day. But 90 percent are "multidimensionally poor," or lacking at least three of the 10 indicators.

"The point is you can have rapid progress on the income poverty side without commensurate progress on other side," says Jeni Klugman, director and lead author of the Human Development Report, where the index debuted.

That's true even in the developed world. Hungary is categorized as a "high human development" country, and fewer than 2 percent of its people live on less than $1.25 a day. But under the MPI, that number triples.

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