Steve Feldstein is the Director of Policy for USAID's Bureau of Policy, Planning and Learning
For those who spend their days focusing on international development issues, only occasionally does the full public spotlight shine on their work. On Tuesday night, near the conclusion of his State of the Union address, the President articulated a vision that represented one of the clearest, most direct calls to development action in recent years. He noted that in many parts of the world, people still live on “little more than a dollar a day,” and called for the United States to “join with our allies to eradicate such extreme poverty in the next two decades.” This has caused a flurry of activity as the development community begins to dissect what exactly this means, how it will be done, and who will be affected. In the policy office at USAID, we’ve spent considerable time analyzing this issue and what it would take to eradicate extreme poverty.
First, while eliminating extreme poverty won’t be an easy task, it has moved from a rhetorical aspiration to a concrete possibility. The total number of people currently in extreme poverty (defined as $1.25/day) is 1.2 billion. Projections of how much extreme poverty will exist by 2035 range between 193 million and 660 million. The most optimistic scenarios assume that we can maintain our current rate of poverty reduction, resulting in 3% of the world population (less than 200 million) living in extreme poverty by 2035, a natural rate of equilibrium that most leading economists consider to be an “end” to extreme poverty. Other projections posit that poverty rate reductions in the developing world, especially in Africa, will slow down, in which case it may take us closer to 50 years to reach this threshold. Our own analysis leads us to believe that by focusing our shared political attention and applying the right tools we can collectively lift one billion people out of poverty and reach this 3% level in the next two decades.
We should recognize that we’ve made substantial progress – more than was ever anticipated. The number of people living in extreme poverty continued to rise until around 1981, when it reached 1.94 billion people. From 1981 until around 1993, the number did not change much overall, but after 1993 – for the first time in history – the number began to fall. Over the next fifteen years, historic growth rates were achieved and the extreme poverty figure fell from 1.91 to 1.29 billion, nearly a one-third decrease. It will be challenging to maintain this rate of reduction; as poverty numbers get smaller, the rate of decline may slow as remaining pockets of poverty persist in increasingly difficult environments. But economic growth has been the main determinant of progress in poverty reduction and we believe we are well positioned to help foster such growth.
Finally, it’s important to consider where poverty will reside in the future. By 2015, we will have achieved the first Millennium Development Goal (halving the rate of poverty) in all regions of the world except Sub-Saharan Africa. 85% of global poverty is now concentrated in the following countries: India and China (combined 618 million people or 48% of the total), Nigeria, Bangladesh, DRC, Indonesia, Pakistan, Tanzania, Philippines, and Kenya.
Climate change drives population problems in Uganda. The population lives largely in poverty. And with increasing droughts and heavy, erratic rains destroying farmland and spreading disease, it is important to establish alternative livelihoods for food and create awareness of adaptation for environmental changes. Photo credit: Julie Larsen Maher, Wildlife Conservation Society
We’ve seen miraculous progress in poverty reduction in recent years, due to rapid economic growth in a small number of populous countries (China and India, especially). Countries like China and India are still poor and have huge populations—so large pockets of poverty persist – but most economists believe the strength of their economic growth will allow them to virtually eliminate extreme poverty in the near future. On the other hand, as poverty becomes increasingly diffuse, fragile countries (who struggle with conflict and instability) will be home to an ever greater proportion of the world’s poorest citizens.
So how will we in the global community achieve this goal? Ultimately, this effort will vary by country and region; we will need to assess the specific context and focus our efforts on that particular country’s development needs. In order to reach these diverse and dispersed populations, we will have to employ every tool and instrument at our disposal. This includes continuing to expand and scale efforts to harness science, technology, innovation and knowledge exchange to eliminate extreme poverty. This means rallying the global community and working in partnership with international donors, non-profit and charitable resources, and galvanizing private sector investment towards this effort. It also means leveraging existing efforts, notably the three Presidential Initiatives of Feed the Future, Global Health and Global Climate Change.
As the President said on Tuesday, “We also know that progress in the most impoverished parts of our world enriches us all.” When it comes to defeating the misery and wretchedness of poverty, it is in our nation’s interest and the interest of all nations to seize the mantle of this challenge and carry it forward.
Reducing extreme poverty in developing countries must include strategies to tackle corruption, discourage impunity and improve the general tone of governance. These ills deplete or divert resources which otherwise should have been applied to policies and programs that promote inclusive economic growth. The United States should be a strong voice in condemning corrupt leaders whose time is coincident with declining human well being
Mr Feldstein’s observations, though welcome, are largely rhetorical. What exactly will USAID and other development partners actually invest in? And how much will they invest. I am a disappointed Obama supporter if they cannot put more substance on the table.
Good overall analysis of global poverty! I would like to see further breakdown of the overall poverty reduction by country. It seems to me that China will come out as the top contributor to global poverty reduction. Can the models of economic growth that China has pursued over the last 3 decades at home could be applied in other countries with totally different political and social infrastructure?
If we pursue other less effective models, the rate of growth would be slower, and will take many decades (not two) to achieve President’s poverty reduction goals.
Cheers, Dennis Sharma
Is this part of the “white man`s burden”, to deny Africans freedom while you think that freedom is not a necessity for poor people. Please say no to woyane ethnic fascists, ethnic cleansing and state terrorism in Ethiopia. http://vimeo.com/18242221 http://www.genocidewatch.org/ethiopia.html
Dear Dr. Feldstein,
Since your posting to Devex Newswire mandates email replies instead of posting, I will make this a personal response. First, I am a professor emeritus whose entire professional career has been in international agriculture development, mostly as an USAID contractor. During my career I have developed considerable expertise in smallholder agriculture culminating in writing the text Developing Smallholder Agriculture: a Global Perspective, which should be available in the USAID library. The book then resulted in developing and maintaining the website http://www.smallholderagriculture.com, which I will reference during this message to help keep the body of the message relatively brief.
With that personal introduction I would like to express my appreciation to you and President Obama for you concern with reducing extreme poverty throughout the world including the smallholder farmers I have devoted my life to assisting. I think this is doable, but will require some substantial program changes in how USAID addresses the issues to make certain the projects designed and implemented are fully appreciated by the beneficiaries as measured by how much they rely upon them for the services they offer.
My first interest is to recognize that the $1.25 wage is a starvation, if not genocidal, wage that does not have sufficient purchasing power in most developing countries to meet the 2000 kcal basic metabolism needs let alone provide any energy to undertake any work, particularly the heavy agronomic field work expected of small farmers or the casual labors hired by them. You are more than welcome to check the consumer prices on the website and do some computation as what can be afforded. I have had students try that for years and most conclude you cannot morally expect any physical work from a person with that income.
Of more direct concern would be USAID projects that promote labor intensive innovations instead of drudgery relief innovations. Putting aside your extreme poverty definition, as far as I can estimate most smallholder farmers or rural casual laborers would be fortunate to have a diet of 2000 kcals. Just enough to meet basic metabolism needs. If you are expecting a program beneficiary to undertake a day of diligent manual agriculture labor the diet needs to be in excess of 4000 kcal. Anything less and the work day will be curtailed or become less diligent and the time it takes to complete individual tasks like crop establishment prolonged. This typically will extend up to eight weeks, well beyond the time allocated and for which promoted technology have long since lost their impact. Thus, it is important to emphasizing drudgery relief in future USAID projects. From a policy standpoint projects that are expecting to promote a labor intensive innovation need to require an up-front analysis of labor availability including the dietary energy to fuel that labor. The issue here is basically a 40 year oversight that goes back to the limits of agronomy research and extension. Small plot agronomy research and extension demonstrations to an excellent job of determining the physical potential of an area, but say nothing about the operational resources needed to extend the demonstration across a field, farm or community. It is just assumed these resources are infinitely available. They are not!!
The other major issue that needs to be addressed if USAID is to make major strides in rural poverty alleviation is the over reliance on the cooperative business model to funnel assistance to smallholders including the current buzz word of value chain. I am sorry to say, but this is actually a fairly easily demonstrated major scandal and cover-up that needs to be addressed. While the cooperative business model can be socially desirable as modified from the USA cooperative system, particularly with the credit clubs of managing micro-finance, the model is just too administrative cumbersome and too inconvenient to attract wide spread participation by the farmers. Thus, while it may be relatively easy to recruit farmers to join the program, when it comes time to rely on the project for services they simply and wisely take the vast majority of their business elsewhere. This is then cover-up by some tremendous spin reporting that concentrates on aggregates numbers that look impressive but when divided by the members’ amounts to trivial, or by stopping the accounting of benefits at the cooperative instead of extending the accounting to the farm gate and what individual members actually receive. Thus all the costs associated with operating the cooperative are allocated as a direct financial benefit to the farmers!!!???
My best example is the ACDI/VOCA fair trade coffee project in Ethiopia in which they claimed some 21,900 members and marketed some 181 tons of coffee. That amounts to about 8.3 kg/member for possible net financial benefit of only about $5.00/member and representing only about 5% of the crop. That is not having any real impact on poverty.
The need here is to insist on the M&E personal redefine the criteria on which projects are evaluated to, not just monitor the people presumed participating as a nice easily publicized number, but the basic business parameters that determine how well the members rely on the projects for the services provided and the net financial benefit derived from participating at the farm level, not the project level.
I have considered this issue so serious that with the assistance of Sen. Mark Udall I have referred it to the USAID Office of Inspector General, who has replied that the information I was interested was important but not being addressed.
On both the cooperative and calorie balance projects I have also written to Rep. Mike Coffman, who helped sponsored the bill on USAID Transparency and Accountability, asking that the criteria involved in both issues be mandated in the next USAID appropriations. I don’t know if any of that correspondence was referred to your office. I hope it was.
Those are the most critical issues I see for reaching President Obama’s extreme poverty alleviation goals. Please if you have time review the webpages mentioned below.
Thank you for reviewing this.
Sincerely yours,
Richard Tinsley
Prof. Emeritus
Soil & Crop Sciences
Colorado State University
http://www.smallholderagriculture.com/ .
http://lamar.colostate.edu/~rtinsley/CalorieEnergyBalance.htm .
http://lamar.colostate.edu/~rtinsley/ConsummerPriceComparison.htm .
http://lamar.colostate.edu/~rtinsley/DeceptiveReporting.html .
http://lamar.colostate.edu/~rtinsley/InformationRequest-.htm .
http://lamar.colostate.edu/~rtinsley/InspectorGeneralUSAID.pdf .
http://lamar.colostate.edu/~rtinsley/InspectorGeneralReply.pdf .
http://lamar.colostate.edu/~rtinsley/MikeCoffman.pdf .
website not yet up to running while in constructiom I want be part on the president agenda “feed the future ”
M. Boury
Hello Steven,
I am grateful to be given the opportunity to submit a response to this important development, following President Barack Obama’s initiatives, for urgent action on eradication global poverty, in poor countries around the world.
It is evident that climate change is increasingly having adverse impact on the poor in many parts of the world, one of the most pronounced being sub-Saharan Africa.
I could envision a good degree of success, in achieving a serious reduction of poverty, in many poor countries in Africa, if the following combination of important elements of social justice,peace and development, were enjoined, in planning fully integrated Green Economy, for sustainable Development, in rural communities through out sub-Saharan Africa.
Greening the Economy for sustainable development
for large populations of rural communities, right across Africa, would have a positive impact on poverty, as it would improve the lives of millions of Africa’s poor, in a sustainable way.
As large parts of sub-Saharan Africa are ecologically and environmentally stressed, to a point of seriously threatening food and clean and safe water security,for millions of local peasantry and their families, there is urgent need to invest directly in renewing the landscape,through massive and extensive tree planting, right across the continent, where it is practically possible.
This approach will support efforts to manage and mitigate climate change, while replenishing rivers, which are dried up, forests and general tree cover, which have been destroyed, causing massive soil erosion,silting of rivers,where fish stocks have vanished, while top soil, vital for agricultural production has been devastated.
In addition, Green energy,(Renewable Energy), technologies, supported by other useful innovations in technology and telecommunications and information technology must be deployed and applied as part of Green Economy for sustainable development in Africa.
Investments must also be made into human development of the rural poor, through targeted education and essential skills training and local institutional capacity building, while healthcare facilities and services must be brought up to date and running efficiently.
Although a number of African governments have made some progress in improving democratic institutions and show encouraging signs of democracy, they are still very fragile. Some of these countries are so corrupt that there is no way all MDG goals are to be achieved, by 2015.
In that retrospect,many of us Africans, passionately involved in International Development would argue that donor funds should never be disbursed directly through some of these corrupt African governments. We instead implore the USAID, to begin consultations with more non profit,or charitable organizations, who can prove their mantle of excellence in delivering solutions to address the needs of the poor, in Africa.
Time is of essence. In West Nile sub-region of north western Uganda, where the people had suffered more than a decade of civil wars and political insurgency, more than 2.3 million are exposed to food and clean and safe water insecurity, especially for the long term, as the impact of climate change becomes more severe.
The whole of West Nile sub-region has lost nearly 85% of it’s natural tree cover, leaving the land susceptible to the vagaries of extremes of weather. The is sufficient physical evidence, suggesting that rivers,streams and wetlands are drying up in this sub-region. Rains are rare, erratic and more violent, causing flush floods, thus further destroying the exposed top soils, leading to poor crop fields, in the recent past.
Who knows what is the fate of ground water quantity and quality, in this part of Uganda? With ecosystems fragmented,scarcity of arable land to support productive agriculture, which is the mainstay of the local economy,the future of the people of the sub-region looks increasingly desperate.
I am very passionate about bringing meaningful social change, to the people of this sub-region and Uganda’s rural communities, where all levels of government have long neglected, the most vulnerable in our society.
I want to be fully engaged and to participate, working in close co-operation and partnership with the USAID,to see that justice is done and human dignity and respect is restored to the poor rural communities in the area.
Our focus is Women, girls, children, youth,the challenged/disabled and those living with HIV/AIDS.
We would be very grateful to the US government and USAID, if our mos humble/simple request to present our case to a State Department Committee on social justice, peace and development, would be kindly considered for a further review and or discussions.
On behalf of Project Green Villages Africa Institute, a non profit organization, of which I am a Founder/Executive Director, currently registered and based in Calgary,Alberta Canada, I wish to thank you so much in asking me to have a reply to Mr. Steven’s report.
I look forward to continue further communications on this vital subject of great interest to me and the newly formed non profit organization.
Sincerely,
Augustine Yada.
Founder/Executive Director.
Hi Augustine, thank you for helping us in the effort to do some very important work around the globe!
Please visit our website to learn how to work with USAID: http://www.usaid.gov/work-usaid
Thank you, Augustine. We appreciate you taking the time to tell us about your project. Thank you for joining us to advance development!
Thank you for your comments, Richard. We are interested in learning what our partners in development are doing, and appreciate you sharing these resources with us.