HPAS/Allied Mains 2022 Answer Writing Challenge Day 09: Model Answer

Question: The World Bank updated the global poverty lines in September 2022. Why did the World Bank decide to update the International Poverty Line, and why now? (8 marks, 120 words)

Answer: 

Introduction:

• Nobel laureate Amartya Sen defined poverty as a failure to achieve certain minimum capabilities. According to him, poverty is a complex, multifaceted world that requires a clear analysis in all of its many dimensions.
• Although it is often thought of as a lack of material resources, poverty is correlated closely with all aspects of a person’s life: the world’s poor are more likely to be malnourished, they have less access to services like education, electricity, sanitation and healthcare, and they are more vulnerable to conflict and climate change. Understanding poverty is thus fundamental to understanding how societies can progress.

Body

• The national poverty line for a country is typically a monetary threshold below which a person’s minimum basic needs cannot be met, taking into account the country’s economic and social circumstances.
• Poverty lines not only vary widely by country but they are also often revised as countries develop: richer countries typically have higher poverty lines than poorer ones.
• Governments track how many people are living on less than the national poverty line so that they can monitor their development progress.
• The national poverty line is also a central indicator for SDG 1, ending poverty “in all its forms.”
• The World Bank updated the global poverty lines in September 2022.
• The decision, announced in May, follows the release in 2020 of new purchasing power parities (PPPs)—the main data used to convert different currencies into a common, comparable unit and account for price differences across countries.
• As differences in price levels across the world evolve, the global poverty line has to be periodically updated.
• That’s why in September 2022 the international poverty line is being updated from $1.90 to $2.15 per person per day.

REASONS FOR UPDATION:

• The international poverty line is periodically updated to reflect changes in prices across the world.
• The rise in the international poverty line reflects an increase in the costs of basic food, clothing, and shelter needs in low-income countries between 2011 and 2017, relative to the rest of the world.
• In other words, the real value of $2.15 in 2017 prices is the same as $1.90 was in 2011 prices.
• The change in the international poverty line is largely driven by changes in the purchasing power parities of low-income countries between 2011 and 2017 (i.e., the changes in prices in low-income countries between 2011 and 2017 relative to the rest of the world).
• The change in the international poverty line is not driven by real increases in the poverty lines of low-income countries nor the set of countries for which national poverty lines are available.

CONCLUSION

• Ending poverty in all its forms is the first of the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development.
• While progress in eradicating extreme poverty has been incremental and widespread, the persistence of poverty, including extreme poverty remains a major concern in Africa, the least developed countries, small island developing States, in some middle-income countries, and countries in situations of conflict and post-conflict countries.
• In light of these concerns, the world needs to do more to reduce the burden on the vulnerable with a renewed vigour & strength.