Breaking Down MDG1: Halving Extreme Poverty

By Morgan Snow

The UN recently released its final Millennium Development Goals report, revealing how much (or in some cases, little) progress has been made fighting poverty over the duration of the MDG program. The first target, to halve extreme poverty (defined as the proportion of people who live on an income below $1.25 a day) by 2015, has already been met. Although this goal has been met globally, some regions have not reduced extreme poverty at the same level, which you can glean from newly released numbers from the World Bank, below.

The poverty gap ratio at $1.25 a day (2005 PPP) measures the magnitude of poverty. Expressed as a percentage of the poverty line, it is the result of multiplying the proportion of people who live below the poverty line by the difference between the poverty line and the average income of the population living under the poverty line. High-income economies, as defined by the World Bank, are excluded. Estimates by the World Bank, April 2013.

The poverty gap ratio at $1.25 a day (2005 PPP) measures the magnitude of poverty. Expressed as a percentage of the poverty line, it is the result of multiplying the proportion of people who live below the poverty line by the difference between the poverty line and the average income of the population living under the poverty line. High-income economies, as defined by the World Bank, are excluded. Estimates by the World Bank, April 2013.

The two available indicators for this target, the headcount ratio and the poverty gap ratio, reveal similar trends in different ways. The headcount ratio measures the proportion of the population below the poverty line, whereas the poverty gap ratio measures the magnitude of poverty. Clearly, sub-Saharan Africa, the Caribbean, and Oceania did not reach the goal by either measure. And while South Asia succeeded at reducing the magnitude of poverty by more than half, the proportion of the population below the poverty line is still relatively high—largely due to India, it seems.

So while it’s important to celebrate the overall victory, the SDG conversation must include a focus on disaggregation of data to focus on countries that did not quite make the cut in the first round of MDGs.

Morgan Snow is a researcher for the Project on U.S. Leadership in Development at CSIS 

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