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World Bank: Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one's life.[9]
European Union (EU): The European Union's definition of poverty is significantly different from definitions in other parts of the world, and consequently policy measures introduced to combat poverty in EU countries also differ from measures in other nations. Poverty is measured in relation to the distribution of income in each member country using relative income poverty lines.[10] Relative-income poverty rates in the EU are compiled by the Eurostat, in charge of coordinating, gathering, and disseminating member country statistics using European Union Survey of Income and Living Conditions (EU-SILC) surveys.[10]
Absolute poverty, often synonymous with 'extreme poverty' or 'abject poverty', refers to a set standard which is consistent over time and between countries. This set standard usually refers to \"a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services.\"[11][12][13] Having an income below the poverty line, which is defined as an income needed to purchase basic needs, is also referred to as primary proverty.
The \"dollar a day\" poverty line was first introduced in 1990 as a measure to meet such standards of living. For nations that do not use the US dollar as currency, \"dollar a day\" does not translate to living a day on the equivalent amount of local currency as determined by the exchange rate.[14] Rather, it is determined by the purchasing power parity rate, which would look at how much local currency is needed to buy the same things that a dollar could buy in the United States.[14] Usually, this would translate to having less local currency than if the exchange rate was used as the United States is a relatively more expensive country.[14]
From 1993 through 2005, the World Bank defined absolute poverty as $1.08 a day on such a purchasing power parity basis, after adjusting for inflation to the 1993 US dollar[15] and in 2008, it was updated as $1.25 a day (equivalent to $1.00 a day in 1996 US prices)[16][17] and in 2015, it was updated as living on less than US$1.90 per day,[18] and moderate poverty as less than $2 or $5 a day.[19] Similarly, 'ultra-poverty' is defined by a 2007 report issued by International Food Policy Research Institute as living on less than 54 cents per day.[20] The poverty line threshold of $1.90 per day, as set by the World Bank, is controversial. Each nation has its own threshold for absolute poverty line; in the United States, for example, the absolute poverty line was US$15.15 per day in 2010 (US$22,000 per year for a family of four),[21] while in India it was US$1.0 per day[22] and in China the absolute poverty line was US$0.55 per day, each on PPP basis in 2010.[23] These different poverty lines make data comparison between each nation's official reports qualitatively difficult. Some scholars argue that the World Bank method sets the bar too high, others argue it is too low.
There is disagreement among experts as to what would be considered a realistic poverty rate with one considering it \"an inaccurately measured and arbitrary cut off\".[24] Some contend that a higher poverty line is needed, such as a minimum of $7.40 or even $10 to $15 a day. They argue that these levels would better reflect the cost of basic needs and normal life expectancy.[25]
One estimate places the true scale of poverty much higher than the World Bank, with an estimated 4.3 billion people (59% of the world's population) living with less than $5 a day and unable to meet basic needs adequately.[26] Philip Alston, a UN special rapporteur on extreme poverty and human rights, stated the World Bank's international poverty line of $1.90 a day is fundamentally flawed, and has allowed for \"self congratulatory\" triumphalism in the fight against extreme global poverty, which he asserts is \"completely off track\" and that nearly half of the global population, or 3.4 billion, lives on less than $5.50 a day, and this number has barely moved since 1990.[27] Still others suggest that poverty line misleads as it measures everyone below the poverty line the same, when in reality someone living on $1.20 per day is in a different state of poverty than someone living on $0.20 per day.[22][28][29]
Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income. This is a calculation of the percentage of people whose family household income falls below the Poverty Line. The main poverty line used in the OECD and the European Union is based on \"economic distance\", a level of income set at 60% of the median household income.[42] The United States federal government typically regulates this line to three times the cost of an adequate meal.[43]
Poverty may also be understood as an aspect of unequal social status and inequitable social relationships, experienced as social exclusion, dependency, and diminished capacity to participate, or to develop meaningful connections with other people in society.[47][48][49] Such social exclusion can be minimized through strengthened connections with the mainstream, such as through the provision of relational care to those who are experiencing poverty. The World Bank's \"Voices of the Poor\", based on research with over 20,000 poor people in 23 countries, identifies a range of factors which poor people identify as part of poverty. These include abuse by those in power, dis-empowering institutions, excluded locations, gender relationships, lack of security, limited capabilities, physical limitations, precarious livelihoods, problems in social relationships, weak community organizations and discrimination. Analysis of social aspects of poverty links conditions of scarcity to aspects of the distribution of resources and power in a society and recognizes that poverty may be a function of the diminished \"capability\" of people to live the kinds of lives they value. The social aspects of poverty may include lack of access to information, education, health care, social capital or political power.[50][51] Relational poverty is the idea that societal poverty exists if there is a lack of human relationships. Relational poverty can be the result of a lost contact number, lack of phone ownership, isolation, or deliberate severing of ties with an individual or community. Relational poverty is also understood \"by the social institutions that organize those relationships...poverty is importantly the result of the different terms and conditions on which people are included in social life\"[52]
In 2012 it was estimated that, using a poverty line of $1.25 a day, 1.2 billion people lived in poverty.[67] Given the current economic model, built on GDP, it would take 100 years to bring the world's poorest up to the poverty line of $1.25 a day.[68] UNICEF estimates half the world's children (or 1.1 billion) live in poverty.[69] The World Bank forecasted in 2015 that 702.1 million people were living in extreme poverty, down from 1.75 billion in 1990.[70] Extreme poverty is observed in all parts of the world, including developed economies.[71][72] Of the 2015 population, about 347.1 million people (35.2%) lived in Sub-Saharan Africa and 231.3 million (13.5%) lived in South Asia. According to the World Bank, between 1990 and 2015, the percentage of the world's population living in extreme poverty fell from 37.1% to 9.6%, falling below 10% for the first time.[73] During the 2013 to 2015 period, the World Bank reported that extreme poverty fell from 11% to 10%, however they also noted that the rate of decline had slowed by nearly half from the 25 year average with parts of sub-saharan Africa returning to early 2000 levels.[74][75] The World Bank attributed this to increasing violence following the Arab Spring, population increases in Sub-Saharan Africa, and general African inflationary pressures and economic malaise were the primary drivers for this slow down.[76][77] Many wealthy nations have seen an increase in relative poverty rates ever since the Great Recession, in particular among children from impoverished families who often reside in substandard housing and find educational opportunities out of reach.[78] It has been argued by some academics that the neoliberal policies promoted by global financial institutions such as the IMF and the World Bank are actually exacerbating both inequality and poverty.[79][80]
In Sub-Saharan Africa extreme poverty went up from 41% in 1981 to 46% in 2001,[84] which combined with growing population increased the number of people living in extreme poverty from 231 million to 318 million.[85] Statistics of 2018 shows population living in extreme conditions has declined by more than 1 billion in the last 25 years. As per the report published by the world bank on 19 September 2018 world poverty falls below 750 million.[86]
In the early 1990s some of the transition economies of Central and Eastern Europe and Central Asia experienced a sharp drop in income.[87] The collapse of the Soviet Union resulted in large declines in GDP per capita, of about 30 to 35% between 1990 and the through year of 1998 (when it was at its minimum). As a result, poverty rates tripled,[88] excess mortality increased,[89] and life expectancy declined.[90] Russian President Boris Yeltsin's IMF-backed rapid privatization and austerity policies resulted in unemployment rising to double digits and half the Russian population falling into destitution by the early to mid 1990s.[91] By 1999, during the peak of the poverty crisis, 191 million people were living on less than $5.50 a day.[92] In subsequent years as per capita incomes recovered the poverty rate dropped from 31.4% of the population to 19.6%.[93][94] The average post-communist country had returned to 1989 levels of per-capita GDP by 2005,[95] although as of 2015 some are still far behind that.[96] According to the World Bank in 2014, around 80 million people were still living on less than $5.00 a day.[92] 153554b96e
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