PART 2

Poverty and inequality

Among the many determinants of hunger, poverty is oneof the most important. But like hunger, poverty too ismultifaceted. Not simply a lack of income or consump-tion, poverty includes deprivation in health, education,nutrition, security, empowerment and dignity. Vulnera-bility constitutes a further dimension of poverty. With-out effective coping mechanisms, excessive exposure toshocks – such as drought and sudden price swings – cre-ates the risk of future poverty. All of these dimensionsinteract with and reinforce one another. However, to fa-cilitate international comparison, poverty indicators areusually confined to measuring the proportion of a popu-lation whose income is below a particular threshold.

Whereas poverty metrics tend to be absolute, inequality,on the other hand, looks at the distribution of the met-ric (e.g. income) in a population. For example, a high-inequality country might need twice as much economicgrowth as low-inequality countries tomeet a poverty tar-get.

Furthermore, a major reason that people may not haveaccess to food even when enough is produced is thatthere is no guarantee that a market economy will gener-ate a distribution of income that provides enough for allto purchase the food needed. Fighting hunger also helpsreduce poverty, as undernourishment reduces labourproductivity, increases susceptibility to illness, worsensschool performance, reduces the willingness to under-take risky but more profitable investments and transmitsitself from one generation to the next.

Although in the past three decades, tremendousprogress has been achieved in reducing income povertyin certain parts of the world – notably in China and otherparts of East Asia where poverty incidence dropped from78 to 17 percent – there remains an estimated 1.44 bil-lion people who still live on less than US$1.25 a day (thepresent internationally accepted poverty line). Progressin poverty reduction has been very uneven. Sub-SaharanAfrica, for example, has registered only a marginal de-cline. From a headcount perspective, the number of poorpeople living in the region nearly doubled and its shareof the world’s poor increased from 11 to 27 percent dur-ing this thirty year period.

The monetary poor are particularly vulnerable to risingprices of food, with some groups spending over 80 per-cent of their income to meet sustenance needs. Froma broader perspective, roughly 1.75 billion people inthe 104 countries covered by the United Nations De-velopment Programme’s (UNDP) MPI (MultidimensionalPoverty index), representing one-third of their popula-tion, live inmultidimensional poverty, which is indicatedby acute deprivation in health, education and the stan-dard of living.

Map 27:

No Data < 1 1 − 5 5 − 10 10 − 20 > 20

Poverty gap at $1.25 a day − PPP (%, 2009*)

Source: World Bank

Metalink: P2.HUN.WBK.WDI.POV.P125, p. 169

→ Around 1.4 billion people have less thanUSD 1.25 per day

→ Despite being high, the proportion of theworld’s poor has fallen by half in recentdecades

→ Progress is particularly driven by China

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POVERTY AND INEQUALITY

No Data < 1 1 − 5 5 − 10 10 − 20 > 20

Poverty gap at $1.25 a day − PPP (%, 2009*)

Chart 58: As a share of world population, poverty is decreasing

Poverty headcount ratio at $1.25 a day - PPP (2005)

%ofpopulation

30

35

40

45

50

1985 1990 1995 2000 2005

Source: World Bank

Metalink: P2.HUN.WBK.WDI.POV.AGG, p. 168

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PART 2

According to the agency, over half the world’s multidi-mensionally poor live in South Asia (844 million peo-ple), and more than a quarter live in Africa (458 mil-lion), which also has the highest incidence of multidi-mensional poverty.

In many societies there are groups, especially ruralwomen, youth, indigenous peoples and ethnic minoritiesthat face deeply rooted inequalities. Gender inequalitiesare very pronounced in sub-Saharan Africa, South Asiaand the Near East and North Africa. The agricultural sec-tor is a case in point. Women in agriculture and rural ar-eas have one thing in common across regions: they haveless access than men to productive resources and op-portunities. The gender gap is found in the case of manyassets, inputs and services – land, livestock, labour, edu-cation, extension and financial services, and technology– and it imposes costs on the sector, the broader econ-omy and society, as well as on the women themselves.

Around the world, rising income inequality is the norm:more countries have a higher Gini coefficient now than inthe 1980s. For each country where inequality has fallenin the last 20 to 30 years, it has worsened in more thantwo others. The majority of countries in East Asia haverising income inequality. To an extent, this can be ex-plained by widening disparities between rural and ur-ban populations, owing to rapid industrialization and in-creasing returns to higher levels of schooling. In sub-Saharan Africa, inequality has substantially improved,coinciding with the period of economic growth that be-gan more than a decade ago.

Latin America and the Caribbean, traditionally a regionof high inequality related to unequal land distribution,regressive public spending and uneven access to educa-tion, has made rapid progress in recent decades. This isespecially true of Brazil, Ecuador and Paraguay. Greaterequality is associated with structural economic changesthat have brought women into employment and to af-firmative measures designed to equalize access to edu-cation. The challenge is to create conditions that allowthe poor to escape poverty and, in doing so, ensure thatopportunities are inclusive.

Further reading

• UNDP - Human Development Report 2010. The RealWealth of Nations: Pathways to Human Development(hdr.undp.org/en/reports/global/hdr2010/)

• IFAD Rural Poverty Report. New realities, new chal-lenges, new opportunities for tomorrow’s generation(www.ifad.org/rpr2011/)

• World Bank Poverty Reduction and Equity Group(wwwr.worldbank.org/poverty)

Chart 59: Countries in sub-Saharan Africa have the low-est human development index adjusted for inequality

Inequality-adjusted HDI score (2010)

Index

ZimbabweCongo, Dem. Rep.MozambiqueGuinea-BissauNigerBurundiChadCentral African RepublicLiberiaMaliSierra LeoneBurkina FasoGuineaEthiopiaGambiaHaitiComorosAngolaRwandaNigeriaDjiboutiCôte d’IvoireMalawiSenegalZambiaMauritaniaBeninLesothoTanzania, Utd. Rep.UgandaTogoYemenNepalCameroonMadagascarKenyaSwazilandBangladeshCongoTimor-LestePakistanNamibiaGhanaCambodiaIndiaGuatemalaLao, PDRMicronesia (Federated States of)Bolivia (Plur. State)Morocco

0.0 0.1 0.2 0.3 0.4

Source: UNDP-HDR

Metalink: P2.HUN.UNDP.HDR.POV.HDIi, p. 166

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POVERTY AND INEQUALITY

Map 28: Income inequality prevalent throughout the world

No Data < 30 30 − 40 40 − 45 45 − 50 > 50Gini−score of income distribution, higher scores reflect higher inequality (index, 2009*)

Source: World Bank

Metalink: P2.HUN.WBK.WDI.POV.GINI, p. 168

Map 29: ... and so is gender inequality

No Data < 0.4 0.4 − 0.5 0.5 − 0.6 0.6 − 0.7 > 0.7Gender inequality score, higher scores reflect higher inequality (Index, 2008)

Source: World Bank

Metalink: P2.HUN.UNDP.HDR.POV.GEI, p. 166

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PART 2

Good governance

Former UN Secretary General Kofi Annan once said “goodgovernance is perhaps the single most important factorin eradicating poverty and promoting development”. Ef-forts to promote agricultural development and food se-curity in countries where they are most needed are oftenhindered by a lack of good governance.

Simply put, “governance” means the process of decision-making and how decisions are implemented (or not im-plemented). According the World Bank, the concept ofgood governance consists of many dimensions includingpolitical stability, rule of law, voice and accountability,government effectiveness, regulatory quality and controlof corruption. All of these dimensions matter for agri-culture. Political stability, the absence of violence andthe rule of law are essential preconditions for agricul-tural development. Violent conflicts are often linked tounequal access to land and other natural resources. Inpolitical systems that lack voice and accountability, therural poor face acute difficulties when attempting to in-fluence the political agenda, resulting in low politicalattention in using agriculture for development.

Although governance is difficult to measure, the evi-dence from cross-country analysis is unambiguous: gov-ernance is instrumental for affecting progress towardsdevelopment. For instance, better governance is pos-itively associated with higher investment and growthrates. Government effectiveness, an efficient bureau-cracy and an equitable rule of law are associated with in-creased economic performance, adult literacy and lowerinfant mortality. High levels of corruption, on the otherhand, are linked with poor development prospects.

In developing countries, where agriculture plays an im-portant role in the economy, there is a tendency towardpoor governance. This is of particular concern when thepublic sector is most needed to provide guidance in re-alizing rural development. Moreover, many large donorsconcerned with aid effectiveness employ good gover-nance indicators when they select countries that qualifyfor Official Development Assistance (ODA). This presentsa dilemma for agricultural-based countries, as they areoften less eligible for assistance because of poor perfor-mance in terms of good governance.

With the world increasingly turning its attention to is-sues of governance, there are grounds for optimism to-wards change. However, success cannot be taken forgranted given the often complex and sizeable challengeof improving governance.

Further reading

• World Bank - The Worldwide Governance Indicators(WGI) project (info.worldbank.org/governance/wgi/)

Map 30:

No Data < −1.1 −1.1 − −0.5 −0.4 − 0.3 0.4 − 1.1 > 1.1

Average governance ( −2.5 to 2.5. lowest to highest, 2010)

Source: World Bank

Metalink: P2.HUN.WBK.POV.GOV, p. 167

→ Efforts to combat poverty and food secu-rity are often hindered by a lack of effec-tive governance

→ The lack of effective governance is rife indeveloping countries, and is especiallyacute in Central Asia and Central Africa

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GOOD GOVERNANCE

No Data < −1.1 −1.1 − −0.5 −0.4 − 0.3 0.4 − 1.1 > 1.1

Average governance ( −2.5 to 2.5. lowest to highest, 2010)

Chart 60: Governance, including the degree of voice and accountability, political stabilityand absence of violence and terrorism, government effectiveness, regulatory quality, ruleof law and control of corruption, is poor in food-insecure regions

Average governance (2010)

-2.5to2.5(lowesttohighest)

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

DevelopedEastAsia

L.Amer. &Carib.

SouthAsia

Sub-SAfrica

Source: World Bank

Metalink: P2.HUN.WBK.POV.GOV, p. 167

115