Background
Last week, the World Bank released its latest report on global poverty. It stated that “economic upheavals brought on by Covid-19 and later the war in Ukraine” had produced “an outright reversal” in poverty reduction across the planet.
The pace of poverty reduction had been slowing down anyway since 2015, due to a slowdown in growth rates but the pandemic and war have caused an outright reversal. So much so that the “world is unlikely to meet the goal of ending extreme poverty by 2030”.
What is extreme poverty?
The World Bank (WB) defines extreme poverty by particular consumption level. This is called the poverty line and it is pegged at US$2.15. In other words, anyone living on less than $2.15 a day is considered to be living in extreme poverty.
Anyone living on less than $2.15 a day is considered to be living in extreme poverty.
About 648 million people globally were in this situation in 2019.
But if you did a mental calculation — multiplying 2.15 by the rupee’s current market exchange rate with the US dollar (around 82) — and arrived at Rs 176 a day as the Indian equivalent of the international poverty line, you’d be wrong.
That’s because this $2.15 level is based on purchasing power parity (PPP). Simply put, the PPP equivalent of $2.15 is the number of Indian rupees an Indian would need to buy the same basket of goods in India that an American can buy with $2.15 in the US.
That equivalent in India is Rs 46, not Rs 176.
This difference happens because the price of the same goods is different in different countries and it is quite likely that a dollar in India buys far more of the same commodity (say, an egg or banana) or service (say, a haircut) that it buys in the US.
So, the international poverty line of $2.15 implies that any Indian who spends less than Rs 46 a day — in total — is considered to be living in extreme poverty.
Try to recall the last time when your daily expenditure was that low and you’d understand why this is called the poverty line for abject or extreme poverty.
This international poverty line is revised periodically to account for rising prices of goods and services over time.
The very first international poverty line — a dollar a day — was constructed in 1990 using the 1985 prices.
It was then raised to $1.08 a day in 1993, $1.25 a day in 2005 and $1.90 a day in 2011.
The $2.15 one is based on 2017 prices. (International Poverty Line)
What has the World Bank stated about India’s poverty levels?
According to the WB, India is the country with the highest number of poor people
According to the report, the number of people living in abject poverty increased by 56 million (5.6 crore) in 2020.
What’s worse, when the World Bank used the data from the Centre for Monitoring Indian Economy (CMIE), it found that the number of people living in abject poverty increased by 56 million (5.6 crore) in 2020.
In other words, according to this estimate, 8 out of every 10 people in the world who were pushed into poverty during Covid were in India.
India’s problem, however, isn’t just that it has the largest number of people in the world living below the extreme poverty line.
According to the Bank, close to 600 million Indians survive at less than $3.65 (Rs 84 -Calculated through PPP) a day level of expenditure.
Now many may simply wish to deny or dispute these figures, partly because they use CMIE data. But the only reason why the World Bank was forced to use data from CMIE is that there are no official estimates of poverty available since 2011. “The government decided not to release the 2017/18 NSS round because of concerns about data quality,”.
Who can India learn from?
Over the past week, there has been some acknowledgement that India faces three rather acute and growing problems: Widespread unemployment, widening inequalities and deepening poverty.
They require actual policy solutions. Without the right policies, India’s demographic dividend is looking more like a demographic bomb.
But there is one country — China — which is not only comparable to India in terms of the population size but is also globally recognised to have alleviated poverty at historically unprecedented speed and scale.
Perhaps, understanding what China did may provide some clues to Indian policymakers.
What did China achieve?
Intending to provide lessons to other developing countries, the World Bank and China’s Ministry of Finance undertook a study in 2019 to understand what China achieved and how it did it. This study was finally published earlier this year.
The World Bank found that between 1978 and 2019, China’s poverty headcount dropped from 770 million to 5.5 million people.
In other words, China lifted 765 million (76.5 crore) people from extreme poverty in the past four decades.
It means, on average, every year China pulled 19 million (1.9 crore) poor people out of extreme poverty for the past 40 years.
In doing so, China accounted for almost 75 per cent of the global reduction in the number of people living in extreme poverty during this period.
In 2021, China declared that it has eradicated extreme poverty according to the national poverty threshold, lifting 765 million people out of poverty since 1978, and that it has built a “moderately prosperous society in all respects.”
Decades of progress in China are also reflected in substantial improvements in other measures of well-being.
Life expectancy at birth went from 66 years in 1978 to 77 years by 2019, and the infant mortality rate dropped from 52 in 1978 to 6.8 per thousand infants in 2019.
Education achievements in China were also relatively higher than in its peers before 1978 and progressed further since, as the country universalised basic and secondary education.
Taken together, improvements in health, education, and income over the four decades are reflected in China’s rising position in the Human Development Index from 106 (out of 144 countries) in 1990 to 85 (out of 189 countries) in 2019, and the narrowing of the gaps with other large developing countries.
How did China do it?
The main conclusion is that China’s poverty reduction success relied mainly on two pillars.
The first pillar was rapid economic growth, supported by broad-based economic transformation, which provided new economic opportunities for the poor and raised average incomes
The report states that China’s poverty reduction story is primarily a growth story. But rapid and sustained economic growth was accompanied by a broad-based economic transformation.
In other words, reforms began in the agricultural sector, where poor people could benefit directly from improvements in productivity associated with the introduction of market incentives.
“The development of low-skilled, labor-intensive industries provided a source of employment for workers released from agriculture.
Urbanization helped migrants take advantage of the new opportunities in the cities, and migrant transfers boosted incomes of their relatives remaining in the villages.
Public investment in infrastructure improved living conditions in rural areas but also connected them with urban and export markets,” states the report.
A crucial point to note here from India’s perspective is that reforms were gradual. Reforms in all these areas were incremental, which may have helped businesses and the population adjust to the rapid pace of change.
“The gradualism adopted by China in reforming the economy (associated with Deng Xiaoping saying ‘Crossing the river by feeling the stones’) was reflected in the incremental approach toward the liberalization of agricultural and industrial product markets, the managed approach toward migration and urbanization, and a much larger role for the state in ownership of key assets and the allocation of resources than in other market economies,” finds the World Bank.
The second pillar was government policies to alleviate persistent poverty, which initially targeted areas disadvantaged by geography and a lack of economic opportunities, but subsequently focused on poor households, irrespective of their location.
“Broad economic reforms were complemented by strategies, policies, and programs directly targeted at poverty alleviation. China’s poverty alleviation strategy can be characterized as ‘development oriented,’ implying a focus on creating economic opportunities as a means to escape poverty. It evolved from an area-based approach, targeting poor counties and villages as a whole, to a set of interventions targeted at poor households,” states the report.
A component of these policies were social protection policies for poor households and they included specific programs in social assistance, social insurance, social welfare, and other targeted social policies
Two other factors that mattered heavily
“China’s success benefited from effective governance, which was key to the successful implementation of the growth strategy as well as the evolving set of targeted poverty reduction policies,” states the World Bank. This meant that the institutional arrangements China developed to deliver outcomes were shaped by its specific context.
For instance, China’s size necessitated decentralized implementation arrangements, with significant scope for local experimentation, and a high degree of competition among local governments.
Of course, to achieve coherence, local experimentation was subject to strong monitoring and accountability between levels of government.
China also benefited from some favorable initial conditions at the time of opening up, such as a relatively high level of human capital, which is widely recognized as a critical input for the population to rapidly benefit from new economic opportunities once market reforms set in.
The World Bank finds that for a country with a level of per capita income among the lowest in the world, China’s population in 1978 had relatively high human capital endowments. In 1949, only 7 percent of those ages 15–64 had completed primary school in China.
“Massive investment in education and expansion of health care since the 1950s resulted in real achievements: in 1978, the infant mortality rate was 52 per 1,000 births, less than half of the average in China’s income group; life expectancy at birth at 66 years far exceeded that of other developing countries; the primary school enrollment rate was 96 per cent; and the secondary school enrollment rate was 49.9 per cent,” it states.
Do you think India can replicate the Chinese success in reducing poverty? If so, are we on track? Are we doing enough?
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.
On March 31, the World Economic Forum (WEF) released its annual Gender Gap Report 2021. The Global Gender Gap report is an annual report released by the WEF. The gender gap is the difference between women and men as reflected in social, political, intellectual, cultural, or economic attainments or attitudes. The gap between men and women across health, education, politics, and economics widened for the first time since records began in 2006.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]No need to remember all the data, only pick out few important ones to use in your answers.
The Global gender gap index aims to measure this gap in four key areas : health, education, economics, and politics. It surveys economies to measure gender disparity by collating and analyzing data that fall under four indices : economic participation and opportunity, educational attainment, health and survival, and political empowerment.
The 2021 Global Gender Gap Index benchmarks 156 countries on their progress towards gender parity. The index aims to serve as a compass to track progress on relative gaps between women and men in health, education, economy, and politics.
Although no country has achieved full gender parity, the top two countries (Iceland and Finland) have closed at least 85% of their gap, and the remaining seven countries (Lithuania, Namibia, New Zealand, Norway, Sweden, Rwanda, and Ireland) have closed at least 80% of their gap. Geographically, the global top 10 continues to be dominated by Nordic countries, with —Iceland, Norway, Finland, and Sweden—in the top five.
The top 10 is completed by one country from Asia Pacific (New Zealand 4th), two Sub-Saharan countries (Namibia, 6th and Rwanda, 7th, one country from Eastern Europe (the new entrant to the top 10, Lithuania, 8th), and another two Western European countries (Ireland, 9th, and Switzerland, 10th, another country in the top-10 for the first time).There is a relatively equitable distribution of available income, resources, and opportunities for men and women in these countries. The tremendous gender gaps are identified primarily in the Middle East, Africa, and South Asia.
Here, we can discuss the overall global gender gap scores across the index’s four main components : Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment.
The indicators of the four main components are
(1) Economic Participation and Opportunity:
o Labour force participation rate,
o wage equality for similar work,
o estimated earned income,
o Legislators, senior officials, and managers,
o Professional and technical workers.
(2) Educational Attainment:
o Literacy rate (%)
o Enrollment in primary education (%)
o Enrollment in secondary education (%)
o Enrollment in tertiary education (%).
(3) Health and Survival:
o Sex ratio at birth (%)
o Healthy life expectancy (years).
(4) Political Empowerment:
o Women in Parliament (%)
o Women in Ministerial positions (%)
o Years with a female head of State (last 50 years)
o The share of tenure years.
The objective is to shed light on which factors are driving the overall average decline in the global gender gap score. The analysis results show that this year’s decline is mainly caused by a reversal in performance on the Political Empowerment gap.
Global Trends and Outcomes:
– Globally, this year, i.e., 2021, the average distance completed to gender parity gap is 68% (This means that the remaining gender gap to close stands at 32%) a step back compared to 2020 (-0.6 percentage points). These figures are mainly driven by a decline in the performance of large countries. On its current trajectory, it will now take 135.6 years to close the gender gap worldwide.
– The gender gap in Political Empowerment remains the largest of the four gaps tracked, with only 22% closed to date, having further widened since the 2020 edition of the report by 2.4 percentage points. Across the 156 countries covered by the index, women represent only 26.1% of some 35,500 Parliament seats and 22.6% of over 3,400 Ministers worldwide. In 81 countries, there has never been a woman head of State as of January 15, 2021. At the current rate of progress, the World Economic Forum estimates that it will take 145.5 years to attain gender parity in politics.
– The gender gap in Economic Participation and Opportunity remains the second-largest of the four key gaps tracked by the index. According to this year’s index results, 58% of this gap has been closed so far. The gap has seen marginal improvement since the 2020 edition of the report, and as a result, we estimate that it will take another 267.6 years to close.
– Gender gaps in Educational Attainment and Health and Survival are nearly closed. In Educational Attainment, 95% of this gender gap has been closed globally, with 37 countries already attaining gender parity. However, the ‘last mile’ of progress is proceeding slowly. The index estimates that it will take another 14.2 years to close this gap on its current trajectory completely.
In Health and Survival, 96% of this gender gap has been closed, registering a marginal decline since last year (not due to COVID-19), and the time to close this gap remains undefined. For both education and health, while progress is higher than economy and politics in the global data, there are important future implications of disruptions due to the pandemic and continued variations in quality across income, geography, race, and ethnicity.
India-Specific Findings:
India had slipped 28 spots to rank 140 out of the 156 countries covered. The pandemic causing a disproportionate impact on women jeopardizes rolling back the little progress made in the last decades-forcing more women to drop off the workforce and leaving them vulnerable to domestic violence.
India’s poor performance on the Global Gender Gap report card hints at a serious wake-up call and learning lessons from the Nordic region for the Government and policy makers.
Within the 156 countries covered, women hold only 26 percent of Parliamentary seats and 22 percent of Ministerial positions. India, in some ways, reflects this widening gap, where the number of Ministers declined from 23.1 percent in 2019 to 9.1 percent in 2021. The number of women in Parliament stands low at 14.4 percent. In India, the gender gap has widened to 62.5 %, down from 66.8% the previous year.
It is mainly due to women’s inadequate representation in politics, technical and leadership roles, a decrease in women’s labor force participation rate, poor healthcare, lagging female to male literacy ratio, and income inequality.
The gap is the widest on the political empowerment dimension, with economic participation and opportunity being next in line. However, the gap on educational attainment and health and survival has been practically bridged.
India is the third-worst performer among South Asian countries, with Pakistan and Afghanistan trailing and Bangladesh being at the top. The report states that the country fared the worst in political empowerment, regressing from 23.9% to 9.1%.
Its ranking on the health and survival dimension is among the five worst performers. The economic participation and opportunity gap saw a decline of 3% compared to 2020, while India’s educational attainment front is in the 114th position.
India has deteriorated to 51st place from 18th place in 2020 on political empowerment. Still, it has slipped to 155th position from 150th position in 2020 on health and survival, 151st place in economic participation and opportunity from 149th place, and 114th place for educational attainment from 112th.
In 2020 reports, among the 153 countries studied, India is the only country where the economic gender gap of 64.6% is larger than the political gender gap of 58.9%. In 2021 report, among the 156 countries, the economic gender gap of India is 67.4%, 3.8% gender gap in education, 6.3% gap in health and survival, and 72.4% gender gap in political empowerment. In health and survival, the gender gap of the sex ratio at birth is above 9.1%, and healthy life expectancy is almost the same.
Discrimination against women has also been reflected in Health and Survival subindex statistics. With 93.7% of this gap closed to date, India ranks among the bottom five countries in this subindex. The wide sex ratio at birth gaps is due to the high incidence of gender-based sex-selective practices. Besides, more than one in four women has faced intimate violence in her lifetime.The gender gap in the literacy rate is above 20.1%.
Yet, gender gaps persist in literacy : one-third of women are illiterate (34.2%) than 17.6% of men. In political empowerment, globally, women in Parliament is at 128th position and gender gap of 83.2%, and 90% gap in a Ministerial position. The gap in wages equality for similar work is above 51.8%. On health and survival, four large countries Pakistan, India, Vietnam, and China, fare poorly, with millions of women there not getting the same access to health as men.
The pandemic has only slowed down in its tracks the progress India was making towards achieving gender parity. The country urgently needs to focus on “health and survival,” which points towards a skewed sex ratio because of the high incidence of gender-based sex-selective practices and women’s economic participation. Women’s labour force participation rate and the share of women in technical roles declined in 2020, reducing the estimated earned income of women, one-fifth of men.
Learning from the Nordic region, noteworthy participation of women in politics, institutions, and public life is the catalyst for transformational change. Women need to be equal participants in the labour force to pioneer the societal changes the world needs in this integral period of transition.
Every effort must be directed towards achieving gender parallelism by facilitating women in leadership and decision-making positions. Social protection programmes should be gender-responsive and account for the differential needs of women and girls. Research and scientific literature also provide unequivocal evidence that countries led by women are dealing with the pandemic more effectively than many others.
Gendered inequality, thereby, is a global concern. India should focus on targeted policies and earmarked public and private investments in care and equalized access. Women are not ready to wait for another century for equality. It’s time India accelerates its efforts and fight for an inclusive, equal, global recovery.
India will not fully develop unless both women and men are equally supported to reach their full potential. There are risks, violations, and vulnerabilities women face just because they are women. Most of these risks are directly linked to women’s economic, political, social, and cultural disadvantages in their daily lives. It becomes acute during crises and disasters.
With the prevalence of gender discrimination, and social norms and practices, women become exposed to the possibility of child marriage, teenage pregnancy, child domestic work, poor education and health, sexual abuse, exploitation, and violence. Many of these manifestations will not change unless women are valued more.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]2021 WEF Global Gender Gap report, which confirmed its 2016 finding of a decline in worldwide progress towards gender parity.
Over 2.8 billion women are legally restricted from having the same choice of jobs as men. As many as 104 countries still have laws preventing women from working in specific jobs, 59 countries have no laws on sexual harassment in the workplace, and it is astonishing that a handful of countries still allow husbands to legally stop their wives from working.
Globally, women’s participation in the labour force is estimated at 63% (as against 94% of men who participate), but India’s is at a dismal 25% or so currently. Most women are in informal and vulnerable employment—domestic help, agriculture, etc—and are always paid less than men.
Recent reports from Assam suggest that women workers in plantations are paid much less than men and never promoted to supervisory roles. The gender wage gap is about 24% globally, and women have lost far more jobs than men during lockdowns.
The problem of gender disparity is compounded by hurdles put up by governments, society and businesses: unequal access to social security schemes, banking services, education, digital services and so on, even as a glass ceiling has kept leadership roles out of women’s reach.
Yes, many governments and businesses had been working on parity before the pandemic struck. But the global gender gap, defined by differences reflected in the social, political, intellectual, cultural and economic attainments or attitudes of men and women, will not narrow in the near future without all major stakeholders working together on a clear agenda—that of economic growth by inclusion.
The WEF report estimates 135 years to close the gap at our current rate of progress based on four pillars: educational attainment, health, economic participation and political empowerment.
India has slipped from rank 112 to 140 in a single year, confirming how hard women were hit by the pandemic. Pakistan and Afghanistan are the only two Asian countries that fared worse.
Here are a few things we must do:
One, frame policies for equal-opportunity employment. Use technology and artificial intelligence to eliminate biases of gender, caste, etc, and select candidates at all levels on merit. Numerous surveys indicate that women in general have a better chance of landing jobs if their gender is not known to recruiters.
Two, foster a culture of gender sensitivity. Take a review of current policies and move from gender-neutral to gender-sensitive. Encourage and insist on diversity and inclusion at all levels, and promote more women internally to leadership roles. Demolish silos to let women grab potential opportunities in hitherto male-dominant roles. Work-from-home has taught us how efficiently women can manage flex-timings and productivity.
Three, deploy corporate social responsibility (CSR) funds for the education and skilling of women and girls at the bottom of the pyramid. CSR allocations to toilet building, the PM-Cares fund and firms’ own trusts could be re-channelled for this.
Four, get more women into research and development (R&D) roles. A study of over 4,000 companies found that more women in R&D jobs resulted in radical innovation. It appears women score far higher than men in championing change. If you seek growth from affordable products and services for low-income groups, women often have the best ideas.
Five, break barriers to allow progress. Cultural and structural issues must be fixed. Unconscious biases and discrimination are rampant even in highly-esteemed organizations. Establish fair and transparent human resource policies.
Six, get involved in local communities to engage them. As Michael Porter said, it is not possible for businesses to sustain long-term shareholder value without ensuring the welfare of the communities they exist in. It is in the best interest of enterprises to engage with local communities to understand and work towards lowering cultural and other barriers in society. It will also help connect with potential customers, employees and special interest groups driving the gender-equity agenda and achieve better diversity.