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Saturday, Oct 19, 2019

Hey, that?s rich!

The global financial institutions? claims of success in their showbiz war against rural poverty is suspect, reports Sankar Ray.

india Updated: Jan 16, 2007 03:31 IST
Sankar Ray
Sankar Ray

The sincerity of global financial institutions is suspect. It is not enough to blame the anti-poverty strategies and programmes under the International Monetary Fund and the World Bank for their failure to remove poverty. None other than the Bank’s autonomous outfit, Independent Evaluation Office (IEO), found living standards falling in 14 out of 25 countries surveyed.

IEO Director-General Vinode Thomas debunked the Bank’s claim that the percentage of people subsisting on less than a dollar a day between 1990 and 2002 declined from 28 to 19 per cent. “If you take out China, the numbers would be unfavourable,” he quipped. The Bank estimate of 1.1 billion people living below the poverty level is an understatement.

A study by the Helsinki-based World Institute for Development Economics Research of the United Nations University (UNU-WIDER) severely indicted the Fund-Bank’s showbiz war against poverty. Over half of global household assets are concentrated among 2 per cent of world’s richest. In stark contrast, the bottom half of the world adult population owns at the most 1 per cent of global wealth, it revealed.

The UNU-WIDER investigation endorses the rationale of criticism against the pro-rich trio — IMF, World Bank and the WTO. The Fund-Bank spending of $9.6 billion for reduction of rural poverty is media-hyped as it hardly percolates to the ‘wretched of the earth’.

This is the first-ever comprehensive survey of distribution of global assets, taking into account components of household wealth like financial assets and debts, land and other tangible property. The aggregate global household wealth was estimated at $125 trillion in 2000, roughly three times the total global GDP.

India with a more than 16 per cent of the world’s adult population has just over 1 per cent of global assets against China’s share of a little more than 3 per cent.

“Average wealth amounted to $144,000 per person in the US in year 2000, and $181,000 in Japan. Lower down among countries with wealth data are India, with per capita assets of $1,100, and Indonesia with $1,400 per capita,” the document states. On the contrary, North America with 6 per cent  of the world adult population accounts for 34 per cent of household wealth.

Poverty estimation by India’s National Sample Survey Organisation (NSSO) is different. Even by the NSSO’s calculation, disparity in incomes persists. The number of people living below poverty line was estimated at 22.15 per cent in 2004-05 as compared to 26.09 per cent in 1999-2000.

The 60th NSSO estimated monthly per capita consumer expenditure in rural India at Rs 565 and Rs 1,060 in urban areas. Rural India spent Rs 305 on food, Rs 260 on non-food. The urban break-up is: food Rs 441 and non-food Rs 669. The urban-rural gap remains conspicuously wide in India. Furthermore, inequalities remain considerably under-evaluated in India.

First Published: Jan 16, 2007 03:31 IST

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