Preliminary recalculations of global economic output excluding differences in domestic prices and currencies, released by the World Bank in mid-December 2007, may undermine the claims that globalisation has reduced the number of people living in extreme poverty.
The World Bank has acknowledged significant mistakes in its figures concerning poverty in the world. Indeed, while “the WB’s estimates of poverty are improved thanks to more reliable data on the cost of living”; 400 million more people live in poverty than earlier thought.
This seems to point to a lack of reliability of statistics produced by the World Bank. Its press release, stated that 1.4 billion people in the developing world (one person in four) were living on less than US$ 1.25 a day in 2005, previous estimates were around 1 billion.
This is why the Millennium Development goal is to reduce by half the proportion of people living on less than a dollar a day between 1990 and 2015. But given the World Bank’s mistakes in its accounts, the set of current international policies against poverty collapses. Structural adjustment policies (reducing social budgets, cutting costs in the field of health and education, an agriculture geared to export with consequent reduction of staple food crop cultivation, relinquishing food sovereignty, etc.) that have been enforced by the IMF and the WB since the early 1980s have seriously worsened living conditions for hundreds of millions of people throughout the world.
Thomas Pogge, professor at Columbia University, wrote recently: The World Bank’s accounting policies are most questionable. We have good reason to think that with a more credible method we would observe a more negative trend and more widespread poverty. […] As long as the WB’s current method and the data it produces are used by international organisations and university research on poverty, the problem cannot really be considered seriously.
A number of economists have criticised the World Bank’s methods when measuring poverty (see Update 29). Columbia University economist Sanjay Reddy argued that the Bank’s use of a $1 per day international poverty line is irrelevant because it “does not correspond to the real cost of achieving basic human requirements”. Professor Pogge have proposed an alternative methodology: the use of a set of common criteria related to the possession of local resources sufficient to achieve basic human requirements. This approach remains untested, “despite being wholly feasible” according to Reddy and Pogge.
Sources:
http://www.brettonwoodsproject.org/art-560008
http://www.globalresearch.ca/index.php?context=va&aid=10225
