7.1 Inequality and Poverty



7.1 Inequality and Poverty

If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin - Charles Darwin [see reference 5]

The Bruntland report’s definition of sustainability “meeting the needs of the present without compromising the needs of the future” [see reference 6] implies intergenerational equality, and this concept of equality can therefore be applied to society in the present generation. Using equality as a measure of sustainability therefore, it can be observed through the following figures that socially we are far from achieving a sustainable system.

The figure below shows a world map and highlights the percentage of people living on less than 1.25 dollars per day.

Figure 7.1.1 Percentage of population living under 1.25 USD per day in 2009

Wikipedia [see reference 7]

Figure 7.1.1 sourced from Wikipedia (Author: Tony0106) under a Creative Commons Attribution-Share Alike 3.0 Unported license

The figure of 1.25 dollar is used by the UN as an economic line under which people are described as living in poverty. The map shows a huge divide over the world, with most of Africa living in poverty and most of the "developed North" having poverty levels of under 2%.

Limited access to money usually implies people living in poverty do not have access to basic water and sanitation facilities, low nutrition levels, lack of access to education and a very poor quality of life. The amount of people living without these basic facilities for life is alarming compared with the luxuries and excesses enjoyed by the majority of the populations in more economically developed countries.

Another way of looking at the divide is comparing Gross Domestic Product (GDP) (how wealthy a nations is) and their average life expectancy, which is a rough measure of the health of a nation. This is displayed in the figure below and again the spread is remarkable.

Figure 7.1.2 GDP per capita vs. life expectancy for all the countries in the world

Gapminder [see reference 8]

figure 7.1.2 sourced from Gapminder under a Creative commons Attribution 3.0 Unported License

It can be seen that an increase in wealth is generally followed by an increase in health, but the primary observation from the figure is the wide distribution throughout the nations of the world. With this level of inequality currently society is a long way off from being called "sustainable".

GDP is a measure of how much money a nation spends, but is not necessarily a measure of the countries wealth, as it will include money spent on hospitals, policing, pollution control and weapons. An increase in car crashes, violent crime, cleaning up an oil spill or going to war will all increase a countries GDP, but does not represent a better quality of life.


Go to http://www.gapminder.org/world and view the graph "health and wealth of nations" which shows how these figures for GDP and life expectancy have changed over time. There are several datasets which you can view, including poverty rates, access to water, HIV rates and de-forestry. It is in an interesting depiction of world statistics and shows clearly the lack of equity present in the world.

The next figure tackles a similar concept but instead of GDP looks at the ecological footprint, and instead of life expectancy looks at the Human Development Index (HDI). The ecological footprint is a concept introduced in the first chapter of this module, and is measure of resource consumption in terms of land use measured in hectares per person required for that lifestyle. It is a way of picturing whether a consumption rate is sustainable in terms of number of planets needed if everybody on the earth had the same level of consumption. Marked on the graph is the red line for 1 planet, or 2.1 hectares per person.

The Human Development Index was devised by the UNDP in an attempt to a find a better quantifier of quality of life; it takes into account life expectancy, literacy, education and standards of living.

Figure 7.1.3 Comparison between human welfare and ecological footprint

Travelplanner via Wikimedia Commons [see reference 9]

figure 7.1.3 sourced from Travelplanner (Author: mckayro) via Wikimedia Commons under a Creative commons Share Alike 3.0 Unported License

It can be seen that a relatively high measure of human welfare can be obtained with a comparatively small ecological footprint (e.g Cuba). After this point consuming more resources does not improve your quality of life by a large amount. Another important observation to take from this graph, apart from the spread between the countries, is the number of countries currently consuming more than the Earth's carrying capacity, and the degree to which this limit has been surpassed in the case of the most resource hungry nations (e.g. USA).

The inequalities are linked; poor nations are often poor because they have been exploited by the richer nations; and international trade rules exist to perpetuate this system: by making money in one part of the world you are taking money from another. A game of consolidation of power through capitalism is in progress where generally the rich get richer and the poor get poorer.

Now read the following extract from a blog post by Richard Skellington which highlights the disparities between the rich and poor:

In times like these the words of 2006 Nobel Prize winner Muhammad Yunus ring true:

‘poverty has been created by the economic and social system that we have designed for the world. It is the institutions that we have built and feel so proud of, which created poverty for them. Two months ago the World Bank warned that the world’s poor were far greater in numbers than they first estimated. The Bank shifted the poverty line from a dollar a day to a dollar twenty five cents. It is amazing what adding a ‘quarter’ does to the projections: a mere 25 cents plunges a further 500 million people in the developing world into poverty. Thus it was that the World Bank’s new estimate of its poor rose in August from 985 million people to 1.4 billion people. This new estimate does not take into account the recent increases in food and fuel prices.

In early October, when Dick Fuld the chief executive of Lehman Brothers - the investment bank whose collapse did so much to trigger the crisis in world financial systems - was quizzed by Congressional leaders, he did not spare a thought for those billion people living in the world today on around a dollar a day. No. He talked about his compensation package. Defending accusations of a $500 million dollar pay off he contested its size: "The $500m number is not accurate, although it is still a large number," he told an angry Congress hearing. Wait a minute, 500 million dollars! That is one dollar for every human being in the developing world who have now been added to the poverty index.

Given the increase in world population, the rate of world poverty has fallen substantially from 50% to 25% over the past 25 years. But the number of people in poverty has increased. In Africa, between 1981 and 2005, the number of people in poverty rose from 200 million to 380 million, with the average poor person living on around 70 cents a day.

Unlike other regions of the world, the rate of African poverty has remained the same, around 50% of the continent’s population remained in poverty in 2005, compared to 1981. In Asia, however, the rate of poverty has fallen since 1981, from 60% to 40%. Asia is home to 595 million people living in poverty; 455 million of its poor live in India.

In China, poverty has fallen dramatically, from 835 million in 1981 to 207 million people in 2005. Its rate of poverty fell massively from 85%to 15%. The World Bank estimate that China alone almost accounted for all the reduction in world poverty since 1981.

World poverty, excluding China, dropped from 4 out of 10 people to 3 out of 10 people during the same period. According to the World Bank the world is still on track to halve the 1990 poverty rate by 2015. But at the current rate of progress, about a billion people will still live below $1.25 a day in 2015, and some areas, such as Sub Saharan Africa, will be acutely affected. [The World Bank's 8 new poverty line of $1.25 per day in 2005 is equivalent to its $1 per day poverty line introduced in 1981 after adjustment for inflation.]

Elsewhere, especially in those middle income countries where the World Bank uses a poverty line of $2 a day the poverty rate has indeed fallen. Latin America, the Middle East and North Africa have improved but not enough to bring down their total number of poor. The $2 a day poverty rate has increased in Eastern Europe and Central Asia though these areas showed some small signs of progress since the late 1990s.

We live in a world in which ten children die every minute from malnutrition, where 10.7 million children never live to see their fifth birthday, and where 4 out of 10 human beings have no access to basic sanitation. These are all avoidable statistics.

Meeting the United Nations’ 9 millennium goal to halve the proportion of people in the world without access to clean water would cost $4 billion dollars a year for the next decade. Four billion dollars is roughly what Europe’s population spends each month on bottled water.

Richard Skellington [see reference 10]

The above figures and blog extract serve to illustrate the point that sustainability is as much about humanity as it is the environment; a cornerstone of the sustainability triangle is "social", and the central ethic of the social paradigm is equity. From the figures presented it can be seen that a large proportion of the wealth is held by a small proportion of the population, and in comparison a large amount of the world's population survive on very little.