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Sub-Regional Workshop for the North Pacific: Integrating MDGs into National Development Strategies and Budgets. DEFINITION AND TRENDS OF POVERTY AND HARDSHIP IN THE PACIFIC Pohnpei, Federated States of Micronesia 26 – 29 June 2007 David Abbott

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Sub-Regional Workshop for the North Pacific:Integrating MDGs into National Development Strategiesand Budgets

DEFINITION AND TRENDS OF POVERTY AND HARDSHIP IN THE PACIFIC

Pohnpei, Federated States of Micronesia

26 – 29 June 2007

David Abbott

Regional Macroeconomic and Poverty Reduction Advisor

UNDP Pacific Centre, Suva, Fiji

david.abbott@undp.org

www.regionalcentrepacific.undp.org.fj


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Defining Poverty

  • Poverty has many characteristics:

    • Material Poverty

      • Low income

      • Low consumption/expenditure

    • Non-Material Poverty

      • Lack of economic opportunities

      • Poor health and nutrition

      • Poor education and/or illiteracy

      • Poor housing and social environment, including access to efficient cost-effective energy sources

      • Social exclusion and/or discrimination

      • Vulnerability and insecurity

      • Lack of freedom, empowerment and participation


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Defining Poverty:A Suggested Pacific Definition

Poverty = Hardship

“An Inadequate Level of Sustainable Human Development”, manifested by:

-a lack of access to basic services (eg Education, Health, Transport and Communications);

-a lack of opportunities to participate fully in the socio-economic life of the community (employment, economic activities); and

-a lack of adequate resources (including cash) to meet the basic needs of the household or customary obligations to the extended family, village community and/or the church”.

Meeting cultural and family commitments, (Tuvalu - Fakalavelave or Fakamolemole; Fiji - kerekere; Samoa - faalavelave; Kiribati - bubuti; Vanuatu and PNG - Wantok), have been cited in many other countries as amongst the primary causes of cash shortages in households, thereby constraining their ability to meet normal day-to-day basic needs expenditure.


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Pro-poor Policy: The Millennium Development Goals

  • 1.Eradicate extreme poverty and hunger

  • 2.Achieve universal primary education

  • 3.Promote gender equality and empower women

  • 4.Reduce child mortality

  • 5.Improve maternal health

  • 6.Combat HIV/AIDS, malaria & other diseases

  • 7.Ensure environmental sustainability

  • 8.Develop a global partnership for development


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Measurement of Poverty and Hardship

Quantitative Indicators

Poverty Lines and Incidence

Millennium Development Goals

Other country-specific indicators

Household Characteristics of the poor

Qualitative & Participatory Assessments - community level

Define hardship and poverty

Identify causes and characteristics

Understand people’s perceptions

Poverty of Opportunity

Access to Basic Services

Gender & other Social Issues

Identify Priorities of the People

Capacity Building

Poverty analysis

Policy development

Incorporating MDGs into national development strategies

Formulation of strategies for pro-poor equitable growth and hardship alleviation

Policy Co-ordination

Resource allocation

Participation and Consultation

Improving Understanding of Hardship and Poverty


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Why Measure Poverty

  • Objectives of Measuring and Analysing Poverty

    • identify the poor (objectively or subjectively)

    • quantify the nature of poverty

    • understand the causes and characteristics

    • design alleviation interventions

    • measure effectiveness of interventions

  • Assessing the Impact of Policies on the Poor

    • Economic growth

    • Pro-poor budgeting and social expenditure

    • Other targeted interventions


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Poverty and Policy

  • Poverty analysis can identify:

    • who are the poor and disadvantaged

    • why are they poor

    • housing conditions and household assets

    • household characteristics, including energy use and access to water and sanitation

    • age, gender and educational attainment of households

    • employment status and income sources of households

    • proportion of expenditure on food and non-food basic needs

    • proportion of food produced from own resources, food security, nutritional status


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Poverty: A Vicious Circle

  • Poverty Can Be Self-perpetuating

    • unemployment or low income leads to a

    • poor diet and frequently

    • poor health resulting in an impaired ability to concentrate or work

      • this results in

    • poor educational attainment and lack of skills

      • these conditions together

    • limit ability to take advantage of opportunities,

      • and lead to

    • unemployment

    • low income

    • social exclusion, and thus

    • perpetuate the cycle

  • Pro-poor policies required to break this cycle


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    Poverty and Hardship as Policy Focus

    • Poverty Alleviation is now a primary policy focus

      • Governments are committed to achieving MDGs

      • Need for better understanding of the extent of poverty and hardship

      • Policy development based on analysis and facts

      • Targeted interventions

      • Measured outputs and outcomes

    • Poverty Reduction Strategies

      • Equitable, pro-poor growth

      • Pro-poor and gender sensitive budgets


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    Measurement of Poverty IncidenceNational Poverty Lines

    • A Poverty Line is a threshold level of income, consumption/expenditure, welfare or some other measure of living standards;

    • Can be defined either:

      • relative to some measure of welfare over the whole population

        • poverty line would be set relative to a specific level of consumption; e.g. 50% (EU) or 60% (UK) of median (or mean) household income

      • or in absolute terms as the minimum cost of a reference standard of living

        • how to determine and measure the reference level

          • Expenditure/consumption or income

          • Defined basket of goods

          • nutrition, welfare, utility

        • Food Energy Method

        • Cost of Basic Needs Method

        • US$1 or US$2 per day (MDG 1)


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    Issues of Data Quality forMDG 1

    • Household survey data of variable quality, especially for older surveys

      • sample frames and enumerator follow-up

      • measurement of subsistence production

      • variance between income and expenditure estimates

  • Surveys not originally designed with poverty analysis as primary objective

  • Analysis often done many years after survey completed

  • PPP indices not yet available - but by end 2007


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    Quantifying National Poverty Lines and Poverty Incidence

    • Original estimates of National Poverty Lines and poverty incidence for

      • FSM, Kiribati, Samoa, Tonga, Tuvalu, Fiji, Solomon Islands

    • On-going/planned support for analysis of current/new surveys

      • Kiribati, FSM, RMI, Palau, Cook Islands, Nauru, Vanuatu

      • others as required


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    Latest Available Data on Poverty Incidence


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    Urban-Rural Comparisons of Poverty Incidence


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    Indicators of Poverty and Inequality

    • Inequality

      • Poverty measures focus on the situation of those at the bottom of the distribution

      • Inequality is a broader concept and measures the relative well-being across the whole population

      • Distribution of consumption (or other variables) can be shown graphically

        • frequency distribution - bar chart

        • cumulative frequency distribution - cumulative bar chart

        • Lorenz Curve


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    PDMCs

    Survey Year

    % Share of Income/Consumption

    L20

    H20

    Fiji Islands

    2002/03

    7.4

    41.8

    Micronesia, Fed. States of

    1998

    3.6

    55.5

    Papua New Guinea

    1996

    4.5

    56.5

    Samoa

    2002

    6.2

    45.3

    Solomon Islands

    2005/06

    6.7

    46.5

    Tonga

    2002

    4.9

    47.5

    Tuvalu

    2004/05

    10.0

    36.5

    Distribution of Income/Consumption


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    Non-Food Basic Needs % of Food Expenditure

    Fiji 2002/03

    Samoa

    2002

    Tonga

    2001

    FSM

    1998

    Tuvalu

    2004/05

    National

    131

    52

    108

    76

    70

    Urban

    192

    67

    130

    75

    143

    Rural

    115

    36

    92

    68

    52

    Lowest Quintile Households Non-Food/Food Expenditure


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    Tonga

    Tuvalu

    Fiji

    Samoa

    FSM

    2001

    2002/03

    2002/03

    2002

    1998

    Income

    Expenditure

    Income

    Income

    Income

    National

    0.42

    0.26

    0.34

    0.44

    0.51

    Urban

    0.41

    0.26

    0.35

    0.44

    0.48

    Rural

    0.39

    0.19

    0.31

    0.40

    0.30

    Gini Coefficients of Selected PICs


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    Participatory Assessments of Hardship

    • Ten countries

      • Kiribati, FSM, RMI, PNG, Fiji, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu

    • More than 170 communities, including

      • traditional leaders

      • focus groups

      • women’s, youth and other community groups

      • individuals


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    People Experiencing Hardship

    • Unemployed and landless

    • Children: orphans and those living with relatives

    • Youth: uneducated; teenage couples

    • Women: widows; single mothers

    • Men: widowers; elderly without support

    • People: “own nothing”; no education or skills;

      no support from relatives

    • Families: large and landless families (internal migrants)


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    PDMC

    Basic Social Services

    Income Opportunities

    Governance & Participation

    Others

    Kiribati

    • Outer island development

    Marshall Islands

    • Improve outer islands transport

    Micronesia, Fed. States of

    • Address excessive kava drinking

    Papua New Guinea

    • Strengthen enforcement of law & order

    Samoa

    • Access to housing assistance

    Tonga

    • Coordination among community groups

    Tuvalu

    • Provision of sports facilities for youth

    Vanuatu

    • Resolution of land disputes

    Priorities of the People From the PAH


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    Thank You

    David Abbott

    Regional Macroeconomic and Poverty Reduction Advisor

    UNDP Pacific Centre

    david.abbott@undp.org

    regionalcentrepacific.undp.org.fj


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