In July 2012, in his statement at the high-level opening of the Economic and Social Council meeting (see video below), UN Secretary-General Ban Ki-moon unveils the 2012 Millennium Development Goals (MDGs) report and says: “The number of people living in extreme poverty has been reduced by half, well ahead of schedule.” The report uses a February 2012 update of the developing world’s poverty estimates for 1981-2008 from the World Bank, which states: “An estimated 1.29 billion people in 2008 lived below $1.25 a day, equivalent to 22 percent of the population of the developing world. By contrast, in 1981, 1.94 billion people were living in extreme poverty.” The World Bank acknowledges various limitations in the data, such as:
- An important step in the process of compiling global poverty estimates is the conversion of the $1.25 a day international poverty line into respective national currency units [using PPP exchange rates]. PPPs are based on prices of goods and services that may not be representative of the consumption baskets of the poor, so they may not fully reflect the relative price level faced by very poor consumers.
- There are also problems with comparability of surveys, both over time and across countries. Household survey questionnaires can differ widely, and similar surveys may not be strictly comparable because of differences in quality.
For other critical analyses of the data, see: World Bank poverty line calculations are bankrupt (Sanjay Reddy) and How to underestimate absolute poverty (Thomas Pogge). Considering these uncertainties, shouldn’t the UN be more cautious in its claim that the first MDG has been achieved? See the short answer here: Myth and reality of poverty (Me).