Millennium Development Goals Scorecard

Global Development

This month world leaders are set to discuss the next Millennium Development Goals (MDGs), but it is also important to reflect on progress towards the current goals. The MDGs expire in less than 500 days and it is likely that more than half of the goals will not be met. The table below provides a simplified ‘traffic light’ breakdown of how the world has performed (green meaning the goal has been met, orange meaning some sub-goals have been met and red highlighting significant progress is still required).

MDG Scorecard Table

While there is much to celebrate in terms of the progress that has been made towards the MDGs, it is important not to lose track of just how much still needs to be done. For example, there has been limited progress towards Goal 5: Improving Maternal Health. The chance of a women dying during childbirth has fallen from 430 per 100,000 live births in 1990, to 230 per 100,000 live births in 2013. However, this is still far from the goal to reduce maternal mortality by three-quarters by 2015 (down to 108 per 100,000 live births). World leaders must not ignore the MDGs that are still to be met, such as improving maternal health, when planning for the future.

To find out more about progress towards the Millennium Development Goals, check out the 2014 Report, available here.

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Lets be clear on what the “middle class” is

Global Development

Key Points

  • A number of world leaders, including the Australian Prime Minister, have claimed that millions of people have been lifted out of extreme poverty and are now living in the “middle class”.
  • However, there is no universally accepted definition of “middle class” and the use of this term is often very misleading. The “middle class” in developed countries, such as Australia, have substantially higher living standards than the vast majority of people in developing countries.
  • While there have been large reductions in extreme poverty over the last twenty years, 93% of people in the developing world still live below the United States’ national poverty line of less than US$13 a day.

Background

Earlier this year, the Australian Prime Minister claimed that hundreds of millions of people have been lifted from extreme poverty to “middle class” and there are now almost two billion people in the global “middle class”. Statements such as this do not represent how the notion of “middle class” is typically understood in the developed world.

The lowest possible standard of middle class in a developed country is living above the United States’ national poverty line (defined as $13 a day (2005 US PPP)). According to the latest World Bank data, 93% of the developing world’s population live below this line. As the chart below shows the huge decline in people living in extreme poverty has not been matched by a decline in the share of people living below the United States’ national poverty line.

From Poverty to Middle Class

The incredible reduction in the population living below the extreme poverty line (shown in the chart above) should be celebrated. However this should not be misrepresented to suggest most of these people live in “middle class” by any developed country standard.

Sources:

World Bank 2014 <http://iresearch.worldbank.org/povcalnet/index.htm>

Australian Government 2014 <https://www.pm.gov.au/media/2014-01-23/address-world-economic-forum-davos-switzerland-0>

Child Labour: The Facts

Global Development

Author: Rachel Hoy

If you asked a stranger on the street how they felt about child labour, it’s safe to say most people would not offer support for it. Yet evidence about the widespread damaging effects of child labour is overwhelming and we need to do more than hold a moral card against it, especially when we often support the demand for child labour unknowingly through our purchases.

There are 168 million child labourers around the world today. Around half are estimated to be in a hazardous form of labour.

Over 10% of the world’s children over 5 years old are child labourers. That means that one child in every ten is currently working under conditions detrimental to their physical and mental health.

Image 1

This is the same percentage of people who travel to work via public transport in Australia.

More than 2 out of 5 child labourers are aged between 5 and 11 years old. That means nearly half of child labourers are younger than Australian high school age.

Image 2

This is more than the percentage of people in Australia who own one car.

More than 1 in 5 children in Sub-Saharan Africa are engaged in some form of child labour. That means in a group of five friends, one is unable to attend school due to being forced into child labour.

Image 3

This is around the same percentage of people in Melbourne who live in a two-bedroom household.

These are just some of the facts surrounding the pervasiveness of child labour. Child labour is declining due to collective efforts but it is clear there is a long way to go. While these statistics are alarming, behind each statistic lies a personal story – both heartbreaking and mostly preventable.

A good start to preventing demand for child labour is to know the standards of the product that you buy. Try downloading the shopethical! app for your next trip to the supermarket or asking your local café about their coffee and tea suppliers.

Source:

World Vision Australia 2014 <http://www.worldvision.com.au/Libraries/Child_Labour_Myths_report/Child_Labour_Myths_Media_Report_12Jun14.pdf>

Information about the Author: Rachel Hoy is a VGen Youth Campaigner for World Vision Australia who works on the #FreeTo campaign. She just completed a Master of development studies at the University of Sydney.

40 Hour Famine

Global Development

This weekend, hundreds of thousands of Australians gave up something they live with everyday (food, furniture, technology etc) to fundraise as part of World Vision’s 40 Hour Famine. This year the focus is on alleviating poverty in Rwanda, particularly reducing hunger in children under five-years old.

The table below provides a snapshot into just how different life is like in Rwanda compared to Australia. For example, for every 1 maternal death in Australia, there are 143 in Rwanda. While for every $1 spent per child on primary education in Rwanda, over $300 is spent per child in Australia.

AUSTRALIA

Aus flag

For Every RWANDA 

Rwanda flag

1

Maternal death

143

1

Child that dies before five-years old

11

1

Preventable death

14

1

Undernourished child

30

1

Person per square kilometre

157

303 Dollar spent per child on Primary Education

1

93

Dollar spent on Health

1

2

Child completing Primary Education

1

10 Internet user

1

8 Child in pre-school education

1

According to World Vision, just $1 fundraised as part of the 40 Hour Famine is enough to feed 1 person for up to 5 days. If you are interested in finding out more and/or donating check out: http://www.40hourfamine.com.au

Sources:

World Bank 2014 <http://data.worldbank.org/data-catalog/world-development-indicators>

The Beginning of the End of Extreme Poverty

Global Development

Key Points

  • In 1820, almost everyone in the world lived in extreme poverty. Since this time, incomes in the developed world have increased more than 12 fold, eradicating extreme poverty in these countries. In the UK, income per person was equivalent to Africa today in 1820 and to Latin America today in 1950. While in China income per person was equivalent to Africa today twenty-five years ago and is now similar to Latin America.
  • Income per person only tells part of the story of how living standards have changed over time. For example, due to improvements in medicine, child mortality in Africa is around one quarter of the rate of the UK in the early 1800s, even though they had similar income per person.
  • The eradication of extreme poverty in less than two centuries in some countries provides hope that extreme poverty can be eliminated from all countries.

Background

For most of human history, extreme poverty was the norm. This only began to change in the last couple of centuries as some countries (largely in Western Europe and North America) experienced prolonged periods of economic growth.

The chart below shows the steady increase in income per person over the last two hundred years in the UK. In 1820, income per person was equivalent to Africa today, while by 1950 incomes were similar to Latin America today.

Income per person overtime

Rapid economic growth in China led to the same increase in income per person, which took the UK 130 years, in just 25 years. This has led to hundreds of millions of people escaping from extreme poverty.

To get a more holistic understanding of how living standards have changed over time, it is important to go beyond the income per person measure. Advances in medicine have allowed for higher levels of development for a given income level than what today’s developed countries experienced in the 1800s. For example, in the UK in the early 1800s, every second child died before the age of five. While around one in seven children die before five in Africa today.

Next month, World Leaders will discuss the next Millennium Development Goals and whether to include a timeframe to end extreme poverty by 2030. This is a truly historic moment in human history as it was really only a couple of centuries ago that extreme poverty began to be permanently reduced.

Sources:

World Economics 2014 <http://www.worldeconomics.com/Data/MadisonHistoricalGDP/Madison%20Historical%20GDP%20Data.efp>

Copenhagan Consesus Center 2011 <http://www.copenhagenconsensus.com/sites/default/files/health.pdf>

 

Revised Commonwealth Games Medal Tally

Global Development

As the 2014 Commonwealth Games come to end have you ever wondered how fair the playing field is?

Most members of the Commonwealth are developing countries and many are small islands. Only a few countries, like the United Kingdom, Australia and Canada, are rich enough and have sufficiently large populations to have well nourished populations that have time to hone their skills in competitive sports. This significantly reduces the competition at the top of the medal tally. For example, to illustrate the inequality between Commonwealth countries compare the richest and poorest countries. The richest country, Australia, has over 125 times more income per person than the poorest country, Uganda.

Countries rankings would change dramatically if the medal tally were revised to adjust for differences in income per person and population size, as has been done for the table below. This removes disparities in wealth and population and allows for a fairer comparison of how countries have performed.

 

Rank Country Revised Medal Tally Change in Ranks
1 Nauru 1482 24
2 Samoa 459 15
3 Kiribati 373 23
4 Grenada 253 16
5 Jamaica 148 4
6 Saint Lucia 77 21
7 Kenya 61 1
8 Bahamas 39 10
9 Trinidad and Tobago 38 4
10 New Zealand 27 -5
11 Cyprus 27 1
12 Uganda 26 3
13 Fiji 26 15
14 Cameroon 25 0
15 Isle of Man 24 14
16 Barbados 23 14
17 Namibia 22 2
18 Papua New Guinea 14 3
19 Mozambique 13 3
20 United Kingdom 11 -19
21 South Africa 10 -15
22 Zambia 9 1
23 Australia 9 -21
24 Mauritius 8 7
25 Nigeria 8 -18
26 Botswana 6 6
27 Malaysia 6 -17
28 Singapore 5 -17
29 Canada 4 -26
30 Ghana 4 -6
31 India 3 -27
32 Pakistan 2 -16
33 Sri Lanka 2 0
34 Bangladesh 1 0

Small islands countries and some African countries perform substantially better when the medal tally is revised to take into account income per person and population size. Nauru, Samoa and Kiribati take the top three places because they are middle-income countries with tiny populations and still managed to get five medals between them (including a gold and three silver). While Australia, the United Kingdom and Canada fall to the bottom third of the rankings.

Sources

Commonwealth Games 2014 <http://results.glasgow2014.com/medals.html>

World Bank 2014 <http://data.worldbank.org/data-catalog/world-development-indicators>

Australian Aid mainly goes to Middle Income Countries

Australian Aid Policy

Key Points

  • Almost 90% of Australia’s country program aid goes to middle-income countries.
  • Middle-income countries have higher average living standards than low-income countries and are typically less reliant on aid. For example, aid accounts for less than 2% of Vietnam’s economy.
  • Almost all low-income countries in the world are in Sub-Saharan Africa. This is the region where Australia provides the lowest level of aid in per person terms.

Background

The World Bank defines a middle-income country as having over US$1045 income per person (2013 GNI Atlas Method). These countries are considered to be rich enough to be able to begin to access forms of finance other than grant aid, such as private sector loans.

Australia provides almost 90% of country program aid to middle-income countries. This is significantly higher than most other aid donors. The chart below shows that almost all of Australia’s top aid recipients are middle-income countries.

Income per person

Aid is typically only a small share of the economy in middle-income countries. The chart below shows how most of Australia’s top aid recipient countries are not very reliant on aid. In the case of Indonesia and Philippines, aid is actually a negative share of GNI because more money is spent paying off aid loans than they receive in new disbursements of aid.

Aid as a share of GNI

High economic growth rates in Asia in recent decades have meant that there are only a few low-income countries in the region. Sub-Saharan Africa is home to almost all low-income countries in the world and the region is the most reliant on aid. However Sub-Saharan Africa receives the lowest level of Australian aid in per person terms.

Should the region with the poorest countries in the world, which rely the most on aid and have the highest proportion of people in extreme poverty, receive the lowest levels of Australian Aid?

 

Sources

 

OECD 2014 <http://www.oecd.org/dac/stats/idsonline.htm>

World Bank 2014 <http://data.worldbank.org/data-catalog/world-development-indicators>

 

Australia is set to benefit from Aid for Trade

Australian Aid Policy

Key Points

  • The Australian Government has a new commitment to redirect aid spending from traditional aid programs, such as health and education, towards ‘Aid for Trade’. Aid for Trade initiatives are meant to lower transaction costs, making it cheaper and faster for developing countries to buy and sell products overseas. This also benefits Australia because it makes it cheaper and faster to buy from and sell products to aid recipient countries.
  • Many of Australia’s aid recipient countries also rely on Australia as a major trading partner. For example, over one third of PNG’s exports and imports are with Australia.
  • While it is expected that Australia will benefit under this new approach, it is unclear whether the benefits to aid recipient countries from Aid for Trade will be similar, better or worse than those from traditional aid programs.

Background

According the Australian Government, Aid for Trade is about opening up new markets to help boost trade in developing countries. Examples of Aid for Trade initiatives currently funded by the Australian aid program include: paying for DFAT employees to negotiate a Free Trade Agreement with Pacific nations to remove trade barriers; and infrastructure projects such as roads or bridges to allow easier movement of products in and out of developing countries.

Aid for Trade is becoming the flagship of the Australian Aid program under the Government’s new aid paradigm. By 2020, one fifth of all aid will be spent on Aid for Trade. Australia will benefit significantly from an increased focus on Aid for Trade as this will lower transaction costs when trading with Australian aid recipient countries.

Australia is a major trading partner for Australia’s main aid recipient countries, especially in the Pacific. The chart below shows the share of Australian exports of the total exports to these countries. Australia is a top 20 trade partner for all of these countries and a top 5 trade partner for the Pacific countries.

Aid for Trade

To fund Aid for Trade, aid will be shifted away from traditional aid programs, including health and education. While it is likely Australia will benefit from more efficient trade, it is unclear what the impacts of this shift will be for aid recipient countries. Little analysis has been made available by the Australian Department of Foreign Affairs and Trade that discusses what the implications are, positive or negative, for developing countries when aid funding is shifted away from traditional programs to Aid for Trade initiatives.

Given that aid has been redirected away from traditional aid programs towards Aid for Trade, Australia is set to be a beneficiary of this and the benefits for developing countries have yet to be made clear, the question emerges, should Aid for Trade be the flagship of the Australian Aid program?

Sources

DFAT 2014 <http://www.dfat.gov.au/>

Mind the Gap

Global Development

Mind the Gap

Have you ever wondered how large the gap in living standards is between countries? Or how this has changed over time?

An excellent resource to allow you to look at the evidence in a visually engaging and user friendly way is http://www.gapminder.org/

For example, to explore how the Wealth and Health of Nations has changed over time click on the picture below to open Gapminder’s interactive display.

Gap Minder picture

Gapminder also has a series of brief and informative YouTube clips, such as the following video that shows how 200 countries have developed over the last 200 years in just 4 minutes.

How much control do you have over your standard of living?

Global Development

Key Points

  • An individual’s standard of living is overwhelmingly determined by factors out of their control. As such poverty is largely entrenched from birth.
  • A person’s nationality and the level of income of their parents account for over 80% of global differences in standards of living. Nationality alone explains almost two-thirds of the difference.
  • All other factors such as effort, gender and ethnicity account for less than 20% of global differences in standards of living.

Background

Analysis by the World Bank finds that where you are born and who your parents are have huge implications on your standard of living. Nationality and parent’s income level account for over 80% of global differences in standards of living, as can be seen in the chart below.

Control over standard of living

This analysis provides further evidence to demonstrate that one’s standard of living is mainly due to circumstance rather than effort. A child born to parents in poverty in the Democratic Republic of Congo (one of the world’s poorest countries) will almost certainly live their life in extremely different conditions to a child born to middle class parents in Australia.

This has profound implications in regards to how one perceives poverty. Overwhelmingly it is not an individual’s own fault for being in poverty since they had no control over where their were born and how wealthy their parents are. This creates a profound impetus to address this injustice.

Source

World Bank 2009 http://www.arts.cornell.edu/poverty/kanbur/InequalityPapers/Milanovic.pdf