If you had to live on $1.25 a day, would you feel poor? How about $1.50? The difference may hardly seem worth bothering about. Many of the people reading this column spend more than $1.50 on their morning cappuccino. Yet depending on which figure you choose, the number of people classified as living in extreme poverty oscillates wildly.
This month the Asian Development Bank joined a growing chorus that is pressing for new definitions of poverty. It argues in a report that, in Asia, $1.25 no longer cuts it. One needs more to afford an adequate calorie intake and to reach what the ADB rather soberingly calls “an absolute minimum standard of living needed to avoid deprivation”. But how much more?
The ADB has come up with a suspiciously precise-sounding figure of $1.51. The $1.25 number, it says, is based on a sample of 15 countries heavily skewed towards Africa, with Tajikistan and Nepal the only two Asian representatives. Further, it argues, more weight needs to be given to the fact that food prices have outstripped general price rises over the past decade. Lastly, it says, a flat figure ignores how easily those whom it calls the “near-poor” – the “fragile middle” as classified in a recent Financial Times series – can slip back into dire poverty. Someone with $3 a day one month and 40 cents the next may well go hungry. Likewise, if a person’s dwelling is lost in a flood or their arm torn off in an industrial accident, the result can be a catastrophic lowering of living standard.