Straight From the Horse’s Mouth: UN Reports on Growth of Global Poverty


“Human Development Report 1998.” Published for the United Nations Development Program by Oxford University Press, 1998. 228 pp. $34.95 (hard cover); $29.95 (paperback).

The annual report of the United Nations Development Program, a UN agency, is a valuable chart of developments in human welfare throughout the world. It is interesting to compare the 1998 report with the 1996 report, reviewed in the June 1997 Socialist Action. In just two years the destructive trend noted in 1996-the increasingly enormous disparity in wealth between rich countries and poor countries and also between rich and poor within countries, including industrialized countries-has accelerated.

The 1996 report gave the mind-boggling statistic that the net worth of the 358 richest persons in the world was equal to the combined income of the poorest 45 percent of the world’s population, that is, of 2.3 billion people.

The report pointed out that in this comparison it used the combined income of these 2.3 billion people rather than their combined net worth, since their net worth could not be estimated. However, it added, “a contrast of wealth alone, if it were possible, would be even starker, since the wealth of the poorest people,” who are unable to save, “is generally much less than their income.”

The 1998 report states: “New estimates show that the world’s 225 richest people have a combined wealth … equal to the annual income of the poorest 47 percent of the world’s people (2.5 billion).” Only 225 of the top billionaires are now needed on one side of the scale to balance the increased number of the poor (now 2.5 billion) on the other side!

The 1996 report stated that over the period of 30 years the share of global income of the richest 20 percent of the world’s people rose from 30 times that of the poorest 20 percent to 61 times that of the poorest 20 percent. The 1998 report states that the latest figures show it is now 82 times as much.

The 1996 report stated that since 1980 there has been economic stagnation or decline in l00 countries that have almost a third of the world’s population. In 70 of these countries average incomes were less than they were in 1980. More than a billion people saw their incomes fall between 1980 and 1993.

The 1998 report states that in the 100 countries where there has been “serious economic decline” over the last three decades per capita income is “lower than it was 10, 15, 20, even 30 years ago.”

Almost 3 billion of the estimated 5.6 billion people constituting the world’s population live on less than $2 a day. The 1996 estimate was that more than half of the world’s population lives on less than $2 a day.

The 1996 report stated that, while nearly 170 million people in East Asia were living below the poverty line, per capita income there grew more than 5 percent a year between 1960 and 1993, the highest rate in the world.

Just 10 semi-industrialized countries, mostly in East Asia but also in South America, received three-quarters of the investment capital of the advanced capitalist countries. However, the report suggested, these countries had only “limited autonomy over interest rates, exchange rates or other financial policies.”

The dependency of these countries on the global financial market, in which capital can flow out as readily as it flows in, has been confirmed by the East Asian economic crisis, which the 1998 report calls “undoubtedly the biggest setback to human development in the past year.”

The extraordinary extent of this setback, which of course has worsened since the report was written, is indicated by a single sentence in a recent Associated Press dispatch (The New York Times, Jan. 16, 1999): “The number of Indonesians living in poverty has reached 130 million [out of a population of 206 million], a sharp increase from 80 million last year, the government reported.”

U.S. wealth disparities

Poverty and enormous disparity of wealth between rich and poor, the 1996 report showed, are, however, present not only in unindustrialized and semi-industrialized countries but in industrialized countries as well.

One hundred million people in the industrialized countries, it reported, live below national poverty lines.

As an indication of the growing disparity of wealth, it cited the situation in the United States, where, “between 1975 and 1990, the richest 1 percent of the population increased its share of assets from 20 percent to 36 percent.”

The 1998 report introduces a new statistical index, the human poverty index for industrialized countries, which is not the same as income poverty but measures the maldistribution of income and deficiencies in health and education that result in exclusion from active participation in a community.

This index has special significance for Americans, who are being bombarded with triumphalist statements concerning the nation’s unparalleled prosperity. Ranking 17 industrialized countries, the report finds that “the United States, with the highest average income …, has the highest population share experiencing human poverty.”

Thus, among the 17 countries, the United States, with 13 percent of its people not expected to survive to age 60, came in last in this respect.

With 20.7 percent of its population between the ages of 16 and 65 functionally illiterate, that is, unable, as measured by an international literacy survey, to follow simple written instructions such as are on a medicine bottle, the United States did more poorly than any other country except Ireland and the United Kingdom. With 19.1 percent of its population having less than 50 percent of the median personal income, it ranked lowest on this measure of social exclusion.

Although the report does not mention it, these statistics reflect the existence of a “Third World” sector in American society consisting largely of African Americans, Latinos, and immigrants. The fact cited in the report that “31 percent of Hispanics aged 25-65 have not completed the ninth grade, compared with only 6 percent of whites,” helps to explain what may seem to be the surprising percentage of functional illiterates.

Even in terms of income poverty, the percentage of people in this category rose in the United States (as well as in the United Kingdom) between 1975 and 1995, the last year’s figures available to the report’s writers.

Neither high economic growth nor a rise in average income necessarily prevents the poor from growing poorer or their number increasing, in industrialized countries as in unindustrialized countries.

The one measure of human poverty in which the United States does best of the 17 industrialized countries is in its low long-term unemployment. Here, however, the example of Japan is instructive.

Japan, said the 1996 UN report, had long held the record for long-sustained growth and for the lowest sustained unemployment, but for many years now it has been suffering from a stagnant economy and increasing unemployment.

The triumphalism of Japan in the 1970s, which was giving the United States advice on how to run its economy, has been succeeded by the triumphalism of the United States today.

At the moment the United States has benefited from foreign capital seeking a safe haven here from the turmoil abroad. However, the growing U.S. trade deficit, resulting from its trading partners cutting prices and devaluating their currencies in a desperate drive to export and at the same time being too impoverished to sustain imports from the United States, is a sign that this country, as Alan Greenspan once stated, cannot be an island of stability in an ocean of turmoil.

The contagion of what has been called “the Asiatic flu,” the financial fever that originated in East Asia, has spread to Russia and Brazil and threatens the rest of the world. But it is not only this epidemic but more literal epidemics, from which rich countries cannot insulate themselves in this era of global travel, that threaten “not just the health of the world’s people but the achievements in human development.”

Rise of AIDS epidemic in underdeveloped world

Despite widespread poverty throughout the world, the 1996 report stated, infant mortality, thanks to the advance of medical science, has fallen sharply and life expectancy has risen greatly. However, it warned that overcrowding, poor sanitation, and homelessness could bring epidemics that might wipe out the gains from immunization and other health measures.

The 1998 report repeats this warning and points to the HIV/AIDS epidemic. In 1996, 22.3 million people were living with HIV; at the end of 1997, nearly 31 million were doing so.

As a result of lack of education and of high-quality, inexpensive condoms as well as other effects of poverty, 90 percent of those becoming infected are in Africa and Asia, with India having the greatest number. “Sex tourism” may cause the number infected in the West to grow.

Just as, though epidemics hit poor countries hardest, advanced capitalist countries cannot isolate themselves from the spread of contagious disease, so it is poor countries that suffer most from environmental damage, which, however, ultimately threatens us all.

Rich countries contribute by far the most to pollution, global warming, and toxic and other waste; poor countries suffer disproportionately from the effects of these phenomena. Depleting their resources in order to survive, they in turn contribute to deforestation, soil degradation, and loss of biodiversity.

Despite its tracking of dangerous trends, the report is insistent that “a cleaner environment, a more equitable society and the eradication of poverty” can be achieved. It merely requires setting the proper goals and making proper allocation of our present resources, which are more than sufficient for these tasks.

Only $40 billion or 0.1 percent of world income would be needed yearly to bring basic education, clean water and sanitation, and basic health, nutrition, and family planning services to every one in the world.

“The future is bleak,” says the report, “if we continue with business as usual. But there are alternatives and we can shape the future accordingly-with big commitments, big changes in policies, institutions, and values and a big sense of collective responsibility.”

However, the “key actions for change” urged by the report, such as “taking actions to ensure minimum consumption for all” and “strengthening mechanisms for international cooperation,” can only be unheeded exhortations in a global economy in which “competitiveness,” used to justify holding down wages and cutting social services, is the name of the game.

Telling the profit-driven giant corporations and the ruling-class governments that they must cooperate for the benefit of all is like telling a man-eating tiger that it must take up vegetarianism.

What I wrote at the conclusion of my review of the 1996 report remains true: “Only the international working class can bring about a new society worthy of humanity.

The attainment of this society will require the organization of a titanic struggle and then a mighty effort after the victory of the working class has been gained throughout the world. But there is no other way to emerge from the morass of capitalism.”

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