Can the world really end ?

Andy Sumner, King’s College, London

UNPAD SDGs Center Launch, 20 May 2016 Good news, bad news, good news

• The good news: Yes, at the lower poverty lines

• The bad news: Growth essential though not likely to be enough

• The good news: There’s new capacity to speed things up Contents

1. Introduction 2. What is the problem? 3. What progress? 4. Is growth likely to be enough? 5. Is there capacity to speed things up? 6. Conclusions: Is it possible? 1. Introduction 17 SDGs ---> 6 poverty SDGs

• End (monetary) poverty in all forms (SDG 1) • End hunger, etc. (SDG 2) • Ensure healthy lives (SDG 3) • Ensure education (SDG 4) • Ensure availability of water and sanitation (SDG 6) • Promote inclusive growth inc. employment (SDG 8) What is ‘end poverty in all forms’?

SDG 1 = monetary/consumption poverty

Global poverty line = $1.90/day

National poverty lines = $2.50/day or $5/day (correlation to ending education, health, poverty)

And real end of poverty = $10/day…? 60 All developing countries 50 %)

40

30

20

Population poor ( 10

0 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 Level of Daily Consumption (2011 PPP) 2. The global poverty problem 2. The global poverty problem

Ending global poverty framed by the following:

– Global poverty is concentrated (18 populous countries = 85% of global poverty; 126 countries = 15%)

– Poorest people not necessarily in poorest countries (e.g. Ethiopia versus Brazil) Where do the world’s poor live?

India China 126 countries Nigeria India Bangladesh DRC Ethiopia Tanzania China Madagascar Mozambique Philippines Indonesia Uganda DRC Nigeria Bangladesh Pakistan Hoy and Sumner (2016) Poorest people not necessarily in poorest countries (Ethiopia vs Brazil)

Survey Mean vs Mean Consumption of $1.90 Poor Mean HFCE vs Mean Consumption of $1.90 Poor

1.6 IDN 1.6 IDN IND IND CHN CHN

ETH ETH 1.4 1.4

TZA TZA 1.2 1.2 NGA NGA 1 1 MDG MDG ZAR ZAR .8 .8 Mean Consumption below $1.90 a day (2011a day $1.90 below Consumption Mean PPP) (2011a day $1.90 below Consumption Mean PPP) 0 5 10 15 20 0 5 10 15 20 25 Daily Survey Mean (2011 PPP) Daily Mean HFCE (2011 PPP)

Survey Mean vs Mean Consumption of $2.50 Poor Mean HFCE vs Mean Consumption of $2.50 Poor 2 2 IDN IDN IND IND CHN CHN 1.8 1.8 ETH ETH

1.6 TZA 1.6 TZA

1.4 NGA 1.4 NGA 1.2 1.2

MDGZAR ZAR MDG 1 1 Mean Consumption below $2.50 a day (2011a day $2.50 below Consumption Mean PPP) (2011a day $2.50 below Consumption Mean PPP) 0 5 10 15 20 0 5 10 15 20 25 Daily Survey Mean (2011 PPP) Daily Mean HFCE (2011 PPP) Hoy and Sumner (2016) 3. What progress since the Cold War? Global Poverty, 1990-2012

6000

5000

4000

$10.00 a day 3000 $5.00 a day $2.50 a day $1.90 a day

2000 Poverty headcount (millions)

1000

0 1990 1995 2000 2005 2010 2015 4000

3500

3000

2500

$10.00 a day 2000 $5.00 a day $2.50 a day $1.90 a day 1500 Poverty headcount (millions)

1000

500

0 Global poverty, 1990-2012, excluding China 1990 1995 2000 2005 2010 2015 4. Will be enough to end poverty by 2030? Growth scenarios: What if…? 6000

5000

4000 $1.90 a day $2.5 a day $5.00a day 3000 $10.00 a day Pessimistic growth Moderate growth 2000 Optimistic growth Poverty headcount (millions)

1000

0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Edward and Sumner (2016) Year of end of poverty by growth alone

Poverty line Year range $1.90 2200-2250 $2.50 2250-2300 $5 2300-2400 $10 2500-2600

Hoy and Sumner (2016) 5. Is there capacity to speed things up? New capacity to fund poverty programmes % of global New taxes on Fossil fuel poverty covered $15+/day (US subsidies to poverty line) poverty $1.90 50.5 69.1 $2.50 23.4 69.9 $5 6.2 38.7 $10 5.6 8.1

Hoy and Sumner (2016) And more inclusive future growth…

1990-2012

Edward and Sumner (2016) What determines inclusivity of growth?

• Domestic policies: Fiscal policy – spending and transfers; labour market policies and expansion of primary and secondary education and health insurance

• External factors: global economy; migration; technology; remittances, etc.

• Dabla-Norris et al., (2015, p. 27) find three factors raise the income share of the poor in cross-country data: (i) expanding access to education, (ii) improved health outcomes and (iii) social transfers 6. Conclusions 6. Conclusions: Is it possible?

• The good news: Yes, at the lower poverty lines • The bad news: Growth essential though not enough • The good news: There’s new capacity to speed things up

• Indonesia as global leader on poverty reduction: • reallocation of fuel subsidies • spending on equality of opportunity (education and health); • new infrastructure spending > employment &

• Most importantly – the new UNPAD SDGs Center!