MDG 1 has been met in 2010. Extreme poverty in developing countries was halved in twenty years! This is the statistical reality, but we know that there has been little improvement for people in Sub-Saharan Africa. According to official World Bank statistics, extreme poverty in SSA still hurts 413 million people, more than twice the number of 1981 and 50 % more than in 1990. Even proportionally, extreme poverty was only reduced from 51,45 in 1981 to 48 % in 2010.

We also know that the UN authors of the millennium goals manipulated various benchmarks so that extreme poverty did not have to be reduced by 550 million but only by 385 million.

Yet, there is even worse news. According to the newest calculations, extreme poverty now only hurts 571 million people (8,9 %), or less than half than what was estimated (1,215 billion)!

Why is this bad news?

Because it makes the poverty measurements totally unreliable. Let me briefly explain.

In order to make national measurements internationally comparable, ‘purchase power parities’ (PPPs) are used, a kind of conversion rate that takes into account the difference in standards of living and price levels in different countries. This method has always been very controversial, but it now shows it works like a yoyo.

PPPs are measured every five years or so and give rise to new poverty statistics.

In the 1990s poverty in Sub-Saharan Africa rose from 39,1 % to 49,7 %! And the estimation of poverty in 1980 rose from 800 million people to 1,482 billion! Only as a consequence of new PPPs.

In 2005 new PPPs revealed that the Chinese economy had been overestimated by 40 % and the Indian economy by 25 %! Poverty in China rose with 130 million people! In total, the number of poor people rose by more than 300 million.

2014: new PPPs! This time again, the results are sharply different from what was expected, but in the other direction. Today, consumption and GDP are said to have been underestimated and they are revised upwards. PPPs for Africa and Asia, so it seems, were overstated by 20 to 30 % in 2005.

This means that the local value of the poverty line of 1.25 US$ a day is much lower and fewer people fall below the poverty line. We are not talking of small changes of some percentage points, but differences of 20 to 30 %.

Poverty in India will fall by 300 million people! In China the gain is 50 million. Nigeria has 30 million extremely poor people less. Bangladesh wins almost 40 million non poor people and the Philippines 14 million.

Add to this that many poor countries still do not have reliable statistical systems and that most data for the MDG indicators are missing.

Needless to say that this is only a statistical game. The people who are now classified as being ‘non poor’ do not have more resources to live a life in dignity than they had before. But they will not be eligible anymore for strictly targeted programs. These are the numbers national policies and globally important decisions often are based on.

What provisional conclusions can we draw from this?

First, it is obvious that the effort demanded of rich countries will not have to be as important when poverty is ‘only’ 9 %.

Second, the new World Bank strategy – to reduce poverty to less than 3 % by 2030 – is now a lot more realistic than it was two months ago.

Three, ‘poverty’, definitely, is a political topic more than it is a sad reality for millions of people. In spite of all intelligent methodologies and fine researchers who tell us how to measure poverty and inequality, we still do not know how to do it. And now that ‘social protection’ is on the agenda ‘for the needy’, it will become really cheap.

One important point: social policies, whether it is poverty reduction or social protection, are not a technical matter but a highly political issue. Watch out for the conclusions when the formal new poverty statistics will be published!