MPI: Towards an evidence-based policy approach to tackling poverty

In 1992, four years after the death of Joseph Wresinski, 17 October was officially designated as the International Day for the Eradication of Poverty. Wresinski was a lifelong campaigner against the most extreme forms of poverty and social exclusion. Great strides have since been made towards human development with millions leaving poverty. However, today is also a stark reminder of the obstacles so many Sri Lankans and South Asians are still facing, especially as countries grapple with the effects of COVID-19.

The pandemic is exposing multidimensional vulnerabilities across the region that have thus far been hidden. With incomes expected to crunch the furthest since the great depression of the 1930s, and severe impacts to health and education, successes in human development and poverty reduction are predicted to be reversed. Resilience and vulnerability, two indicators that determine crisis preparedness, warrant greater focus to enable countries to face future shocks such as pandemics and natural disasters. 

This is why a multidimensional approach to framing and looking beyond income-based poverty measures are more pertinent than ever. According to the global Multidimensional Poverty Index (MPI) – developed by the United Nations Development Programme (UNDP) and the Oxford Poverty & Human Development Initiative (OPHI) at the University of Oxford – many South Asians suffer from multiple dimensions of poverty at the same time. 

Based on data from 2020, 530 million people across South Asia are multidimensionally poor and deprived in at least one third of ten indicators spanning health, education, and living standards. While Sri Lanka has been leading compared to other South Asian countries in outcomes of health and education for decades, much needs to be done to sustain this progress and to increase resilience to withstand external shocks. This is why, a culture of policymaking that is underpinned by evidence can and should be further nurtured. With buy-in for a digital transformation agenda at the highest echelons of Government, progress is possible. 

With the latest data in hand, more context-specific multidimensional indices could help identify and focus on specific vulnerable regions and sectors. Authorities at national and sub-national levels would then be able to allocate public resources with targeted application and minimal wastage, especially given the current constraints in the fiscal space. In turn, such a comprehensive yet simple measure could lend support to Government decision-makers via a whole-of-society approach to problem-solving, combining energies of different departments and ministries where required. 

As the second least MPI-poor country in South Asia, and hovering around the upper middle-income line, Sri Lanka can perhaps learn from other upper middle-income countries that have successfully implemented a multidimensional approach to policy making and poverty eradication.

Colombia, under its former President and Nobel Peace Laureate, Santos, introduced a tailored MPI that helped its Government to focus on and identify sectors and regions that needed targeted support either through strengthening existing policy instruments or through new interventions. The Colombian MPI has won plaudits across the world and in the current pandemic, under a new Government, it is still widely used. With up-to-date and granular data, the Colombian Government has been able to merge country-wide information from the 2018 Census with administrative real-time records. The data has become a valuable tool for public policy interventions targeting areas that are at high risk of suffering from the virus: those with existing co-morbidities and those that are likely to suffer the most from lockdown restrictions. 

In Sri Lanka, the recent  UN Advisory Paper: Immediate Socio-Economic Response to COVID-19 , shared by the wider UN system with the Presidential Taskforce for Economic Revival & Poverty Alleviation, strikes a similar tone and identifies that reduced incomes lead families to adopt negative coping mechanisms, like cutting expenditure on food, resorting to pawning or borrowing, selling productive assets, and permanently withdrawing children from school so they can work to supplement household income. 

There is a growing canon of evidence both in Sri Lanka and globally that this crisis is having disproportionate effects on more vulnerable groups, namely low-income groups, workers in the informal economy, women, persons with disabilities and the elderly. While lockdowns are paramount to curtailing and isolating the spread of infections, associated school closures and work restrictions tend to impact more women than men, mostly due to disproportionate divisions in childcare and home-schooling. As home-schooling is fast becoming an absolute necessity across the isle, need for electronic equipment and broadband costs are fast exacerbating the digital divide and would require specific policy focus.  

A multidimensional approach to poverty eradication is essential for policymaking and identifying vulnerable groups most in need of care. As highlighted in the most recent World Bank “Poverty and Shared Prosperity” report released this month, the 2030 Agenda on eradicating extreme (monetary) poverty globally is at risk. Current estimates show that by 2030, 7% would still live in extreme poverty. Projections by OPHI that look at possible impacts to nutrition and school attendance alone predict that the great improvements in reducing multidimensional poverty may be reversed by 3 to 10 years. Hundreds of millions would become the newly poor if swift action is not taken. 

In addition to this, UNDP’s COVID-19 & Human Development report published earlier this year states “The key objective is to design policies that deal with the current compound crisis and promote inclusive human development in the coming years and for future generations. An equity lens is essential because existing inequalities mediate the impacts of the crisis on human development.”

In Sri Lanka too, as the long-term impacts of COVID-19 are yet to be seen, it has already had a tangible impact on health and in particular nutrition, education and living standards as captured in the global Multidimensional Poverty Index. 

Identifying the vulnerable and those at the margins of falling into multiple forms of deprivation during this pandemic is an utmost policy priority for Sri Lanka. With optimal use of existing data coupled with targeted policy applications, Sri Lanka can increase the resilience of her peoples to overcome these external shocks and to ensure that we leave no one behind.

[This is co-authored by Raashid Riza, Policy and Engagement Analyst at the United Nations Development Programme in Sri Lanka (UNDP) and Christian Oldiges, Director of Policy Research at the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford. To read the Global Report, please visit www.lk.undp.org / https://ophi.org.uk/global-mpi-report-2020/]