Date: Sat, 18 Feb 2006 
To: strobes@private-eye.co.uk
Subject: Mr Benn's poverty claims


Hello  -  I thought you might be interested in this.

Benn and UN experts differ on global food needs


In 2006 Hilary Benn made two claims about global poverty.  However, he was
warned in 2003 that current methods failed to take into account this fact:
average food needs are rising because proportions of children are falling.

A fall in birth rates lowers total food need and raises average food need.

Mr Benn was warned in a message passed to him by the Chairman of the
International Development Select Committee in June 2003 that the tradition in
economics was to make numerical claims about global poverty, and policies'
success or failure, without estimating food prices or food needs.
 
An obvious candidate for thought is the use of per-person statistics for China,
despite the one-child policy and the consequent higher average food needs.   

One of Mr Benn’s claims is in Hansard.  In a written answer to Andrew George MP
on 9 January, he said:

"Globally over 200 million people have been lifted out of poverty between 1990
and 2002" [footnote says: "Table 1.3, Global Economic Prospects 2006, World Bank."]

Source:
http://www.parliament.the-stationery-office.co.uk/pa/cm200506/cmhansrd/cm060109/text/60109w50.htm#60109w50.html_sbhd2

The other was in the first White Paper Speech, on 19 January at the New
Economics Foundation.  

"The number of people living on less than a dollar a day dropped over the last
20 years from 1.5 billion to 1.1 billion – an incredible achievement, in one
sense given that the world’s population grew by 1.6 billion during that time.
China alone lifted 400 million people out of extreme poverty."

Source: http://www.dfid.gov.uk/news/files/Speeches/wp2006-speeches/growth190106.asp


In light of the one-child policy, it is perhaps worth noting that Mr Benn's
claimed reduction in the world is the same as the claimed number for China.  


The World Bank uses per-person statistics for global poverty claims.
Source:  Methodology paper for Millennium Goal Indicator 1, "How did the World's
Poorest Fare in the 1990s?", Shaohua Chen and Martin Ravallion
http://econ.worldbank.org/external/default/main?pagePK=64165259&piPK=64165421&menuPK=64166093&theSitePK=469372&entityID=000094946_00081406502730
.

In 2002 I wrote an email to a professor:  "Dear Professor Giddens…other things
being equal.....If the birth rate falls, and babies earn less than adults,
average income will go up even if average incomes for all age groups stay the
same."  This received no reply.

In January 2003 I submitted an article to ELDIS, the University of Sussex
service for disseminating articles on international development.  It said:  

"The World Bank’s “dollar” line....mistakenly counts adults’ needs as the same
as children’s [and] will underestimate poverty as birth rates fall"

The article was rejected as "not sound".    Exactly the same point, though,
subsequently appeared in the draft Handbook on Poverty Statistics from the UN
Statistics Division, in June 2005.    

The fact that the World Bank does not adjust for children's needs was confirmed
in a telephone conversation with Dr Shaohua Chen, co-designer of the Millennium
Goal Indicator 1 methodology, World Bank, 28 March 2003.

The UN Food and Agriculture Organisation do adjust in a crude way for rising
food needs for claims on global hunger.  These claims relate to:
a) the same Millennium Goal and 
b) mostly the same people and 
c) a similar concept (consumption adequacy) 
as the World Bank claims.

Sources:
Jorge Mernies, senior statistician, FAO, Rome, telephone, 2003;  
L.Naiken, description of FAO methodology in FIVIMS documentation.

We might ask whether Mr Benn or the FAO are closer to the truth about food needs.

Here are extracts from an email from me to Tony Baldry, then Chairman of the
International Development Select Committee on 25 June 2003.  He sent the email
to Gareth Thomas MP for a reply, and Hilary Benn, then Minister of State at
DFID, replied to the Chairman without any reference to food needs.   My email
had mentioned adults, age, children and needs several times.


“Dear Mr Baldry

I am writing to you in your capacity as Chairman of the Select Committee on
International Development.     I would like, with your permission, to raise some
issues for the Select Committee to consider...

There are some serious flaws in economic research on global poverty.    


… [a professor] appears to think it is adequate to measure poverty without
knowing…the proportion of adults....

… Economists are forever telling each other to adjust for children’s needs…

... [economic statistics with life-length data might tell us about poverty] if
we knew about prices, age structure and extra items of necessary expenditure.  

…are income statistics (adjusted for prices, age and extra items) necessary?

...income statistics should only be used where prices of staple foods (and any
changes in necessary expenditure due for example to the proportion of people in
cities, or the changing proportion of adults) are estimated.  It would help the
effort to feed hungry people...if the UK Government were to adopt some such
guidelines.     Otherwise, we will not know what the statistics mean.   

[Note:  Economic statistics on “poverty” in all large-scale studies…ignore the
facts that the proportion of adults is rising and adults need more food than
children.   The World Bank’s method for counting the global poor suffers from
this flaw.    Other things being equal, the Bank must have overestimated the
reduction in the proportion of people living on the original level of per-day
consumption considering their age and size.  A dollar a day, even if we knew its
value in food terms, would not be an appropriate measure where the proportion of
children is changing, as now.]”  


On 6 November 2003 after a session of the same Committee at Portcullis House, I
handed Gordon Brown a note.  He examined it and thanked me.  The copy I made for
myself reads as follows:

“1.PRSP [Poverty Reduction Strategy Paper] aim of reducing proportion of poor
people not sensible in countries where survival rates of poor not known to be
improving

2.PPP [Purchasing Power Parity] $1/day per person:  one problem is that no
adjustments made for changes in proportion of children.  FAO thinks average food
needs are rising.   

3.MDG indicator from WB is not sole indicator for “halving poverty” goal.  Basis
of DFID statement 2002 (29% to 23% global poor) not clear.

4.Other problems in economists’ thinking:  see email from M. Berkley to T.
Baldry 25 June.”



See also

http://www.addistribune.com/Archives/2003/11/28-11-03/Discoverer.htm 

for 

i) more errors, and 

ii) the fact that Dr Chen's co-author wrote an article in 1995 in the journal of
the Royal Economic Society saying that economists should adjust for children's
needs, and then for some reason changed his mind for the global poverty claim.

The economists’ food error was also mentioned in letters by me published in the
Taipei Times in 2003 and the Moscow Times in 2004.  

Yours sincerely 

Matt Berkley