On the 24^th of December 2022, I watched, for the second time, the living on a dollar a day documentary, which provides invaluable insights into what it means to live on less than a dollar day, which how extreme poverty was defined during the Millennium Development Goals era. Today, the World Bank defines extreme poverty as having an income of less than US$2.15 a day,  which is a revision of the initial US$1.90 a day. By implication, a person is not extremely poor if he/she earns $2.15 a day or $66.65 a month.  Could this mean that an extremely poor person who is given $2.15 a day could graduate from extreme poverty? He/she certainly could not! For this reason, the $2.15-a-day definition of extreme poverty is somewhat problematic.

For one thing, the $2.15-a-day definition does not adequately reflect extreme poverty. Extreme poverty, as I learnt from our poverty studies and interaction with people living in extreme poverty in different countries, is much more than the acute lack of income that the $2.15 a day suggests. In financial terms, it also involves having serious debt and not being able to access loans from formal financial institutions. In non-financial terms, extreme poverty includes severe material deprivation (homelessness, an acute lack of household assets etc.), a state of hopelessness, powerlessness, social exclusion, no access to healthcare and education and the inability to weather seasonal realities. All these cannot simply be reduced to a single monetary digit. The World Bank has acknowledged this and therefore developed the Multidimensional Poverty Measure (MPM) to understand poverty beyond $2.15 a day.  Admittedly, there is no perfect poverty measure or definition, as I discussed in an article here. Notwithstanding, more still needs to be done to come up with a broader definition of extreme poverty because even the Bank’s MPM covers just two additional dimensions: education and basic infrastructure.

The other problem with the $2.15-a-day definition of extreme poverty is that it is paternalistic in nature. The definition was not determined by people actually living in extreme poverty but by poverty professionals. Accordingly,  Krishna et al. (2006)  are correct in their observation, focused on poverty in Peruvian communities, that what poor people fight to get rid of is not poverty as poverty professionals define it (a certain amount of dollars a day) but what poor people themselves understand and define as poverty. This reflects a mismatch between the poverty definitions of us poverty professionals and that of poor people.

It is not enough to consider one as not extremely poor monetarily based on the $2.15-a-day definition. Within the financial dimension of poverty, in order to not be (extremely) poor, one needs to earn an income that is much more than what the ‘dollar’ poverty line suggests. By way of example, a rural poverty in Indonesia study found that in order to be poverty free, one needs to earn an income that is substantially higher than the amount of money that a poverty line stipulates. In Zimbabwe, for example, $2.15 a day or $66.65 a month is simply not sufficient to overcome or stay out of extreme poverty. Renting a decent room in a low-income residential area costs an average of USD$50. This swallows up a substantial part of the stipulated $66.65 a month and what is left would certainly not be enough to cater for food, water, electricity and other essential needs.

For the reasons stated above, we need to rethink our definition of extreme poverty. This is pertinent if we are to have success in eradicating all forms of poverty worldwide by 2030, a primary goal of the 2030 Agenda for Sustainable Development.