[Part 4]In a small village tucked between the hills of northern England, there lived an old woman named Agnes. She owned little—just a stone cottage with a leaking roof and a fireplace that only worked when the wind allowed it. Every Sunday, she would bake a single loaf of bread, enough to last her the week.One particularly harsh winter, a boy from the neighbouring farm knocked on her door, shivering, his shoes held together with twine. He didn’t ask for anything—he simply stood there, hoping.Without a word, Agnes tore her loaf in half and handed him the warmest side. “It’s not much,” she said, “but it’ll fight the cold a little.”Years passed, and the village changed. Roads were paved, shops replaced fields, and that boy—now a grown man—returned as the town’s mayor. On the day of his inauguration, he ended his speech not with promises, but with a memory.“I learned what dignity means not from wealth or power,” he said, “but from an old woman who gave me half her bread and made me feel like I was worth something.”Martin Ravallion's The Economics of Poverty (2016, Oxford University Press) presents a sweeping and meticulous exploration of how poverty has been understood, measured, and addressed across both time and geography. Drawing upon decades of fieldwork and empirical research, Ravallion does not merely treat poverty as a static economic condition but rather as a deeply contextual and historically contingent phenomenon. He maps the intellectual evolution of poverty—from early philosophical and moral discourses to the statistical and econometric tools used in today's policy circles.What sets the book apart is its ability to bridge theory and practical application. Ravallion evaluates the effectiveness of global anti-poverty policies, from cash transfers and workfare to microfinance and education programmes. He also addresses the difficult question of how poverty should be measured—highlighting the political and ethical dilemmas that arise when defining who qualifies as “poor.”The book is especially notable for its refusal to simplify. It reminds the reader that poverty is not only about income deprivation but also about lack of opportunity, social exclusion, and institutional neglect. Ravallion warns against one-size-fits-all solutions, urging instead for policies grounded in local realities and informed by empirical evidence. His approach challenges both the complacency of development optimists and the fatalism of cynics.Ravallion treats poverty not merely as an economic issue but as a layered historical, moral, and policy-driven challenge. Historically, the book traces how societies have perceived and responded to poverty over time. In pre-modern eras, poverty was often seen as a natural condition of life, something to be endured or morally judged. Religious traditions frequently framed it as either a test of faith or a consequence of sin. The Industrial Revolution shifted the discourse: poverty became increasingly viewed through the lens of social reform and structural inequality, with thinkers like Marx and Mill offering competing interpretations. Ravallion shows how poverty gradually moved from the realm of charity to the responsibility of the state, especially during the rise of welfare systems in the twentieth century.From a moral perspective, Ravallion challenges readers to question what is “fair” and “just” in a world of massive disparities. He critiques both fatalism—the belief that poverty is inevitable—and the blind faith in market forces to resolve all social problems. Instead, he promotes an ethical imperative: that societies have a collective duty to ensure everyone has the opportunity to live a dignified life. He warns against moral relativism in policy-making, where technocrats focus on efficiency while overlooking human suffering. For Ravallion, tackling poverty is as much about moral clarity as it is about economic tools.On public policy, Ravallion examines how governments and international institutions have designed and implemented anti-poverty strategies. He explores the tension between universalism and targeting, between growth-focused models and direct redistribution. He critiques the common obsession with "trickle-down" economics and calls for evidence-based interventions that are context-specific. Whether it's conditional cash transfers, education subsidies, or rural employment programmes, he insists that no policy works in a vacuum. Success depends on good governance, reliable data, and genuine political will. His analysis makes clear that public policy is not neutral—it reflects values, priorities, and power dynamics.In essence, Ravallion’s work is not just a manual for economists—it is a call for moral clarity and political commitment. It underscores that eradicating poverty is not simply a matter of budgets and statistics, but of values, choices, and power.In Handbook on Poverty and Inequality by Jonathan Haughton and Shahidur R. Khandker (2009, The International Bank for Reconstruction and Development/The World Bank), poverty is not perceived merely as a lack of income, but as a multidimensional condition that deprives individuals of the ability to lead a life they value. Haughton and Khandker emphasise that poverty encompasses material deprivation, limited access to education and health, vulnerability to shocks, social exclusion, and powerlessness.The authors argue that understanding poverty requires a systematic approach, one that quantifies its extent through poverty lines and indexes while also delving into its qualitative nature—how people experience and perceive their condition. They stress the importance of disaggregating poverty data by gender, geography, and other social factors to capture the uneven ways in which poverty manifests.Rather than viewing the poor as passive victims, the handbook frames them as active agents within constrained environments. It advocates for evidence-based policies rooted in empirical analysis, arguing that meaningful poverty reduction must involve more than just handouts; it requires structural transformation, inclusive institutions, and long-term investments in human capital.At its core, the book encourages analysts and policymakers to move beyond simplistic definitions and adopt a holistic lens that considers poverty as both an economic and a human development issue.In the book, the relationship between poverty and inequality is described as deeply intertwined yet analytically distinct. The authors explain that while poverty refers to an absolute lack of resources—such as income, education, or health—inequality concerns how unequally these resources are distributed across a population.They argue that a country can experience declining poverty rates while inequality increases, or conversely, a nation may exhibit modest levels of inequality but still suffer from widespread poverty. Inequality influences the depth and persistence of poverty, particularly when wealth and opportunities are concentrated in the hands of a few. In such contexts, even when the economy grows, the benefits often bypass the poorest segments of society.Haughton and Khandker highlight that high inequality can hinder the effectiveness of poverty reduction strategies. It limits the capacity of the poor to access opportunities and participate fully in economic life. Furthermore, inequality often leads to weaker social cohesion and greater political instability, which in turn exacerbates poverty.The book encourages policymakers to address both issues in tandem. Focusing solely on poverty alleviation without tackling inequality may lead to temporary gains that are neither inclusive nor sustainable. Thus, poverty and inequality are portrayed as two sides of the same coin—both requiring deliberate and coordinated policy responses.Seth Donnelly’s The Lie of Global Prosperity: How Neoliberals Distort Data to Mask Poverty and Exploitation (2020, Monthly Review Press) offers a bold and deeply unsettling challenge to the dominant neoliberal claim that global poverty has been dramatically reduced in recent decades. Rather than celebrating the so-called decline in poverty, Donnelly exposes how international institutions—particularly the World Bank—use questionable statistical tools to construct an illusion of progress. By anchoring global poverty to a daily income threshold of just $1.90, these institutions not only downplay the brutal realities of economic hardship but also obscure the ongoing exploitation embedded within global capitalism.Donnelly argues that the $1.90 poverty line is not a measure rooted in human dignity or basic needs. Instead, it is a convenient political fiction—one that allows neoliberal policymakers and global elites to proclaim victory while millions still live without adequate food, shelter, or healthcare. In vivid detail, the book traces how globalisation, debt, and resource extraction continue to impoverish nations like Haiti, even as official data paint a rosy picture.Importantly, Donnelly’s work is not just academic; it is activist. It is a rallying cry to dismantle the data myths that mask exploitation, and to re-centre the lived experiences of the global poor. For those committed to justice, this book reminds us that what looks like prosperity from above often feels like poverty from below.Donnelly argues that neoliberal institutions have mastered the art of manipulating data to tell a comforting story about poverty—a story that reassures elites and policymakers while concealing the brutal truth. The central strategy involves redefining poverty using an absurdly low international poverty line, most commonly set by the World Bank at $1.90 per day.This threshold, Donnelly explains, is not based on what a human being actually needs to live a dignified life, but rather on what is statistically convenient. It allows global institutions to declare that extreme poverty is falling, even though vast numbers of people still lack access to basic necessities like clean water, nutrition, housing, and medical care.Moreover, Donnelly exposes how these figures are adjusted through mechanisms such as Purchasing Power Parity (PPP), which can disguise the true cost of living for the poor in different countries. As a result, the data creates an illusion of progress while people continue to suffer under exploitative global economic structures—structures often driven by debt, resource extraction, and cheap labour in the Global South.By reducing poverty to a narrow, numerical benchmark, neoliberals can claim victory in the fight against poverty without addressing the systems that perpetuate inequality and human misery. Donnelly calls this a dangerous form of "data propaganda"—a way to silence resistance, neutralise critique, and sustain the illusion that capitalism is working for everyone.Seth Donnelly’s critique of how neoliberal institutions distort global poverty data resonates sharply with how poverty is often presented in countries like Indonesia. In Donnelly’s view, the manipulation begins with how poverty is defined—by setting the bar so low that millions who live in precarity are excluded from the data. This practice is not limited to global organisations; it is echoed by national governments keen to project a narrative of development and success.In Indonesia, official poverty statistics frequently cite improvements based on minimal income thresholds, often calculated just above the basic food and energy requirements. This framing enables policymakers to claim that poverty is declining, even though the lived reality tells a different story. Entire communities still lack clean water, secure housing, stable employment, or access to affordable healthcare and education—yet they are statistically “not poor.”Moreover, the data is often presented in abstract percentages that obscure regional disparities, gender inequality, and structural injustices. Urban poverty is sanitised by averages, while rural hardship is rendered invisible by generalisations. Like Donnelly argues, these statistical narratives are not innocent—they serve to legitimise the economic status quo, silence dissent, and discourage deeper reforms.In essence, Indonesia’s use of poverty data can function as a localised version of what Donnelly calls “data propaganda”—not a deliberate lie, perhaps, but a strategic simplification that shields systemic inequality from scrutiny. It allows governments to perform prosperity while sidestepping the harder questions: Who defines poverty? Who benefits from its denial?Recent data demonstrates that poverty rates in Indonesia have indeed experienced a decline, albeit not reaching the ideal targets set forth. In March 2024, the percentage of impoverished citizens was recorded at 9.03%, representing a decrease from the 9.36% figure documented in March 2023, with the total number of people living in poverty standing at approximately 25.22 million individuals. By September 2024, the poverty rate had further diminished to 8.57%, equivalent to roughly 24.06 million people, marking a reduction of approximately 3.67 million individuals compared to previous figures.This reduction has occurred despite considerable challenges remaining, particularly concerning extreme poverty which, whilst decreasing, continues to affect a substantial number of people, with approximately 6 million individuals still living in such conditions. The government continues to implement various social assistance programmes and income enhancement initiatives to accelerate the reduction of poverty levels.In essence, the number of impoverished people in Indonesia has indeed decreased over recent years, though this reduction has not been optimal and continues to face various challenges. Nevertheless, there exists criticism regarding the poverty line utilised by the Central Statistics Agency (BPS), which differs from international standards, suggesting that official poverty figures may not entirely reflect the genuine economic conditions of society, where many individuals continue to experience financial hardships.The Central Statistics Agency (BPS) employs a poverty line standard calculated on the basis of the cost of basic needs approach, whereby impoverished households allocate approximately 75% of their expenditure to food requirements and 25% to non-food necessities, utilising a commodity composition that has remained virtually unchanged since 1998. This poverty line is calculated from the minimum expenditure required for food and non-food necessities to avoid being categorised as impoverished, with the September 2024 poverty line set at Rp595,242 per capita per month, of which 74.5% represents contributions from food requirements.Meanwhile, the international standard employed by the World Bank utilises a Purchasing Power Parity (PPP) approach that accounts for price differences in basic necessities between countries, with the extreme poverty line set at approximately $1.90 per day (equivalent to roughly Rp12,000 per capita daily), whilst advocating for an increase in standards to $3.2 or higher in accordance with middle-income country status. The BPS standard tends to be lower compared to World Bank standards because it has not fully adjusted the composition of non-food expenditure, which has now substantially increased, and has not significantly updated the commodities included in calculations for an extended period.In summary, the principal difference lies in BPS employing a standard based on basic needs expenditure calculated in rupiah using an outdated composition, whilst international standards utilise a more dynamic PPP approach that adjusts for purchasing power between countries. This results in BPS poverty figures typically being lower than those calculated using international standards.When employing the World Bank's international standards, the number of impoverished individuals in Indonesia proves to be considerably greater than the official figures reported by the Central Statistics Agency (BPS). The BPS records a poverty rate of approximately 8.57%, equivalent to roughly 24 million people as of September 2024, with a poverty line of approximately Rp595,000 per capita per month. However, the World Bank utilises a higher poverty line standard based on Purchasing Power Parity (PPP) and harmonisation between countries.According to research studies, if one were to apply more realistic international standards equivalent to those used for neighbouring countries such as Timor-Leste, Indonesia's poverty rate could reach approximately 30% of the total population, significantly exceeding the official BPS figure of merely 8%. This would indicate that the actual number of impoverished individuals could reach approximately 80 million people or more, rather than the reported 24 million.This discrepancy occurs because the BPS employs a poverty line standard that has been longstanding and tends to be relatively low, whilst the World Bank and international standards account for living costs and purchasing power that more accurately reflect current conditions and international comparisons. So, when utilising the World Bank's international standards, the number of impoverished citizens in Indonesia could be threefold greater than the official BPS figures, representing approximately 30% of the population.According to Seth Donnelly, one of the most damaging consequences of “local data propaganda” is that it distorts public perception and paralyses political will. When official statistics are manipulated to suggest that poverty is declining—despite overwhelming lived evidence to the contrary—governments are absolved of the responsibility to enact deeper structural reforms. It creates an illusion of progress that pacifies public outrage, neutralises criticism, and reduces poverty to a bureaucratic checkbox rather than a human emergency.This false narrative also weakens solidarity. When poverty is underreported or cosmetically reduced on paper, those who are still struggling become socially invisible. Their voices are silenced not by force, but by omission. As Donnelly notes, this invisibility serves the powerful: it allows elites to maintain exploitative systems while claiming they are delivering prosperity.Moreover, this statistical propaganda provides cover for austerity policies, privatisation, and continued neoliberal reforms. When governments cite low poverty rates, they can justify cutting welfare, slashing subsidies, or privatising essential services—all in the name of “efficiency” or “growth.”Ultimately, Donnelly warns, this approach corrodes democracy itself. If the people are misled about the reality of their own suffering, they are stripped of the knowledge needed to demand justice. When data becomes a tool of illusion, poverty becomes harder to see, harder to fight, and much easier to ignore.
[Part 2]
