Ethiopia Ranked 2nd: 10 Poorest Countries in The World

July 30, 2013

The African Economist

You probably heard that Ethiopia has been a fast growing economy in the content recording very high growth rate not just in Africa but the world as well. Yet the new measurement known as the Multidimensional Poverty Index, or MPI, that will replace the Human Poverty index in the United Nations’ annual Human Development Report says that Ethiopia has the second highest percentage of people who are MPI poor in the world, with only the west African nation of Niger fairing worse. This comes as more international analysts have also began to question the accuracy of the Meles government’s double digit economic growth claims and similar disputed government statistics referred by institutions like the IMF.

1. Niger
2. Ethiopia
3. Mali
4. Burkina Faso
5. Burundi
6. Somalia
7. Central African Republic
8. Liberia
9. Guinea
10. Sierra Leone

What is the MPI?

People living in poverty are affected by more than just income. The Multidimensional Poverty Index (MPI) complements a traditional focus on income to reflect the deprivations that a poor person faces all at once with respect to education, health and living standard. It assesses poverty at the individual level, with poor persons being those who are multiply deprived, and the extent of their poverty being measured by the range of their deprivations.

The MPI can be used to create a vivid picture of people living in poverty, both across countries, regions and the world and within countries by ethnic group, urban/rural location, or other key household characteristics. It is the first international measure of its kind, and offers an essential complement to income poverty measures because it measures deprivations directly. The MPI can be used as an analytical tool to identify the most vulnerable people, show aspects in which they are deprived and help to reveal the interconnections among deprivations.

Why is the MPI useful?

According to the UNDP report, the MPI is a high resolution lens on poverty – it shows the nature of poverty better than income alone. Knowing not just who is poor but how they are poor is essential for effective human development programs and policies. This straightforward yet rigorous index allows governments and other policymakers to understand the various sources of poverty for a region, population group, or nation and target their human development plans accordingly. The index can also be used to show shifts in the composition of poverty over time so that progress, or the lack of it, can be monitored.

The MPI goes beyond previous international measures of poverty to:

• Show all the deprivations that impact someone’s life at the same time – so it can inform a holistic response.
• Identify the poorest people. Such information is vital to target people living in poverty so they benefit from key interventions.
• Show which deprivations are most common in different regions and among different groups, so that resources can be allocated and policies designed to address their particular needs.
• Reflect the results of effective policy interventions quickly. Because the MPI measures outcomes directly, it will immediately reflect changes such as school enrolment, whereas it can take time for this to affect income.