The Story of Poverty: Three Views

We are all getting richer and healthier

That is, according to Hans Rosling, a Swedish statistician, who’s enthusiastic description of the story the stats tell us, you can see below. Measured by average life span and income according to country over the past 200 years, the story looks pretty good.

But, there is another way of interpreting the stats.

Rosling flattens out disparity by highlighting averages. If you notice that the gap between rich and poor nations have increased dramatically, the story is not so good. If the income line represented a linear rather than exponential increase, the graphic representation of disparity would be even more apparent. Another question; to show an average income of $4000, how many below subsistence individuals balance out the millionaires and billionaires who thrive on maintaining an impoverished country?

Not withstanding Hans Rosling’s enthusiasm, and the skewed visual, the question remains; how will the laggards, the Ghanas and the Zambias, move to the upper right quadrant of the graph?

Here is another story of poverty, with all of human existence as the timeframe. The conclusion of this perspective is that extreme poverty could be eliminated world-wide with the collective will to do so. Yet, systemic global inequality maintains the status quo. The poorest countries in the world export 8-10 times the amount of income they receive in foreign aid.

Globally we are getting wealthier; at the expense of the poorest nations.

How does this inequality happen?

The story of copper in Zambia shines a light on one reason how this can be. Zambia is one of the world’s top producers of copper. Yet when world prices tripled, the country did not benefit.

How is this possible? The global leader in copper production, Swiss-based Glencore, owns a subsidiary in Zambia. Copper is sold from the subsidiary to the mother company at artificially low prices. The subsidiary is taxed in Zambia at the low price. Glencore bags the difference.

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