The International Day for the Eradication of Poverty serves as a reminder of one of the most pressing global issues while the current events worldwide underscore why this year's theme - decent work and social protection - is particularly significant. The question is not only whether we devote enough endeavours to address it, but also do we measure the prevalence of poverty and all its dimensions correctly?

Challenges in the fight against poverty

According to the latest data, nearly 700 million people on the planet live in conditions of extreme poverty, spending less than $2.15 a day. Shockingly, as per the International Labor Organization, a staggering 53% of the world's population lacks access to comprehensive social protection. These alarming figures lead us to the conclusion that decades of efforts to reduce poverty globally have not yielded sufficiently positive results. Additionally, military conflicts, the COVID-19 pandemic and its economic effects have exacerbated living conditions for many people worldwide, raising concerns about achieving the Sustainable Development Goals, especially the first and most crucial one: a world free from poverty!

"Measurement is the first step that leads to control and potential improvement... You can't manage what you can't measure", wrote the pioneer of modern management, Peter Drucker. This statement holds significant relevance in the context of the fight against poverty because understanding how to deal with this global issue requires accurately measuring its various aspects. Are we doing that correctly?

Measuring poverty in Montenegro

Like many other countries, Montenegro employs various methods to measure poverty to comprehend the problem and identify areas that require special attention. Traditionally, poverty measurement relied on the absolute poverty line, determined based on the minimum monthly expenditures for basic needs.

However, in line with European practices, Montenegro transitioned to measuring relative poverty in 2013. This method takes into account not only the absolute income of households but also income distribution and the number of household members. The key indicator of this approach is the at-risk-of-poverty rate. According to the latest data, the at-risk-of-poverty rate in Montenegro was 20.3% in 2022.

What's the difference between the poverty rate and the at-risk-of-poverty rate?

Although often used interchangeably, the poverty rate and the at-risk-of-poverty rate do not have the same meaning. The poverty rate is an indicator that encompasses all those who do not have sufficient resources to meet basic needs, including food, education, and other essentials. In contrast, the at-risk-of-poverty rate indicates how likely an individual is to fall into poverty based on income distribution in society. The first indicator reflects the actual state, while the second considers the likelihood of reaching that state. In Montenegro, the risk of poverty is particularly high among children and the unemployed, while it is lowest among employed individuals.

In addition to absolute and relative poverty measures, there is also a multidimensional approach. This approach takes into account various aspects of poverty, including health, education, access to basic living conditions (water, electricity), and many other factors. According to this approach, around 1.2% of Montenegro's population, or about 8,000 people, is classified as multidimensionally poor, while an additional 3% (18 000) fall into the category of being vulnerable to multidimensional poverty.

The significance of social protection

The fight against poverty is highly complex and requires careful measurement and understanding to develop effective strategies. Regardless of the definitions and methods we use, it is crucial to ensure that social protection policies are comprehensive, timely, and inclusive, so that no one is left behind. Decent work and adequate social protection are key elements in the effective fight against poverty in Montenegro and around the world. It is essential to emphasize that without social transfers and pensions, the at-risk-of-poverty rate in Montenegro would exceed 40%. This fact underscores the importance of adequate social protection in overcoming poverty. The lowest risk of poverty is among employed individuals, highlighting the significance of employment and the right to work as perhaps the most effective social policy.

United in the fight against poverty

UNDP has shaped social protection and policies that promote decent work in many countries. Focusing on inclusive growth, addressing deeply rooted inequalities, and aiding the transformation of the informal sector, UNDP advocates for a world where work is not just a means to an end but a path to dignity.

In Montenegro, through its programme activities, UNDP supports the Government of Montenegro in implementing the e-Social project. This project plays a crucial role in processing and timely disbursing material assistance to beneficiaries. In just three years, the number of recipients of material benefits has tripled, and disbursement amounts have dramatically increased (from 80 million euros in 2020 to almost 230 million euros in 2023). Special attention is given to activating able-bodied recipients of social support, starting from the assumption that breaking the cycle of poverty through generations can be sustainably achieved only through labor market activation and continuous skills improvement.

However, no one can do it all alone. The path to poverty eradication requires collaborative efforts. To realize the vision of sustainable development - a world without poverty, we must unite and work on inclusive policies and strategies that not only promote decent work and social protection but also create an environment where everyone gets an opportunity, without exception. Only then can we effectively measure progress and, through the application of appropriate programmes and policies, collectively address this global challenge.