Multidimensional Vulnerability Index (MVI) – UN

Context

The United Nations General Assembly has launched the Multidimensional Vulnerability Index (MVI), a new global tool designed to assess structural vulnerabilities and resilience in Small Island Developing States (SIDS) and other developing nations. The index aims to facilitate access to low-interest financing for these nations, though its adoption remains voluntary.

What is Vulnerability?

Vulnerability refers to the degree to which individuals, communities, or nations are susceptible to harm due to external shocks such as economic downturns, climate change, pandemics, and political instability.

Types of Vulnerability:

1. Economic Vulnerability – Dependence on external trade, debt burden, low economic diversification.

2. Social Vulnerability – Health risks, poverty, education gaps, demographic pressure.

3. Environmental Vulnerability – Exposure to climate disasters, rising sea levels, deforestation.

4. Political Vulnerability – Governance instability, regional conflicts, refugee crises.

About the Multidimensional Vulnerability Index (MVI)

Key Indicators in the MVI

The Multidimensional Vulnerability Index considers various indicators that assess a country’s resilience and risk exposure:

1. Import Dependency – Nations relying on imports for essential goods and services.

2. Exposure to Extreme Weather Events and Pandemics – Susceptibility to natural disasters and global health crises.

3. Impacts of Regional Violence and Refugee Crises – Security risks affecting development stability.

4. Demographic Pressure – Rapid population growth and migration stress.

5. Water and Arable Land Resources – Availability of freshwater and cultivable land.

6. Child Mortality Under Five – An indicator of social and healthcare vulnerabilities.

Limitations of Traditional Measures

• Gross National Income (GNI) and GDP often fail to capture the actual vulnerabilities of developing nations.

• Many SIDS and Least Developed Countries (LDCs) appear economically stable based on GDP, but are highly fragile due to climate change, debt crises, and social instability.

• Traditional indicators hinder access to necessary development financing.

Applications of the MVI

The MVI will assist in:

✅ Guiding Development Programs – Helps international organizations prioritize funding for vulnerable nations.
✅ Debt Management Strategies – Nations can negotiate concessional loans and financial aid.
✅ Sustainable Development Planning – Supports policy-making in resilience building.

Significance of the MVI for Developing Nations

1. Ensuring Equitable Financing – Helps nations qualify for low-interest loans and grants.

2. Better Climate Adaptation – Directs funds toward climate resilience projects.

3. Improving Governance & Policy Planning – Provides data for effective policy formulation.

4. Reducing Debt Stress – Supports countries facing high debt burdens and economic instability.

Other Similar Indices: National MPI (Multidimensional Poverty Index)

What is the National MPI?

• The Multidimensional Poverty Index (MPI) measures poverty beyond income levels, assessing deprivations in health, education, and standard of living.

• It is developed using the Alkire-Foster Methodology and published by NITI Aayog using NFHS (National Family Health Survey) data.

• The Global MPI, published by Oxford Poverty and Human Development Initiative (OPHI) & UNDP, evaluates global multidimensional poverty trends.

Indicators and their Weights

1. Health (1/3)
   • Nutrition – 1/6
   • Child and Adolescent Mortality -1/12
   • Maternal Health – 1/12
2. Education (1/3)
   • Years of Schooling – 1/6
   • School Attendance -1/6
3. Standard of Living (1/3)
   • Cooking Fuel – (1/21)
   • Sanitation – (1/21)
   • Drinking Water – (1/21)
   • Housing – (1/21)
   • Electricity – (1/21)
   • Assets – (1/21)
   • Bank Account – (1/21)

Key Features of India’s National MPI

1. Decline in Poverty Headcount Ratio (HCR) – Fewer people now live below the poverty line.

2. Improvement Across All 12 MPI Indicators – Indicators like nutrition, child mortality, sanitation, education levels have improved.

3. Faster Reduction in Poverty in Poorer States – States like Bihar and Uttar Pradesh have seen rapid poverty reduction.

4. Achievement of SDG Target 1.2 – India is expected to meet the Sustainable Development Goal (SDG) 1.2 target before 2030.

5. Role of Government Initiatives –

   • Health: Poshan Abhiyan, Anaemia Mukt Bharat

   • Food Security: National Food Security Act (NFSA), Pradhan Mantri Garib Kalyan Anna Yojana

   • Livelihood: MNREGA, PM Awas Yojana

Comparison: MVI vs. MPI

Relevance for UPSC

✅ Prelims:

• Questions on MVI, MPI, and UN indices.

• Government schemes related to poverty reduction, climate resilience, and financing models.

✅ Mains (GS2 & GS3):

• Vulnerability of Developing Nations – Role of international financial institutions.

• Climate Change & Debt Burden – How financing models impact SIDS and LDCs.

• Poverty Reduction in India – NITI Aayog’s MPI findings and government initiatives.

✅ Interview:

• Application of MVI in climate finance negotiations.

• India’s progress in poverty alleviation through MPI strategies.

Conclusion

The Multidimensional Vulnerability Index (MVI) is a significant step in addressing the challenges faced by developing nations and SIDS. By recognizing economic, social, and environmental risks, it ensures better access to concessional financing and sustainable development programs. Meanwhile, the National MPI provides a detailed insight into poverty alleviation efforts in India. Understanding these indices is crucial for policymakers, economists, and UPSC aspirants aiming to grasp the dynamics of global and national development policies.