Global poverty: A fall to cheer

For the first time ever, the number of poor people is declining everywhere* – Published on The Economist, March 3, 2012.

THE past four years have seen the worst economic crisis since the 1930s and the biggest food-price increases since the 1970s*. That must surely have swollen the ranks of the poor.

Wrong. The best estimates for global poverty come from the World Bank’s Development Research Group, which has just updated from 2005 its figures for those living in absolute poverty (not be confused with the relative measure commonly used in rich countries).    

The new estimates show that in 2008, the first year of the finance-and-food crisis, both the number and share of the population living on less than $1.25 a day (at 2005 prices, the most commonly accepted poverty line) was falling in every part of the world. This was the first instance of declines across the board since the bank started collecting the figures in 1981 (see chart).

The estimates for 2010 are partial but, says the bank, they show global poverty that year was half its 1990 level. The world reached the UN’s “millennium development goal” of halving world poverty between 1990 and 2015 five years early. This implies that the long-term rate of poverty reduction—slightly over one percentage point a year—continued unabated in 2008-10, despite the dual crisis … //

… The poverty data chime with other evidence. Estimates by the Food and Agriculture Organisation that the number of hungry people soared from 875m in 2005 to 1 billion in 2009 turned out to be wrong, and were quietly dropped. Derek Headey of the International Food Policy Research Institute has shown that despite the world food-price spike, people’s assessment of their own food situation in most poor and middle-income countries was better in 2008 than it had been in 2006.

Most of the progress has been concentrated among the poorest of the poor—those who make less than $1.25 a day. The bank’s figures show only a small drop in the number of those who make less than $2 a day, from 2.59 billion in 1981 to 2.44 billion in 2008 (though the fall from a peak of 2.92 billion in 1999 has been more impressive). According to Mr Ravallion, poverty-reduction policies seem to help most at the very bottom. In 1981, 645m people lived on between $1.25 and $2 a day. By 2008 that number had almost doubled to 1.16 billion. Even if many of these middling poor move up, their places are often taken by those who have just escaped from absolute poverty; population growth does the rest. The poorest of the poor seem to have escaped the worst of the post-2007 downturn. But the growth in the middling poor shows there is much to be done. (full text and statistic).

*(My comment: the bank’s estimates forgets to tell us, if poor are not simply dying out of any statistic).

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