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02.03.2012 General News

Extreme poverty declined

By Ghanaian Chronicle
Extreme poverty declined
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The World Bank has announced that in every region of the developing world, the percentage of people living on less than $1.25 a day, and the number of poor declined between 2005-2008.

This across-the-board reduction over a three-year monitoring cycle marks the first, since the Bank began monitoring extreme poverty.

According to the Bank, an estimated 1.29 billion people in 2008 lived below $1.25 a day, equivalent to 22 percent of the population of the developing world.

By contrast, in 1981, 1.94 billion people were living in extreme poverty. The update draws on over 850 household surveys in nearly 130 countries. 2008 is the latest date for which a global figure can be calculated.

This is because, while more recent statistics for middle income countries are available, for low-income countries, new data are either scarce or not comparable with previous estimates.

More recent post-2008 analysis reveals that, while the food, fuel and financial crises over the past four years had at times sharp negative impacts on vulnerable populations and slowed the rate of poverty reduction in some countries, global poverty overall kept falling.

In fact, preliminary survey-based estimates for 2010based on a smaller sample size than in the global up date indicate that the $1.25 a day poverty rate had fallen to under half of its 1990 value by 2010.

This would mean that the first Millennium Development Goal of halving extreme poverty from its 1990 level has been achieved before the 2015 deadline.

The developing world, as a whole, has made considerable progress in fighting extreme poverty, but the 663 million people who moved above the poverty lines, typical of the poorest countries are still poor by the standards of middle- and high-income countries.

This bunching up just above the extreme poverty line is indicative of the vulnerability facing a great many poor people in the world. And at the current rate of progress, around 1 billion people would still live in extreme poverty in 2015.

Martin Ravallion, director of the Banks Research Group and leader of the team that produced the numbers said. The $1.25 poverty line is the average for the world's poorest 10 to 20 countries.

A higher line of $2 a day (the median poverty line for developing countries) reveals less progress versus $1.25 a day.

Indeed, there was only a modest drop in the number of people living below $2 per day between 1981 and 2008, from 2.59 billion to 2.47 billion, though falling more sharply since 1999.

“Having 22 percent of people in developing countries still living on less than $1.25 a day and 42 percent with less than $2 a day is intolerable.  We need to increase our efforts.

'On the policy and program side, we need to continue attacking poverty on many fronts, from creating more and better jobs, to delivering better educational and health services and basic infrastructure, to protecting the vulnerable.

'And on the measurement side, countries need to expand data collection and strengthen statistical capacity, particularly in low-income countries,  Jaime Saavedra, director of the World Banks Poverty Reduction and Equity Group explained'.

East Asia and the Pacific: About 14 percent of its population lived below US$1.25 a day in 2008, down from 77 percent in 1981, when it was the region with the highest poverty rate in the world. In China, 13 percent, or 173 million people, lived below $1.25 a day in 2008. East Asia achieved MDG1 about 10 years ago.

In the developing world outside China, the extreme-poverty rate was 25 percent in 2008, down from 41 percent in 1981. The number of people living in extreme poverty, however, was about the same in 2008 as 1981 at around 1.1 billion, after rising in the 1980s and 1990s and falling since 1999.

South Asia: The $1.25 a day poverty rate fell from 61 percent to 36 percent between 1981 and 2005 and fell a further 3.5 percentage points between 2005 and 2008. The proportion of the population living in extreme poverty is now the lowest since 1981.

 Latin America and the Caribbean: From a peak of 14 percent living below $1.25 a day in 1984, the poverty rate reached its lowest value so far of 6.5 percent in 2008. The number of the poor rose until 2002 and has been falling sharply since.

Middle East and North Africa: The region had 8.6 million people or 2.7 percent of the population living on less than $1.25 a day in 2008, down from 10.5 million in 2005 and 16.5 million in 1981.

Eastern Europe and Central Asia: The proportion living on less than $1.25 is now under 0.5 percent, having peaked at 3.8 percent in 1999. 2.2 percent lived on less than $2 a day in 2008, down from a peak of 12 percent in 1999.

Sub-Saharan Africa: For the first time since 1981, less than half of its population (47%) lived below $1.25 a day. The rate was 51% in 1981. The $1.25-a-day poverty rate in Sub-Saharan Africa has fallen 10 percentage points since 1999. Nine million fewer people live below $1.25 a day in 2008 than 2005.


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