Global Poverty

A New Year’s Wish: This Joyful Trend in World Poverty Continues

Todd A. Watkins

by Todd A. Watkins

It’s a New Year and I’m hopeful; that hope I get from one of the most amazing poverty statistics out there. You wouldn’t know it from the constant barrage of bad news and images from around the world, but world poverty is taking a serious long term beat-down.

The World Bank estimates that there are 2.2 billion people worldwide living on $2 or less, of which about half—more than 1 in 6 people on earth—are living on $1.25 a day or less.[i] Clearly, poverty is a widespread problem.

The good news, thankfully, is that poverty has been decreasing remarkably and steadily for many decades. As this graph I made from World Bank data shows, from 1981 to 2011, the proportion of people living on $1.25 a day or less (adjusted for inflation) declined more than 1 percentage point a year from more than half (!) the world’s population to below 17 percent. Amazing progress.

Can it continue?

World’s steadily declining poverty rate

Global Poverty TrendsData source: World Bank, PovcalNet database. http://iresearch.worldbank.org/PovcalNet/index.htm?1

Maybe. However, the steady improvement, and poverty more generally, is not spread evenly throughout the world. As we see in the second graph, poverty has historically been concentrated in South and East Asia as well as in Africa, and it can vary widely even between countries within a region. The decline within East Asia has been particularly extraordinary. Economic growth in China has contributed substantially to this decrease. In 1981, 84 percent of the Chinese population was living at or below the $1.25 poverty line. By 2002 that had fallen to 28 percent. Today, that number is around 6 percent.[ii]

Numbers of people in extreme poverty, by region

Global Poverty Trends by RegionData source: World Bank, PovcalNet database. http://iresearch.worldbank.org/PovcalNet/index.htm?1

South Asia’s poverty decline accelerated a couple decades after China’s, driven largely by economic growth in India and Pakistan. The South Asian poverty rate has fallen to about 1 in 4 people, from 3 in 5 in 1981. Even so, large populations there mean that 400 million are still living in extreme poverty in South Asia.

Sub-Saharan Africa lies in stark contrast. The overall fraction of people in poverty there did decline slightly, from 53 percent in 1981 to below 47 percent today. However, the population has grown faster, meaning that the actual number of Sub-Saharan Africans living in poverty has nearly doubled. Indeed for the first time, Sub-Saharan Africa has more people living below $1.25 than any other region, more than 415 million.

So here’s a more focused New Year’s wish: that Africa will put poverty on its heals soon too.

 

[i] World Bank. Poverty and Equity Data. http://povertydata.worldbank.org/poverty/home/

[ii] World Bank, PovcalNet database. http://iresearch.worldbank.org/PovcalNet/index.htm?1

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