World Bank sees progress against poverty

Source: BusinessLive

The World Bank says the number of people living in extreme poverty in the developing world has declined for the first time since it began monitoring extreme poverty, however it insists that more still needs to be done.
According to the bank, an estimated 1.29 billion people, equivalent to 22% of the population of the developing world, lived on less than US$1.25 a day a 2008.
It said that this was in contrast to the 1.94 billion people who lived in extreme poverty in 1981.
The bank said that 2008 was the latest date for which a global figure could be calculated; this was because, while more recent statistics for middle income countries were available, for low-income countries newer data were either scarce or not comparable with previous estimates.
Recent post-2008 analysis revealed that, while the food, fuel and financial crises over the past four years had at times sharp negative effects on vulnerable populations and slowed the rate of poverty reduction in some countries, global poverty overall kept falling.
Preliminary survey-based estimates for 2010 – based on a smaller sample size than in the global update, indicated that the $1.25 a day poverty rate had fallen to under half of its 1990 value by 2010.
The World Bank said this was an indication that the first Millennium Development Goal of halving extreme poverty from its 1990 level had 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 World Bank’s research group said.
The World Bank said it used the $1.25 poverty line as the average for the world’s poorest 10 to 20 countries, as the higher line of $2 a day, mostly used as a median poverty line for developing countries, revealed less progress versus the $1.25 a day level.
Based on the median poverty line, the bank found 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 this had fallen more sharply since 1999.
“Having 22% of people in developing countries still living on less than $1.25 a day and 42% with less than $2 a day is intolerable. We need to increase our efforts. On the policy and programme 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,” Jaime Saavedra, director of the World Bank’s poverty reduction and equity group said.
According to the World Bank, the research was based on average consumption and income, adjusted for inflation within countries, and including the purchasing power differences across countries.
The findings indicated that about 14% of the population in East Asia and the Pacific, lived below $1.25 a day in 2008, down from 77% in 1981, when it was the region with the highest poverty rate in the world, while in China 13%, or 173 million people, lived below that level in 2008.
In the rest of the developing world outside of China, the extreme-poverty rate was 25% in 2008, down from 41% in 1981, and that the number of those living in poverty, however, remained the same in 2008 as 1981 at around 1.1 billion, after rising in the 1980s and 1990s and falling since 1999.
In southern Asia, the $1.25 a day poverty rate fell from 61% to 36% between 1981 and 2005 and fell a further 3.5 percentage points between 2005 and 2008, and that the proportion of the population living in extreme poverty is now the lowest since 1981.
The rate of people living in poverty in Latin America and the Caribbean fell from a peak of 14% to reach its lowest levels of 6.5% in 2008, indicating the number of the poor only rose until 2002, and has been falling sharply since.
The Middle East and North Africa had 8.6 million people, or 2.7% 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.
In Eastern Europe and central Asia, the proportion living on less than $1.25 is now under 0.5%, having peaked at 3.8% in 1999. About 2.2% lived on less than $2 a day in 2008, down from a peak of 12% in 1999.
And in sub-Saharan Africa (S-SA), for the first time since 1981, 47% of the population lived below $1.25 a day, down from 51% in 1981.
According to the World Bank, the $1.25-a-day poverty rate in S-SA has fallen by 10 percentage points since 1999, and that nine million fewer people lived below $1.25 a day in 2008 than 2005.