How Poverty Shrinks Globally by The Globalist

As recently a 1981, 52.2% of developing countries' population lived in extreme poverty.

The Globalist Quiz > Global Development How Poverty Shrinks Globally
By The Globalist \| Friday, April 20, 2012

With the annual Spring Meetings of the World Bank taking place this weekend in Washington, D.C., the world's focus will all too briefly shift to the fight against poverty in the developing world. There are signs of progress, but there are also concerns about the impact of the global financial crisis. We wonder: What is the share of the population of developing countries that now lives in extreme poverty?

Answers:

A. Over half
B. About one-third
C. About one-fifth

A. Over half is not correct.

As recently a 1981, 52.2% of the population living in developing countries lived in extreme poverty. The World Bank defines this status as people living on no more than $1.25 a day (in constant dollars). Back in 1981, the total number of people living in extreme poverty was 1.94 billion.

Even today, the level of extreme poverty in Sub-Saharan Africa is still around that level, at 47% as of 2008 (the latest data available). However, many countries around the world — not just China, as is often assumed — have made big strides in reducing poverty levels.

Mexico's extreme poverty rate, for example, fell from 19% in 1999 to only 5%. And even in Ethiopia, Africa's second most-populous country, the level of extreme poverty fell by over 30 percentage points in a decade, from 86% in 1999 to 54% in 2008.

B. About one-third is not correct.

As recently a 1999, 34.7% of the population in developing countries lived in extreme poverty. That year, the total number of very poor people was 1.74 billion. The decline in percentage terms is all the more impressive, as the size of the developing world's population has increased by about 2.3 billion people since 1981, or by 66%.

Still, in the developing world outside China, the absolute number of people in extreme poverty — at 1.1 billion — is still the same as it was in 1981. While that number was on the rise in the 1980s and 1990s, it has been falling since 1999.

In the Middle East, extreme poverty is down to 2.7% of the population. In East Asia, it is down to about 14%, and in South Asia 36%.

C. About one-fifth is correct.

As of 2008, 22.4% of the population in developing countries — or 1.29 billion people — lived in extreme poverty. That is roughly equivalent to the current population of China.

Indications are that the steady decline of extreme poverty in the developing world has not been halted by the global financial crisis. It is estimated that the incidence of extreme poverty in developing countries had fallen to 20% by 2010.

That would not only move another 100 million people out of extreme poverty, but also mean that the first of the UN's Millennium Development Goals — cutting extreme poverty in half from its 1990 level — can been achieved before the 2015 deadline. Moreover, the absolute number of extremely poor people in developing countries is steadily decreasing to the one-billion level.