28 August 2008
New estimates from the World Bank reveal that there are more poor people in the world than previously thought.
The World Bank has updated its global poverty estimates, which now reveal that while overall global poverty has declined since 1981, there are more poor people today than previously estimated.
The World Bank's new estimates show that 1.4 billion people (one in four) were living on less than $1.25 a day in 2005, a decrease from 1.9 billion in 1981 (one in two). Last year however, the World Bank said that there were 1 billion people living below the previous $1 a day poverty-line bench mark.
According to Reuters, the World Bank increased its poverty mark due to the rise in the cost of living in developing countries. Martin Ravallion, director of the World Bank's Development Research Group stated that the new estimates "are a major advance in poverty measurements because they are based on far better price data for assuring that the poverty lines are comparable across countries." Ravallion added that that the new information, expressed as internationally comparable rates known as purchasing power parities (PPPs), show that the "cost of living in the developing world is higher than we thought."
Much of the decline in poverty has occurred in East Asia, which is mostly due to the rise of China, who's poverty rate plunged from 80% of the population living on less than $1.25 a day in 1981 to 18 percent in 2005 (about 330 million). In contrast, sub-Saharan Africa has shown no sustained decline in poverty since 1981. The World Bank's estimates show that in absolute terms, the region's poverty level has doubled from 200 million in 1981 to 380 million in 2005.
"The sobering news that poverty is more pervasive than we thought means we must redouble our efforts, especially in sub-Saharan Africa," said Justin Lin, the new chief economist of the World Bank, to Reuters. Lin added that while the world was still on target to meet the United Nations goal of halving the number of people in poverty by 2015, when China is excluded, that number falls short of the targets.
Reuters noted that the new figures come ahead of an updated assessment of progress in meeting the U.N.'s Millennium Development Goals, which will be released late next month at a meeting of the U.N. General Assembly.
Sources
More people living below poverty line, By Lesley Wroughton, August 27, 2008 (Reuters website
The bottom 1.4 billion, The Economist, August 28, 2008 (The Economist website)
World Bank Updates Poverty Estimates for the Developing World, August 26, 2008 (World Bank website)
New Data Show 1.4 Billion Live On Less Than Us$1.25 A Day, But Progress Against Poverty Remains Strong, World Bank Press Release, August 26, 2008 (World Bank website)
The developing world is poorer than we thought, but no less successful in the fight against poverty, by Shaohua Chen and Martin Ravallion, World Bank Working Paper Series no. 4703, August 2008 (World Bank website)