Extreme Poverty Drops Below a Billion

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According to the World Bank, the number of people living on less than $1 a day has fallen below 1 billion.

New estimates from the World Bank show a continuous decline in world poverty rates during the first four years of this century. According to the annual World Development Indicators (WDI) report, the number of people living in extreme poverty (subsisting on a daily income of less than US$1) fell 18.4 percent between 2000 and 2004, to an estimated 985 million. This marks a clear decline since 1990, when the number was 1.25 billion. The number of people living on less than US$2 a day is also falling steadily, though this population still accounted for half the developing world in 2004, according to the Bank.

The World Bank attributes the worldwide decline in poverty rates to the average 3.9 percent annual growth in gross domestic product (GDP) across the developing world. East Asia, the world’s most populous region, achieved an astounding 9 percent reduction in poverty since 1990. But declines in poverty did not always accompany increases in national income, the report notes. In some countries, the gap between rich and poor increased as factors including high unemployment rates, inadequate education, and health detriments prevented poorer populations from having equal access to the benefits of economic expansion.

Commenting on the limitations of economic data in reflecting the quality of livelihoods, World Bank chief economist and senior vice president François Bourguignon observed, “Growth is essential to reducing poverty, but it isn’t the only factor.” He noted that the 2007 WDI report goes beyond growth and poverty rates to ask how income is distributed, whether health care and education are improving, and to assess the business environment—all factors that affect the quality of people’s lives.

The WDI report expands on poverty data by providing statistics on a wide array of indicators, including health expenditures, transport and other infrastructure services, quality of public sector management, internet access, access to improved water sources, and levels of carbon dioxide emissions. This year, new governance indicators and information on the effectiveness of country policies and institutions were also included in the assessment.

Despite the robustness of the analysis presented in the WDI report, the World Bank acknowledges that gaps remain in statistics from the poorest countries. “We are working with our international partners and developing countries to improve the quality and availability of statistics covering every aspect of development,” said Shaida Badiee, director of the Bank’s Development Data Group.

 

This story was produced by Eye on Earth, a joint project of the Worldwatch Institute and the blue moon fund. View the complete archive of Eye on Earth stories, or contact Staff Writer Alana Herro at aherro [AT] worldwatch [DOT] org with your questions, comments, and story ideas.