When the prices of food and oil on the world market eventually peak, and there is no indication that this will happen any time soon, there will be millions more poverty-stricken people, particularly in developing countries – not that this is totally unexpected. In a report released earlier this week, the World Bank said newly available cost-of-living data had revealed that poverty had been more widespread across the developing world over the past 25 years than previously estimated.
“An earlier estimate of poverty—of 985 million living below the former international poverty line of [US] $1 a day in 2004, down from 1.5 billion in 1981—was based on 1993 cost-of-living data which was the best available at the time,” the report said.
“The new poverty numbers, which show that 400 million more people lived below the poverty line in 2005 than earlier thought, are benchmarked to the revised international poverty line of [US] $1.25 a day in 2005 prices. This line is a good standard for assessing extreme poverty because it is the average of the national poverty lines for the world’s poorest 10 to 20 countries.”
The report said that the new estimate was compiled using 675 household surveys based on 1.2 million interviews in 116 developing countries, representing 96% of the developing world. The earlier estimate only took into account 22 countries. However, it noted that the new estimate did not cater for rising food and fuel prices.
Despite this though, the World Bank found that there has been strong, if regionally uneven, progress towards reducing overall poverty. And it added that despite the insidiousness of poverty, the developing world was on track to halve extreme poverty from its 1990 level by 2015, the first of the eight Millennium Development Goals set by the UN.
The report, titled ‘The developing world is poorer than we thought, but no less successful in the fight against poverty,’ by Martin Ravallion, director of the World Bank’s Development Research Group and Shaohua Chen, its senior statistician, said that although the estimated number of poor people has increased, poverty reduction had not decreased. It found that poverty had been declining at the rate of about one percentage point a year, from 52 per cent of the developing world’s population in 1981 to 26 per cent in 2005. However, even at this rate, about a billion people will still live on less than $1.25 a day in 2015.
The World Bank said it revised its poverty line from US$1 a day to US$1.25 a day to take inflation into account. However, because the data are as yet unavailable, the impact of rising food and fuel prices on poor people could not be reflected, although the authors of the report posited that it was likely to be large.
And while in total, extreme poverty would be halved by 2015, there has been/is a massive disparity across regions and within continents as some countries have made remarkable progress while others have slid even further backward. In Asia, for example, poverty has fallen from 80% in 1981 to 18% in 2005 in the eastern region and from 60% to 40% in the southern region. In east Asia, China, the prosperous new kid on the block, has had its number of poor plummet from 835 million in 1981 to 207 million in 2005 after it opened up to Western investment and its coastal regions boomed. In fact, the researchers noted, when the figures are totted up and world poverty reduction is presented as a whole, the reduced figure will be almost exclusively due to China’s miracle turnaround in fortunes. However, the disparity is obvious when one looks at south Asia, which still has the majority of poor people in the world – 595 million – of which 455 million live in India.
In Sub-Saharan Africa, the researchers found, the poverty rate fell from 58% in 1996 to 50% in 2005. Nevertheless, the actual number of poor people almost doubled, from 200 million in 1981 to 380 million in 2005.
This report follows on the heels of another which showed that despite its promises to ramp up assistance to Africa, in the wake of the ‘Make Poverty History’ campaign, the G-8 had actually reduced the amount of financing it has made available to the poverty, war, drought and AIDS-ravaged continent over the past few years. Instead, it is China with its new-found wealth that has been making overtures to some African countries with trade and aid deals.
What reports such as these serve to illustrate is that the success stories, which will always be far and few between, will come about not through debt forgiveness and never-ending aid, but by what individual countries are able to accomplish through get-up-and-go initiatives. Poverty, though, will definitely remain part of the present and the future of our world. Governments and their people can decide how they use such information.
