More people living in extreme poverty than previously thought – World Bank

27 August 2008 – The World Bank has revised upward its estimates of the number of the world’s poor from nearly 1 billion to 1.4 billion, drawing on new data that indicates that poverty is more widespread across the developing world than previously thought.

But despite the new figures, a new study by the agency shows that great strides continue to be made in the fight against poverty.

“The new data confirm that the world will likely reach the first Millennium Development Goal [MDG] of halving the 1990 level of poverty by 2015 and that poverty has fallen by about one percentage point a year since 1981,” said Justin Lin, the World Bank’s Chief Economist and Senior Vice President of Development Economics.

“However, the sobering news that poverty is more pervasive than we thought means we must redouble our efforts, especially in sub-Saharan Africa,” he warned.

The revised figures are based on 2005 measures of purchasing power parity, but due to lags, do not reflect the impacts of recent surge in food and fuel prices.

The agency also raised its poverty benchmark from $1 a day to $1.25 a day – the average poverty line for the world’s 10 to 20 poorest countries – based on the new data, reflecting a more accurate picture of the cost of living in developing nations.

“The new estimates are a major advance in poverty measurement because they are based on far better price data for assuring that the poverty lines are comparable across countries,” said Martin Ravallion, Director of the Development Research Group at the agency.

The number of the world’s poor has dropped by 500 million since 1981, but despite this positive progress, some one billion people will still live on less than $1.25 a day by 2015, the target date of the MDGs.

In East Asia, the poverty rate has been slashed from almost 80 per cent in 1981 to 18 per cent in 2005, driven by China’s success in elevating the poor.

Overall, the poverty rate has fallen in South Asia from 60 per cent to 40 per cent from 1981 to 2005, with over two-thirds of the region’s poor in India.

In sub-Saharan Africa, the percentage of people living under $1.25 a day remains unchanged at 50 per cent, but the number of poor has nearly doubled, from 200 million in 1981 to 380 million in 2005.


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