New Report: Half Billion People Escape Abject Poverty In Past Five Years

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Money really does make the world go round

Laurence Chandy and Geoffrey Gertz, two researchers at the Brookings Institution in Washington, DC, have published an op/ed in today's Washington Post in which they discuss the findings of their new report on global poverty trends. The news is really good.

The economies of the developing world have expanded 50 percent in real terms, despite the Great Recession. Moreover, growth has been particularly high in countries with large numbers of poor people. India and China, of course, but also Bangladesh, Tanzania, Ethiopia, Vietnam, Uganda, Mozambique and Uzbekistan—nine countries that were collectively home to nearly two-thirds of the world's poor in 2005—are all experiencing phenomenal economic advances.

In the new Brookings Institution report "Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015," we updated the World Bank's official $1.25-a-day figures to reveal how the global poverty landscape has changed with the emergence of developing countries. We estimate that between 2005 and 2010, nearly half a billion people escaped extreme hardship, as the total number of the world's poor fell to 878 million people. Never before in history have so many people been lifted out of poverty in such a short period. The U.N. Millennium Development Goals established the target of halving the rate of global poverty between 1990 and 2015; this was probably achieved by 2008, some seven years ahead of schedule. Moreover, using forecasts of per capita consumption growth, we predict that by 2015, fewer than 600 million people will remain poor. At that point, the 1990 poverty rate will have been halved and then halved again.

The decline in poverty is happening in all the world's regions and most of its countries, though at varying speeds. The emerging markets of Asia are recording the greatest successes; the two regional giants, China and India, are likely to account for three-quarters of the global reduction between 2005 and 2015. Over this period, Asia's share of the world's poor is anticipated to fall from two-thirds to one-third, while Africa's share is expected to rise to nearly 60 percent. Yet Africa, too, is making advances; we estimate that in 2008 its poverty rate dropped below the 50 percent mark for the first time. By 2015, African poverty is projected to fall below 40 percent, a feat China did not achieve until the mid-1990s.

Markets and globalization are good for whatever ails you (especially if you and your familly are dirt poor). On the other hand, if you happen to be kleptocrat intent on maintaining your subjects in abject poverty, I lay out my never-fail rules for how to achieve and maintain the miracle of poverty in my column, Poor Planning

Go here to download the whole Brookings report. Whole Post op/ed is available here.