Official estimates of global poverty are compiled by the World Bank and stretch back 30 years. For most of that period, the trend has been one of slow, gradual reduction. By 2005, the year of the most recent official global poverty estimate, the number of people living under the international poverty line of $1.25 a day stood at 1.37 billion – an improvement of half a billion compared to the early 1980s, but a long way from the dream of a world free of poverty.
Today, it's estimated that there are approximately 820 million people living on less than $1.25 a day.
Behind these aggregate figures lies a somber reality.
In assessing the fortunes of the developing world during the late 20th century, countries can be roughly divided into two categories: China and the rest.China's stunning economic reversal – 30 years ago, only 16 percent of its population lived above the poverty line, but by 2005, only 16 percent stood below it – masks others' failings. Excluding China, the 500 million decrease in global poverty becomes an increase of 100 million. In the world's poorest region, sub-Saharan Africa, the poverty rate remained above 50 percent throughout the period, which, given the region's rapid population growth, translated into a near doubling in the number of its poor. Similarly in South Asia, Latin America and Europe–Central Asia there were more poor people in 2005 than there were a quarter of a century earlier.
The number of the world's poor is falling rapidly.
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This depressing track record shapes perspectives on poverty that abound today. Global poverty has come to be seen as a constant, with the poor cut off from the prosperity enjoyed elsewhere. Only a radical change to the current global order – an alternative system to globalization or a massive exercise in redistribution – could possibly alter this destiny.
In a new study of global poverty, we upend this narrative. By combining the most recent country survey data of household consumption with the latest figures on private consumption growth, we generated global poverty estimates from 2005 up to the present day. Poverty reduction accelerated in the early 2000s at a rate that has been sustained throughout the decade, even during the dark recesses of the financial crisis. Today, we estimate that there are approximately 820 million people living on less than $1.25 a day. This means that the prime target of the Millennium Development Goals – to halve the rate of global poverty by 2015 from its 1990 level – was probably achieved around three years ago. Whereas it took 25 years to reduce poverty by half a billion people up to 2005, the same feat was likely achieved in the six years between then and now.
Never before have so many people been lifted out of poverty over such a brief period of time.
Not only is poverty falling rapidly, it's falling across all regions and most countries. Unsurprisingly, the greatest reduction has occurred in Asia. But it's not just the dynamic economies of East Asia, such as China, recording great feats in poverty reduction; South Asian giants including India and Bangladesh, and Central Asian economies such as Uzbekistan also make great strides. Even Sub-Saharan Africa is sharing in this progress. The region finally broke through the symbolic threshold of a 50 percent poverty rate in 2008 and its number of poor people has begun falling for the first time on record.
