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Extreme Poverty Has Been Cut in Half Since 1990

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In 1990, 43% of the world’s population subsisted on less than $1.25 per day. By 2010, that number had shrunk to 21%. This success comes 5 years before the United Nation’s Millennium Development Goal of achieving such a number by 2015.

The conversation has now shifted to the remaining 21%. Optimists hope to achieve similar success by 2030. However, there are several unique obstacles to addressing that 21%, and the economic conditions that allowed such a rapid decline before are unlikely to be replicated in the coming decade.

Much of the success of the last two decades was achieved by slightly elevating the conditions of those living just below the $1.25 per day line. Pulling a person living at $1.15 per day over the $1.25 line is much easier than pulling someone living at $0.25 to over $1.25. In other words, much of the remaining 21% was the bottom half of the original 43 percent. The challenge of the next decades will be to improve the lives of the most impoverished people on Earth.

China’s growth over the past decades was instrumental in lowering the extreme poverty rate. In the twenty years, from 1981 to 2001, China pulled 680 million of its own citizens out of extreme poverty as it rapidly developed. With China’s extreme poverty rate now at low levels, the focus will now shift to new developing countries, primarily India and Africa. The challenge will be to replicate the economic conditions for such an achievement in vastly different governmental and cultural contexts.

Should such a success be achieved by 2030, however, the fight against poverty will hardly be over. The $1.25 a day figure is simply an accepted global standard of extreme poverty, and does not account for those living in poverty in developed countries. In the U.S., the poverty line sits at $30 a day–a marked difference. However, with extreme poverty levels eradicated, the world would be able to focus anew on those living just below the line.

– Andrew Rasner

Sources: The Economist, The Wall Street Journal, The Economist
Photo: The Economist,