The latest update by the WB shows that an estimated 1.29 billion people in 2008 lived below $1.25 a day (2005 PPP), equivalent to 22 percent of the population of the developing world. In 1981, 1.94 billion people were living in extreme poverty.
But, at the current rate of progress there will still be around 1 billion people living below $1.25 per day in 2015. Additionally, the number of people living between $1.25 and $2 has almost doubled from 648 million to 1.18 billion between 1981 and 2008.
The $1.25 poverty line is the average for the world’s poorest 10 to 20 countries. A higher line of $2 a day (the median poverty line for developing countries) reveals that there was only a modest drop in the number of people living below $2 per day between 1981 and 2008, from 2.59 billion to 2.47 billion, though falling more sharply since 1999.
It argues that though food, fuel and financial crises over the past four years slowed the rate of poverty reduction in some countries, global poverty kept falling. According to the WB, preliminary survey-based estimates for 2010—based on a smaller sample size than in the global update—indicate that the $1.25 a day poverty rate had fallen to under half of its 1990 value by 2010. It means that the first Millennium Development Goal of halving extreme poverty from its 1990 level has been achieved before the 2015 deadline. However, only three regions have reached MDG1 using $1.25 a day line, namely East Asia, Eastern Europe and Central Asia, and the Middle East and North Africa.
In South Asia, the $1.25 a day poverty rate fell from 61 percent to 39 percent between 1981 and 2005 and fell a further 3 percentage points between 2005 and 2008. The proportion of the population living in extreme poverty is now the lowest since 1981. In 2008, there were 571 million people below the $1.25 a day (2005 PPP) poverty line in South Asia. For Nepal, the estimate is based on NLSS II (2003/04). We will have to wait for estimate based on NLSS III (2010/11).
| South Asia | $1.25 a day (2005 PPP) | $2 a day (2005 PPP) | ||
| Year | % of population | Number (million) | % of population | Number (million) |
| 1981 | 61.1 | 568.4 | 87.2 | 810.6 |
| 1984 | 57.4 | 573.8 | 85.6 | 854.8 |
| 1987 | 55.3 | 593 | 84.5 | 905.9 |
| 1990 | 53.8 | 617.3 | 83.6 | 958.8 |
| 1993 | 51.7 | 631.9 | 82.7 | 1010.4 |
| 1996 | 48.6 | 630.8 | 80.7 | 1047.3 |
| 1999 | 45.1 | 619.5 | 77.8 | 1068.8 |
| 2002 | 44.3 | 640.5 | 77.4 | 1119.7 |
| 2005 | 39.4 | 598.3 | 73.4 | 1113.1 |
| 2008 | 36 | 570.9 | 70.9 | 1124.6 |
Looking back to the early 1980s, East Asia was the region with the highest incidence of poverty in the world, with 77% living below $1.25 a day in 1981. By 2008 this had fallen to 14%. In China alone, 662 million fewer people living in poverty by the $1.25 standard, though progress in China has been uneven over time. In 2008, 13% (173 million people) of
China’s population still lived below $1.25 a day.
In the developing world outside China, the $1.25 poverty rate has fallen from 41% to 25% over 1981-2008, though not enough to bring down the total number of poor, which was around 1.1 billion in both 1981 and 2008, although rising in the 1980s and ‘90s, then falling since 1999.
The report notes that the number of poor declined between 2005 and 2008. But, let us also note that there was a net increase in poverty to the tune of 44 million people, who fell below the extreme poverty line due to the impact of food price changes between June and December 2010 in twenty-eight low and middle income countries.
UPDATE (2012-03-09): Looks like the country level data with latest survey year is also available. For Nepal, its NLSS III (see this updated one as well). Check it out here.For Nepal, the poverty headcount at $1.25 a day (PPP) was 24.8% in 2010 [7.4 million people] and 53.1% in 2003 [13.9 million people]. It was 68% in 1995 [14.7 million people]. See this blog post.
