The number of people worldwide living in absolute poverty–the World Bank defines this as people surviving on less than $1.25 a day–has fallen by about half a billion since 1990. China is a major contributor to the decline: its absolute poverty fell from about 60% in 1990 to only around 16% in 2005. India, too, saw some progress, as poverty there fell from 60% to 42%.
According to Perspectives on Global Development: Shifting Wealth, about 65 poor and middle-income economies have grown twice as fast as richer OECD ones over the past 20 years. The upshot has been convergence between rich and poor countries, and a decline in absolute poverty. Such a shift is not enough to end poverty of course–factors such as better governance also count. Indeed, some countries in sub-Saharan Africa have notched up impressive earnings from natural resources but have seen few benefits reaching the poor, whereas some other countries that have enjoyed no economic convergence at all have made impressive inroads on poverty.
Still, the shifting economic geography could boost these “poor” or “struggling” countries over the longer term, as emerging economies like China and India create new flows of aid, trade and investment opportunities in the developing world.
©OECD Observer N° 280 July 2010
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