Global Poverty
World Bank Updates Poverty Estimates for the Developing World
Updated November 3, 2008
400 million more people live in poverty than earlier thought
New poverty estimates published by the World Bank reveal that 1.4 billion people in the developing world (one in four) were living on less than US$1.25 a day and almost 3 billion on less than US$ 2.00 a day.
The new numbers show that poverty has been more widespread across the developing world over the past 25 years than previously estimated, but also that there has been strong-if regionally uneven-progress toward reducing overall poverty.
However, the sobering news-that poverty is more pervasive than we thought-means that we must redouble our efforts, especially in Sub-Saharan Africa," said Justin Lin, Chief Economist of the World Bank and Senior Vice President, Development Economics.
"Our latest revision of poverty numbers is the largest revision yet because of important new data revealing that the cost of living in the developing world is higher than we thought," said Martin Ravallion, director of the World Bank's Development Research Group.
More accurate estimates of poverty
In the light of these new data, the Bank's estimates of the extent of poverty in the developing world have also been revised upward across the entire period of research (1981 to 2005).
"The new estimates are a major advance in global poverty measurement because they are based on far better price data for assuring that poverty lines are comparable across countries," said Shaohua Chen, senior statistician in the Development Research Group.
An earlier estimate of poverty-of 985 million living below the former international poverty line of $1 a day in 2004, down from 1.5 billion in 1981-was based on 1993 cost-of-living data which was the best available at the time.The new poverty numbers, which show that 400 million more people lived below the poverty line in 2005 than earlier thought, are benchmarked to the revised international poverty line of $1.25 a day in 2005 prices. This line is a good standard for assessing extreme poverty because it is the average of the national poverty lines for the world's poorest 10 to 20 countries.
"The new international poverty line is not intended to replace national poverty lines," said Ravallion. When measuring poverty and discussing appropriate policies in a specific country one should naturally use a poverty line considered appropriate to that country, which need not accord with our international line."
"The moment one thinks MINE, they are on the path to selfishness. The other, selfless path, is guided by another thought: what can I do to reduce the suffering of my impoverished brothers and sisters."
