Wednesday, May 25, 2011

The Fall and Fall of Poverty


I've argued here before that the world is mostly drifting in the right direction: towards peace and prosperity. Negative news stories about regional disasters or wars fail to show a general positive shift. Horror stories about people living in poverty ignore that in the past these people would simply have starved to death, or died by disease, and disappeared from the statistics. Growing numbers of poor could really be a sign of development, not decline, as lives lengthen and infants survive childhood.

So I was delighted to see very positive news from research organisation Brookings Institution about rapid improvements in global standards of living:

In the new Brookings Institution report "Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015," we updated the World Bank's official $1.25-a-day figures to reveal how the global poverty landscape has changed with the emergence of developing countries. We estimate that between 2005 and 2010, nearly half a billion people escaped extreme hardship, as the total number of the world's poor fell to 878 million people. Never before in history have so many people been lifted out of poverty in such a short period.

Half a billion people climbing out of poverty in just five years is an incredible success. But this should not surprise us. Most of the fastest growing economies are poor, developing nations. Earlier this year The Economist magazine put the top ten fastest growing economies between 2001-2010 as:

Angola
China
Myanmar
Nigeria
Ethiopia
Kazakhstan
Chad
Mozambique
Cambodia
Rwanda

(Two quick caveats are necessary. First, some of these countries are experiencing rapid population growth. This means that their economic growth per capita is probably less impressive. China, with a fairly stable population, is all the more remarkable to show such high growth. Second, countries that start with very low levels of income can rise in percentage quickly even while remaining very poor. $1 to $2 is a 100% increase, but it is still low. $1 billion to $1.1 billion is only a 10% increase, but a gargantuan increase in actual wealth.)

Still, it shows that many poor economies are very quickly heading in the right direction

The Brookings Institution adds that the real causes of concern are 'fragile' states:

According to at least one classification, the number of fragile states across the world has risen from 28 in 2006 to 37 today. Furthermore, in a number of critical countries, the degree of fragility is increasing. Countries that remain locked in fragility are unsurprisingly not recording the same rates of poverty reduction achieved by stable countries. Rapid poverty reduction is directly undermined by the failure of the state to perform its core functions.

So the development of stable state structures could be a necessity to fight poverty. In any case we should be happy with the way the world has changed in recent years. Too much discussion has been miserable and pessimistic, too often commentators have complained about 'poverty' without seeing that today's poor are often climbing out of much worse conditions suffered by their parents.

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