By Jina Moore/Correspondent
This year, for the first time in history, the number of people living in "extreme poverty" declined – everywhere in the world.
So did the poverty rate, and the simultaneous decrease is the first since the World Bank started measuring extreme poverty, defined as people living on less than $1.25 a day.
All that change adds up to something else: The world has achieved the United Nations Millennium Development Goal of halving extreme poverty – three years early.
Well, almost. "The goal is really to be achieved country by country, not just globally, so there are many, many countries that are still not achieving the poverty reduction goal," cautions Jeffrey Sachs, director of The Earth Institute at Columbia University and a key architect of the Millennium Development Goals.
The biggest raw gains have been in China, where 663 million fewer people are living in extreme poverty today than in 1981, when the World Bank first began collecting data.
"China's success against poverty is just unequaled in human history," says Martin Ravallion, Edmond D. Villani professor of economics and leader of the World Bank team that produced the numbers. In fact, China last year doubled its own national poverty line, from 90 cents a day to $1.80. The economy there has grown so fast, Mr. Ravallion says, that "the old poverty line was just a joke. It was no longer relevant."
World Bank data show that the rate of extreme poverty in East Asia generally has dropped 63 percent since 1981. In Latin America, the rate has dropped 45 percent. And in Africa, the rate of poverty decline since 2000 has, for the first time, kept pace with the rate of decline elsewhere, Ravallion says.
In fact, the rate of decline in extreme poverty everywhere in the world has more than doubled in the past decade, Ravallion says. That's after adjusting for China, whose sheer size makes it an outlier.
But the good news is mixed. More general poverty – measured by the World Bank at $2 a day – isn't falling as fast as extreme poverty. "When people rise to about $1.25 a day, they don't just catapult into the Western middle class," Ravallion says.
Despite the good news, Mr. Sachs says, there are still obstacles to overcoming poverty. "We're in a complicated situation where we can see a pathway forward, even to the end of extreme poverty itself," he says, "but we have to be very hardheaded and realistic about some of the big obstacles." Those include climate change and population growth, he says.
Individual poverty and national poverty re-inforce each other.
"If the government is poor, it can't build the roads needed to get crops to market, and you end up with shortfall of productivity that's very serious," Sachs says. Increased income means an increased tax base, and Sachs says both of those increases can help countries through what he calls "the poverty trap."
That in turn should lead to lower aid. China may be the best case in point: Its dramatic reduction in poverty, Sachs argues, comes after receiving significant aid 20 years ago.
Today, China is a financier of infrastructure in Africa. "[Aid] often plays an important catalytic role, especially for countries that start out in extreme poverty," he says, "[but] in no country is aid the only story."
