Media Contacts:
In Washington: Christopher Neal (202) 473-7229 Cneal1@worldbank.org
Cynthia Case (TV/Radio) (202) 473-2243 Ccase@worldbank.org
WASHINGTON, April 23, 2004 The proportion of people living in extreme
poverty (less than $1 a day) in developing countries dropped by almost half between 1981
and 2001, from 40 to 21 percent of global population, according to figures released today
by the World Bank. But while rapid economic growth in East and South Asia has pulled over
500 million people out of poverty in those two regions alone, the proportion of poor has
grown, or fallen only slightly, in many countries in Africa, Latin America and Eastern
Europe and Central Asia.
This uneven progress raises concerns that the eight Millennium Development Goals (MDGs)
approved by 189 nations in 2000, the first of which is to reduce the 1990 poverty rate by
half by 2015, may be beyond reach for some countries. Economic growth in China
and India has delivered a dramatic reduction in the number of poor, said François
Bourguignon, the Bank's Chief Economist. But other regions have not enjoyed
sustained growth and, in too many cases, the number of poor has actually increased.
Although we are likely to reach the first Millennium Development Goal of reducing poverty
by half worldwide by 2015, much more aid, much more openness to trade, and more widespread
policy reforms are needed to achieve all the MDGs in all countries.
The report showed particularly worrisome trends in subSaharan Africa, where the number
of people living on $1 a day or less rose to 314 million in 2001 from 164 million in 1981.
Moreover, Africa represented the one region where the proportion of very poor people
increased, rising to 46.5% in 2001 from 41.6% of the population in 1981.
The Bank's annual statistical report, World Development Indicators 2004 (WDI),
released today, shows a drop in the absolute number of people living on less than $1 a day
in all developing countries from 1.5 billion in 1981, to 1.1 billion in 2001, with much of
the progress occurring in the 1980s. Between 1990 and 2001, the global decline in the
number of extremely poor slowed somewhat, falling by about 120 millionfrom 1.2
billion to 1.1 billion peoplewhile the proportion of poor dropped from 28 percent to
21 percent of the total population.
Gross domestic product (GDP) per capita in all developing countries rose by 30 percent
between 1981 and 2001. In East Asia, where GDP per capita tripled, with average annual
growth of 6.4 percent, the proportion of people living in extreme poverty fell from 58 to
16 percent, and the absolute number pulled out of extreme poverty since 1981 was more than
400 million.
Dramatic progress against absolute poverty has been made by China, where GDP per capita
went up five times since 1981 and the number of extremely poor fell from over 600 million
to slightly more that 200 million, or from 64 percent to 17 percent. About half of this
progress was in the first half of the 1980s.
In South Asia, a 5.5 percent average annual GDP growth rate in the 1990s helped reduce
the proportion of extremely poor from 41 in 1990 to 31 percent. But because this economic
expansion coincided with rapid population growth in the region since 1990, the absolute
number living on less than $1 a day dropped by just 34 million since 1990, to 428 million
in 2001.
In marked contrast to East and South Asia, poverty actually rose in Sub-Saharan Africa.
Since 1981, a 15-percent contraction in GDP per capita in Sub-Saharan Africa resulted in a
near-doubling of the number of people living on less than $1 a day, from 164 million to
314 million, a rise from 42 to 47 percent of the region's population.
In Eastern Europe and Central Asia, too, high unemployment and declining output in many
of the formerly centrally-planned economies drove extreme poverty rates up from near-zero
in 1981 to six percent by 1999, but there is evidence of a recent decline in the poverty
rate. The number of people living on less than $2 a day in Eastern Europe and Central Asia
rose from eight million (two percent) in 1981 to over 100 million (24 percent) in 1999,
dropping back to slightly more than 90 million (20 percent) in 2001.
In Latin America and the Caribbean, economic growth rose only slightly through the
1990s, and poverty fell only marginally. The proportion of poor in the region in 2001,
including both those living on less than $1 and $2 a day10 percent and 25 percent
respectivelywas roughly comparable to that in 1981, when they were 10 percent and 27
percent.
In the Middle East and North Africa, extreme poverty dropped by about half since 1981,
from five percent to two percent in 2001, while the proportion living on less than $2 a
day was down from 29 percent in 1981 to 23 percent in 2001.
These statistics present a picture of uneven progress in reducing poverty, and strongly
suggest that the biggest gains occur where growth and trade coincide with sustained
efforts to develop human capital and foster a sound investment climate. But growth, by
itself, is no guarantee that poverty will be reduced quickly, as its benefits are often
slow in reaching the poor.
Social investments needed to achieve MDGs
Enhancing security for poor people means reducing their vulnerability to ill
health and economic shocks, said Martin Ravallion, manager of the Bank's poverty
research program. To increase the security of poor people, national poverty
reduction strategies must support their immediate consumption needs and protect their
assets by ensuring access to basic services, including health, education and
nutrition.
The urgency with which such strategies are needed is underscored by the fact that,
worldwide, an estimated 840 million people, most of them in low-income countries, are
chronically undernourished. Even in regions experiencing rapid growth, the quality of life
among the poor often remained unchanged, in the absence of adequate social investments.
Despite impressive growth in South Asia, for example, that region still registers
malnutrition among children reaching almost 50 percent, along with chronically low school
enrolment and completion rates. If current trends persist, children in more than half of
developing countries will still not be attending a full course of primary education by
2015, as specified in the MDGs.
Such disparities in social indicators outlined in WDI 2004 bear out the finding in the
World Bank's World Development Report 2004 that public services in health,
nutrition and education often fail poor people. For example, in 20 developing countries
with disaggregated data, child mortality rates fell only half as fast for the poorest 20
percent of the population as for the whole population. Worldwide, the under-five mortality
rate was at 81 per thousand live births in 2002, down from 95 in 1990. Much faster
progress is needed to reach the MDG of reducing it to 32 per thousand births by 2015.
HIV/AIDS has infected more than 60 million people worldwide, with more than 95 percent
of them in developing countries, and 70 percent in Sub-Saharan Africa, where it has
resulted in a drop in life expectancy from 48 years in 1980 to 46 years in 2002.
The disparities that persist between regions and within countries on life expectancy,
child and maternal mortality, school enrolment and completion, gender equity and progress
against communicable diseases remain a major obstacle to achieving many of the MDGs. Continued
progress in poverty reduction, the WDI notes, depends on economic growth and
the distribution of income.
Access to markets for sustained growth
To achieve and sustain the levels of economic growth needed to reduce poverty,
developing countries need greater access to foreign markets. Although trade accounts for a
larger and faster-growing share of developing countries' output than is the case with the
wealthy countries, many obstacles remain to developing countries' realizing their full
potential participation in global trade in goods and services. Some 70 percent of the
world's poor live in rural areas and depend directly or indirectly on agriculture, but
two-thirds of the world's agricultural trade originates in the rich OECD countries, the
WDI reveals. This occurs, in part, because rich countries spend about $330 billion a year
to subsidize their agricultural producers. Reduced protection in agriculture would account
for two-thirds of the gains from full global liberalization of all merchandise trade, with
many of the potential benefits accruing to low-income farmers in developing countries.
While merchandise, including commodities and manufactured goods, dominates
developing-country trade, exports of computer, financial, information and other business
services are gaining in importance. Also, increased globalization has enabled greater
labor mobility, resulting in the growing importance of remittances in reducing poverty.
Meeting the promise of Monterrey
In addition to liberalization of trade by both rich and developing countries, increased
aid flows, especially to the poorest countries, are needed to eradicate extreme poverty
and achieve the MDGs. Net aid flows to developing and transition countries reached $70
billion in 2002, up from $54 billion in 1997, the WDI reports. More than a quarter of
these flows went to Sub-Saharan Africa, where they represent 32 percent of that region's
gross capital formation. But middle-income countries, including China, Serbia and
Montenegro, West Bank and Gaza, and Pakistan, received about half of total net aid.
To achieve the MDGs, the poorest countries need much more aid in addition to ongoing
debt reduction. The WDI reports that development assistance accounted for an average of
0.59 percent of government disbursements among the 22 OECD aid donors in 2002, and 0.23
percent of their gross national income (GNI). Military expenditures in the high-income
countries, meanwhile, represented 11 percent of government spending and 2.4 percent of GDP
in 1998. In the low- and middle-income countries, military spending occupied even more of
the national pie: 12.3 percent of government expenditure and 2.6 percent of GDP in 1999.
Importance of statistical capacity-building
The Bank's annual World Development Indicators is an important contribution to
monitoring progress towards achieving the MDGs. The quality of monitoring, however,
depends on increased capacity of developing countries to gather, analyze, and disseminate
statistics. Governments, politicians and managers need reliable data. So do citizens, in
order to hold governments accountable for their actions. Building such capacity is vital
to meeting the commitments made at the Second Roundtable on Development Results in
Marrakech in February 2004, to which the World Bank is making an important contribution.
This includes support for preparations for the 2010 censuses, establishing international
household survey network, and preparing national statistical development strategies by
low-income countries by 2006.
World Development Indicators reflects the strengths and weaknesses of the
international statistical system, said Shaida Badiee, Director of the Bank's
Development Data Group. Improving them is not just a technical challenge, but
a development issue, because data, statistics and indicators are at the heart of the
development results agenda.
New Poverty Estimates Trace the Decline of Global Poverty since
1981
People living on less than $1 a day (millions) |
Region |
1981 |
1984 |
1987 |
1990 |
1993 |
1996 |
1999 |
2001 |
East Asia &
Pacific |
767 |
558 |
424 |
472 |
416 |
287 |
282 |
284 |
China |
606 |
421 |
308 |
377 |
336 |
212 |
224 |
212 |
Europe &
Central Asia |
1 |
1 |
2 |
2 |
17 |
20 |
30 |
18 |
Latin America & Caribbean |
36 |
46 |
45 |
49 |
52 |
52 |
54 |
50 |
Middle East
& North Africa |
9 |
8 |
7 |
6 |
4 |
5 |
8 |
7 |
South Asia |
475 |
460 |
473 |
462 |
476 |
441 |
453 |
428 |
Sub-Saharan
Africa |
164 |
198 |
219 |
227 |
241 |
269 |
292 |
314 |
Total |
1,451 |
1,272 |
1,169 |
1,219 |
1,206 |
1,075 |
1,117 |
1,101 |
Excluding China |
845 |
850 |
861 |
841 |
870 |
863 |
894 |
888 |
Share of people living on less than $1 a day (%) |
Region |
1981 |
1984 |
1987 |
1990 |
1993 |
1996 |
1999 |
2001 |
East Asia &
Pacific |
55.6 |
38.6 |
27.9 |
29.6 |
25.0 |
16.6 |
15.7 |
15.6 |
China |
61.0 |
40.6 |
28.3 |
33.0 |
28.4 |
17.4 |
17.8 |
16.6 |
Europe &
Central Asia |
0.3 |
0.3 |
0.4 |
0.5 |
3.7 |
4.2 |
6.2 |
3.7 |
Latin America & Caribbean |
9.7 |
11.8 |
10.9 |
11.3 |
11.3 |
10.7 |
10.5 |
9.5 |
Middle East
& North Africa |
5.1 |
3.8 |
3.2 |
2.3 |
1.6 |
2.0 |
2.6 |
2.4 |
South Asia |
51.5 |
46.8 |
45.0 |
41.3 |
40.1 |
35.1 |
34.0 |
31.1 |
Sub-Saharan
Africa |
41.6 |
46.3 |
46.8 |
44.6 |
43.7 |
45.3 |
45.4 |
46.5 |
Total |
39.5 |
32.7 |
28.4 |
27.9 |
26.2 |
22.3 |
22.2 |
21.3 |
Excluding China |
31.5 |
29.8 |
28.4 |
26.1 |
25.5 |
24.0 |
23.7 |
22.8 |
People living on less than $2 a day (millions) |
Region |
1981 |
1984 |
1987 |
1990 |
1993 |
1996 |
1999 |
2001 |
East Asia &
Pacific |
1,151 |
1,104 |
1,024 |
1,117 |
1,080 |
922 |
900 |
868 |
China |
858 |
809 |
732 |
830 |
807 |
650 |
630 |
596 |
Europe &
Central Asia |
8 |
9 |
8 |
58 |
78 |
97 |
111 |
93 |
Latin America & Caribbean |
99 |
119 |
115 |
125 |
136 |
117 |
127 |
128 |
Middle East
& North Africa |
52 |
50 |
53 |
51 |
52 |
61 |
70 |
70 |
South Asia |
821 |
859 |
911 |
958 |
1,005 |
1,022 |
1,034 |
1,059 |
Sub-Saharan
Africa |
288 |
326 |
355 |
382 |
409 |
445 |
487 |
514 |
Total |
2,419 |
2,466 |
2,466 |
2,689 |
2,759 |
2,655 |
2,730 |
2,733 |
Excluding China |
1,561 |
1,657 |
1,734 |
1,858 |
1,952 |
2,015 |
2,101 |
2,137 |
Share of people living on less than $2 a day (%) |
Region |
1981 |
1984 |
1987 |
1990 |
1993 |
1996 |
1999 |
2001 |
East Asia &
Pacific |
83.4 |
76.3 |
67.4 |
69.9 |
64.8 |
53.3 |
50.3 |
47.6 |
China |
86.3 |
78.0 |
67.0 |
72.6 |
68.1 |
53.4 |
50.1 |
46.7 |
Europe &
Central Asia |
1.9 |
2.0 |
1.7 |
12.3 |
16.6 |
20.6 |
23.5 |
19.7 |
Latin America & Caribbean |
26.9 |
30.4 |
27.8 |
28.4 |
29.5 |
24.1 |
25.1 |
24.5 |
Middle East
& North Africa |
28.9 |
25.2 |
24.2 |
21.4 |
20.2 |
22.3 |
24.3 |
23.2 |
South Asia |
89.1 |
87.2 |
86.7 |
85.5 |
84.5 |
81.2 |
77.7 |
76.9 |
Sub-Saharan
Africa |
73.3 |
76.1 |
76.1 |
75.0 |
74.3 |
74.8 |
75.7 |
76.3 |
Total |
65.9 |
63.4 |
59.8 |
61.6 |
60.1 |
55.3 |
54.2 |
52.8 |
Excluding China |
58.3 |
58.0 |
57.2 |
57.6 |
57.2 |
56.0 |
55.6 |
54.8 |
The report and related materials will be available to the public on
the World Wide Web immediately after the embargo expires at: http://www.worldbank.org/data
Media outlets are encouraged to include this Web address in their
coverage of the report.
World Development Indicators 2004 is available online by subscription at
www.worldbank.org/data.
To subscribe or order a published hard copy edition, CD-ROM, or the Little Data Book, or
the Little Green Data Book please go to: www.worldbank.org/publications.