World Development Indicators 2005

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Halve, between 1990 and 2015, the proportion of people living on less than $1 a day

Halve, between 1990 and 2015, the proportion of people who suffer from hunger

Reducing poverty and hunger

Poverty exists everywhere, but it is most cruel and debilitating in developing countries, where more than one person in five subsists on less than $1 day. There has been progress. Since 1990 extreme poverty in developing countries has fallen from 28 percent to 21 percent. Over the same time population grew 15 percent to 5 billion people, leaving 1.1 billion people in extreme poverty. If economic growth rates in developing countries are sustained, global poverty will fall to 10 percent—a striking success.

But hundreds of millions of people will still be trapped in poverty, especially in Sub-Saharan Africa and South Asia and wherever poor health and lack of education deprive people of productive employment; environmental resources have been depleted or spoiled; and corruption, conflict, and misgovernance waste public resources and discourage private investment. Even as the first target of the Millennium Development Goals appears in sight, the effort to eliminate poverty must be renewed.

Poverty rates are falling, but progress has been uneven

Share of people living on less than $1 or $2 a day (%)

While accelerating growth in India has put South Asia on track to meet the goal, Sub-Saharan Africa lags behind. In some countries poverty rates exceed 70 percent.

Sub-Saharan Africa	South Asia

East Asia has experienced a sustained period of economic growth, led by China, while Latin America and the Caribbean has stagnated, with little poverty reduction.

East Asia & Pacific	Latin America & Caribbean

The transition economies of Europe and Central Asia saw poverty rates rise in the 1990s and then fall. There and in the Middle East and North Africa consumption of $2 a day may be a more realistic limit of extreme poverty.

Europe & Central Asia	Middle East & North Africa

Source: World Bank staff estimates.

China leads the way

Proportion of people living on less than $1 a day (%)

Source: World Bank staff estimates.

The global poverty rate began to fall rapidly in the 1980s due in large part to China’s rapid economic growth. In 1981 China was among the poorest countries, with more than 60 percent of its population living on less than $1 a day. China’s poverty was cut in half by 1990 and in half again by 2001. Excluding China, the poverty rate in developing countries has been falling by about half a percentage point a year, but many economies stagnated in the 1990s and in those places poverty increased.

Rising poverty in Africa—and between the poverty lines

Population living on less than $1 a day (millions)

Source: World Bank staff estimates.

In contrast to East Asia, the number of extremely poor people in Sub-Saharan Africa has almost doubled since 1981 to 313 million people in 2001. This is a terrible human tragedy and represents the greatest challenge to development.

And globally, even as poverty rates fell and the number of people living on less than $1 a day diminished, the number living on less than $2 a day increased from 2.4 billion in 1981 to 2.7 billion in 2001. The 1.6 billion people in the middle, between the $1 and $2 a day poverty lines, are still very poor and remain vulnerable to economic slowdowns. Success in reaching the first Millennium Development Goal will make the needs of this group even greater.

Fewer people in extreme poverty

People living on less than $1 a day (millions)

1981—1.5 billion poor
In 1981 more than half of the people in extreme poverty lived in East Asia and over a quarter in South Asia.

1981

1990—1.2 billion poor
By 1990 there were 260 million fewer people worldwide living in extreme poverty—and more than 300 million fewer in East Asia. Had poverty rates not fallen, population growth alone would have added 288 million more poor people.

1990

2001—1.1 billion poor
In 2001 there were 100 million fewer people living in poverty than in 1990 and almost 400 million fewer than in 1981. But in Sub-Saharan Africa the number of people in extreme poverty rose to almost 320 million, and they now make up over a quarter of the global total.

2001

2015—0.6 billion poor
With sustained growth, many more people could climb out of poverty. Based on current trends, 90 percent of those still in extreme poverty in 2015 would be living in South Asia and Sub-Saharan Africa.

2015

Source: World Bank staff estimates.

Africa’s poor get poorer

Average daily income of the extreme poor (1993 PPP$)

As people living in extreme poverty increased in number in Africa, they also became poorer. The average daily income or consumption of those living on less than $1 a day fell from 64 cents in 1981 to 60 cents in 2001. In the rest of the developing world it increased from 72 cents to 83 cents. Because Africa’s 313 million poor people have such low incomes, relatively higher rates of economic growth will be required to lift them above the poverty line. In Sub-Saharan Africa the median share of income or consumption going to the poorest 20 percent of the population is 4.9 percent, almost 2 percentage points less than in other developing regions. Only in Latin America and the Caribbean do the poorest 20 percent fare worse.

Source: World Bank staff estimates.

Which countries are on track to reach the MDG target?

$1 a day poverty rate, 2001 (%)

Source: World Bank staff estimates.

Since 1990 rates of extreme poverty have declined in many countries. The majority of the extremely poor population lives in countries that are on track to achieve the Millennium Development Goal target. This includes countries with large populations such as China, India, Pakistan, and Indonesia, where many people have climbed out of poverty. In other countries, such as Bangladesh, poverty rates have been declining but not fast enough to be cut in half by 2015. And there are many more countries where poverty rates have increased since 1990. In Sub-Saharan Africa only a handful of countries such as Senegal are on track to reach the target. Reversing the trend will require higher rates of economic growth and benefits reaching the poor—a daunting task on top of the burdens of disease, famine, and armed conflict.

Starting life at a disadvantage

Malnutrition prevalence (% of children under age five)

Source: World Bank staff estimates.

Malnutrition in children often begins at birth, when poorly nourished mothers give birth to underweight babies. Malnourished children develop more slowly, enter school later, and perform less well. The proportion of severely underweight children is falling, but fewer than 40 percent of the 77 countries with adequate data to monitor trends are on track to reach the Millennium Development Goal target. Faster progress is possible. Programs to encourage breastfeeding and to improve the diets of pregnant and lactating mothers help. So do appropriate care and feeding of sick children, oral dehydration therapy, control of parasitic diseases, and programs to treat vitamin A deficiency.

Hunger rising in Africa

Prevalence of undernourishment (%)

Source: World Bank staff estimates based on Food and Agriculture Organization data.

Hunger, measured by undernourishment, means consuming too little food to maintain normal levels of activity. Rates of undernourishment have been falling in most regions, but too slowly to reach the Millennium Development Goal target, and in many regions the number of hungry people continues to grow. By 2002 only East Asia and Pacific and Latin America and the Caribbean had fewer undernourished people than 10 years earlier. Countries that reduced hunger had higher economic growth, especially in agriculture and in rural areas. They have also had lower population growth and lower rates of HIV infection.

Poor and malnourished

Proportion of children under age five severely underweight, by family wealth quintile and
location (%)

Poverty, more than location, determines who is malnourished in some countries. In Benin, a poor country, but far from the poorest, malnutrition is more common among the urban poor.

Benin

In Jordan, whose GNI per capita is four times higher than Benin’s (on a purchasing power parity basis), malnutrition is a rare occurrence, but somewhat more frequent in rural areas.

Jordan

Income distribution also matters. Guatemala, with an average income similar to Jordan’s, has much higher rates of malnutrition among the poorest 20 percent of its population, and the rural poor are the worst off.

Guatemala

Madagascar, one of the poorest countries in the world, has significant malnutrition, even among the children of the richest 20 percent of its population.

Madagascar

Source: World Bank staff estimates based on Demographic and Health Survey data.


	Poverty rates are falling, but progress has been uneven Sub-Saharan Africa South Asia East Asia & Pacific Latin America & Caribbean Europe & Central Asia Middle East & North Africa


	China leads the way




	Rising poverty in Africa and between the poverty lines




	Fewer people in extreme poverty 1981 1990 2001 2015



	Africa’s poor get poorer




	Which countries are on track to reach the MDG target?



	Starting life at a disadvantage



	Hunger rising in Africa



	Poor and malnourished Benin Jordan Guatemala Madagascar