In 1981 some 42% of the world’s population were extremely poor. Since then the number of people in absolute poverty has fallen by about 1 billion. By 2013, the most recent year for which reliable data exist, just 10.7% of the world’s population was poor (living on less than $1.90 a day at 2011 purchasing-power parity). The World Bank’s estimate for the number of people living in absolute poverty 2016 is 9.1%.
It took Britain about a century, from the 1820s to the 1920s, to cut extreme poverty from more than 40% of its population to below 10%. In Japan in the 1870s, 80% of the population lived in absolute poverty, but this fell to almost zero by the 1970s. China and Indonesia, are on course to achieve Japanese levels of poverty reduction in just fifty years.
However, the decline of absolute poverty is slowing. Until recently the world’s poorest people could be divided into three main groups: Chinese, Indian and everybody else. In 1987 China is thought to have had 660m poor people, and India 374m. In both countries better economic policies allowed many people to escape from poverty. At the last count (2011 in India; 2013 in China) India had 268 million people living in absolute poverty and China just 25 million. Both countries are much more populous than they were 30 years ago.
Much of China’s poverty-reduction has been in its highly productive small farms. Much the same is true of other Asian countries. In Bangladesh, many poorly-educated women have been able to find good jobs in textile factories.
Today, about four-fifths of all extremely poor people live in rural areas, and just over 50% of them live in sub-Saharan Africa (Figure 1).
The proportion of people in Sub-Saharan Africa living in absolute poverty rate has fallen from 54% in 1990 to 41% in 2013. But because its population is growing so quickly – by about 2.5% a year, compared with 1% for Asia – and because the poverty rate is declining slowly, the number of Africans living in absolute poverty is higher than it was in the 1990s.
African poverty is difficult to reduce, partly due to slow economic growth. Second, 36 of the world’s 56 ‘fragile’ countries are in Africa. The continent does not have as many wars as it did in the 1980s and 1990s, but it still has some disastrous countries, such as the Democratic Republic of Congo and South Sudan. Thirdly, many poor people in Africa are commonly extremely poor. For example, Rwanda and Bangladesh are both low-income countries; both are reasonably competently governed; both have grown well in the past few years. But Rwanda’s poor are much poorer than Bangladesh’s. Many get by on about $1 a day.
Bangladesh has made excellent progress against poverty so far. It will probably make slower progress from now on.
The World Bank believes that about 4% of the world’s population will still be poor in 2030 if economies continue to grow as quickly as they have in the past ten years and poor people’s incomes grow at the same rate as everyone else.
The first aim of the sustainable development goals (SDGs) is to cut the absolute poverty rate to 9% by 2020 and 3% by 2030. Increasingly, poverty is less and less global. In the mid-19th century every continent had a large population of poor people. Now, after absolute poverty is largely confined to South Asia and sub-Saharan Africa. It is likely that poverty will become ever more African.