The World Bank’s latest PR campaign is that “for the first time in history” we can “eliminate extreme poverty” (for the hubris of this claim and the many times it’s been said before see here).
Lost in the fine print is the disclaimer that “extreme poverty” is defined as $1.25 / day.
And there has been some progress on that front (clic the pic for a better image):
However, since virtually all the decline from 1981 to 2009 is from China, I’d give the credit largely to “state capitalism” and not to any top down multilateral agency development program.
And, if we raise the bar on extreme poverty to, say, $2.00 per day, the situation is far from rosy (clic the pic for a better image):
At $2.00 China’s progress is not as great, India is regressing, as is SSA and overall, the number barely budges in the last 25+ years.
So, yes, there are a lot fewer people under the $1.25 level today than in 1981, which means it’s easier to lift the rest of them. However, in my opinion, the World Bank will have very little to do with any of the actual lifting.
Overall though, the number of very poor people living on less than $2.00 is rising outside of China, and China’s progress here is not large enough to drive the global number down much at all.
No wonder China feels like it can push the Bank around. If it wasn’t for China, the Bank couldn’t make up ANY arbitrary poverty reduction statistics to rationalize their continued existence. Even with the Chinese miracle, the Bank has to be very selective in picking a number to make it look like things are improving at the global level.
The graphs come from here, and the hat tip goes to “Mr. Inequality”, @BrankoMilan.