Latest world poverty estimates

One of the more interesting findings from the World Bank's latest estimates on global poverty (calculated based on Purchansing Power Parity (PPP) exchange rates), is the fact that in India poverty appears to have declined faster in the eighties, than in the "post-liberalisation" nineties and beyond. The proportion of people living under $1.25 per day for the country came down from 59.8% in 1981 to 51.3% by 1990 or 8.5 percentage points over nine years. Between 1990 and 2005, it declined to 41.6%, a clearly much smaller drop of 9.7 percentage points over 15 years.

Here are a few snippets from the report of relevance to India(abstract available here).

1. Around 42% of the Indian population or 456 million people live below the revised $ 1.25 per day international poverty line. It was 421 million in 1981.

2. The number of Indian poor also constitute 33% of the global poor, which is pegged at 1.4 billion people.

3. India also has 828 million or 75.6 % of the population living below $2 a day. Sub-Saharan Africa is better with only 72.1% living below $2.

4. Even in China, 208 million people or 16 per cent of the population live below $1.25 a day. East Asia recorded the sharpest decline in poverty from 79% of the population in 1981 to 18% in 2005

The rise in absolute numbers in India is in contrast with the figures across the developing world, where 1.4 billion people (one in four) were living on less than $1.25 a day in 2005, down from 1.9 billion (one in two) in 1981. These figures are an upward revision from previous estimates since recent research and statistics reveal that cost of living is higher in the developing countries than thought of.

Figures also reveal that the extent of poverty reduction shows wide variation. Poverty in East Asia, the world’s poorest region in 1981, has fallen from nearly 80% of the population living on less than $1.25 a day in 1981 to 18% in 2005 (about 330 million), largely owing to dramatic progress in poverty reduction in China.
The results have been less dramatic for South Asia and least for sub-Saharan Africa.

The latest poverty estimates draw on 675 household surveys for 116 developing countries, representing 96 percent of the developing world, done as part of the International Comparison Program (ICP), in 2005. The survey interviewd 1.2 million randomly sampled households, and the new international poverty line is $1.25 per day at 2005 prices.