Poverty decreases sharply in developing world -Adam Thomson

-Financial Times

Up to 80 per cent of the world’s middle classes will live in developing countries by 2030 thanks to surprising recent gains in poverty reduction, according to a United Nations report published on Thursday.

“Never in history have the living conditions and prospects of so many people changed so dramatically and so fast,” concludes the UN’s latest Development Report. “The world is witnessing an epochal ‘global rebalancing’.”

This year’s report, launched in Mexico City, says higher economic growth in at least 40 developing countries has helped lift hundreds of millions of people from poverty, and pushed billions more into a new global middle class.

In an interview with the Financial Times, Helen Clark, UN Development Programme administrator, called such progress an “incredible success of emerging markets”, praising them for accompanying faster rates of economic growth with pragmatic policies to help the poor.

“These countries opened up to foreign direct investment and prioritised infrastructure but also invested in their people,” she said. “They targeted education and health, and put social floors in place.”

Underpinning the improvements in the human development index (HDI) was rapid growth in countries such as China, India and Brazil, with China and India having doubled per capita economic output in less than 20 years.

But the study stressed that growth and improvements in HDI spread far beyond the four Bric countries of Brazil, Russia, India and China, and included at least 40 countries that had accompanied greater economic dynamism with effective poverty-reduction policies.

Afghanistan, Sierra Leone, Ethiopia, Rwanda and Angola were among 14 countries that have recorded gains in HDI of more than 2 per cent a year since 2000.

Partly as a result, the report found that worldwide extreme income poverty has plunged from 43 per cent in 1990 to just 22 per cent in 2008, including more than 500m being lifted out of poverty in China alone.

The report stated that such gains had already helped the world achieve the main poverty eradication goal of the so-called Millennium Development Goals, which called for the share of people living on less than $1.25 a day to be cut by half from 1990 to 2015.

Underpinning this poverty reduction was developing countries’ increasing share of global trade, which grew from 25 per cent to 47 per cent between 1980 and 2010. “The south as a whole is driving global economic growth and societal change for the first time in centuries,” says the report.

The report found that trade among developing countries was the biggest factor in that expansion, increasing from less than 10 per cent of total global trade to more than 30 per cent. “Trade between countries in the south will overtake that between developed nations,” the report said.

The 2013 report also includes the so-called gender inequality index, an experimental index designed to measure gender inequalities along the lines of national data on reproductive health, women’s empowerment and labour market participation. The Netherlands, Sweden and Denmark topped the index while sub-Saharan Africa, south Asia and the Arab states showed the greatest levels of gender inequality.

Financial Times, 14 March, 2013, http://www.ft.com/cms/s/0/6d7a1c52-8cc5-11e2-8ee0-00144feabdc0.html#axzz2NaEF41zN

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