Developing World 'Poorer Than We Thought,' Report Reveals

New data released by the World Bank estimates that the number of poor people around the world is far higher than originally estimated. The number of poor people in 2005 is now estimated at 1.4 billion, an increase of 500 million from earlier estimates of 948 million.

According to Asma Lateef, director of Bread for the World Institute, this data gives a more accurate picture of how widespread poverty is and reflects improved ways of measuring the cost of living in developing countries and a larger set of household surveys in more countries. "It suggests that the earlier measure of extreme poverty, the number of people who live on less than $1 a day, underestimated the cost of living in developing countries. The new poverty line is $1.25 a day."

The World Bank report, "The Developing World is Poorer Than We Thought, But No Less Successful in the Fight against Poverty," recalculates poverty rates for the last 25 years and finds that although the number of people living in poverty is higher under this new measure, we have seen an overall, long-term decline in the number of people living in poverty, from 1.9 billion in 1981 to 1.4 billion. The world has been making steady progress in reducing poverty since 1981 at about one percent a year. At this rate, the world is on target to achieve the first Millennium Development Goal of halving the proportion of people living in poverty by 2015 from 1990 levels.

Lateef pointed out that there are significant disparities in poverty between regions and across countries. The developing world (not including China) has seen the number of people below $1.25 stay at around 1.2 billion since 1981, because population growth has outstripped progress against poverty. About 29 percent of the population of the developing world (excluding China) live on less than $1.25 per day, down from 40 percent in 1981. "At this rate, the developing world without China is unlikely to achieve the first MDG," she said.

Even under the revised poverty line, the trends in sub-Saharan Africa continue to be of grave concern. It has seen no change in the poverty rate, which continues to hover around 50 percent, while the number of people in extreme poverty has risen from 200 million in 1981 to 380 million 25 years later. "The World Bank report suggests that if this continues, a third of the world's poor people will live in Sub-Saharan Africa by 2015," said Lateef.

The World Bank report echoes earlier findings of Bread for the World Institute on the state of domestic poverty, and reinforces the argument of those who describe the way we measure poverty in the U.S. as outdated and inadequate, according to Lateef. "The U.S. should follow the World Bank's example and take steps to ensure that the needs of hungry and poor people in this country are assessed completely and correctly, so that people do not continue to fall through the cracks under our nation's current system," she said. "It's also important to note that because of lags in the data, neither the World Bank's revised numbers, nor the latest U.S. poverty numbers released by the government reflect the impact on poor people of record food and energy costs in the last year."