Chapter

Poverty

Author(s):
International Monetary Fund
Published Date:
June 2000
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Goal: Halve the proportion of people living in extreme poverty by 2015

Across the globe 1 person in 5 lives on less than $1 a day—and 1 in 7 suffers chronic hunger

In many developing countries, the poor struggle at the margin of the formal economy. They lack political influence, education, health care, adequate shelter, personal safety, regular income and enough to eat.

Progress in some regions—delays and setbacks in others

Boportion of people living on less than $1 a day (%)

“Poverty is pain; it feels like a disease. It attacks a person not only materially but also morally. It eats away one’s dignity and drives one into total despair.

Worldwide the number and proportion of people living in extreme poverty declined slightly through the mid-1990s. Most of the decline was in East Asia, notably China. But progress slowed temporarily in some Asian countries in the late 1990s, and ground to a halt or reversed in others. In the rest of the world, while the proportion of people in poverty declined, population growth meant that the number of poor people increased. And in the countries of the former Soviet Union, undergoing economic and social transition, the proportion of poor more than tripled.

Thailand alters its development path

Between 1988 and 1996 Thailand’s economy grew by 7% a year, and the share of the population in poverty dropped from 22% to 11%. But the country’s financial crisis pushed that share back up to 13% in 1998. In response, Thailand is redirecting Its development strategy to reduce inequality, which remained high despite all the growth.

The country’s development plan, now more people-centred, has increased resources to the poorer north and north-east. The objective: to reduce poverty to less than 10% by 2001. A new social investment fund helps create jobs and supports social services for the poor. As part of the new strategy, governance reforms are geared to increasing accountability and giving authority to local district councils, which now elect their own officials and command greater resources.

1.2 billion people living in extreme poverty

People living on less than $1 a day (millions), 1998

The numbers of poor are greatest in South Asia, but the proportion of poor people is highest in Sub-Saharan Africa. Most of the poor live in rural areas, but urban poverty is growing faster. Women are more likely than men to lack rights to land and other assets. They also have difficulty getting access to credit. And they lack adequate employment and economic security in old age.

Malnutrition—another dimension of poverty

Proportion of children under 5 who are underweight (%)

Reaching the goal—ambitious, not impossible

World population and number in extreme poverty (billions)

Today there are 150 million underweight children in the developing world. But the proportion of malnourished children is falling everywhere except Africa. Being underweight increases the risk of death and inhibits mental and physical development. And malnourished women are more likely to have underweight babies. Despite progress, special efforts will be needed to meet the World Food Summit goal of halving the number of undernourished people by 2015.

Poverty rates can be cut in half by 2015 if countries follow policies that reduce social and gender inequalities and create income-earning opportunities for the poor. But meeting the goal is only a first step, because almost 900 million people will still be left in extreme poverty. That is why the effort to eliminate poverty needs to be intensified.

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