World Bank sees progress against extreme poverty, flags vulnerabilities

In every region of the developing world, the percentage of people living on less than $1.25-a-day and the number of poor declined between 2005-2008, according to estimates released today by the World Bank.
This across-the-board reduction over a three-year monitoring cycle marks a first since the Bank began monitoring extreme poverty, it claimed.Similarly, South Asia witnessed the $1.25-a-day poverty rate fell from 61 per cent to 36 per cent between 1981 and 2005 and fell a further 3.5 percentage points between 2005 and 2008. The proportion of the population living in extreme poverty is now the lowest since 1981, the global agency said, adding that its methodology is based on consumption and income, adjusted for inflation within countries and for purchasing power differences across countries.
An estimated 1.28 billion people in 2008 lived below $1.25-a-day, equivalent to 22 per cent of the population of the developing world. By contrast, in 1981, some 1.94 billion people were living in extreme poverty. The update draws on over 850 household surveys in nearly 130 countries. The year 2008 is the latest date for which a global figure can be calculated because, while more recent statistics for middle income countries are available, for low-income countries newer data are either scarce or not comparable with previous estimates.
More recent post-2008 analysis reveals that, while the food, fuel and financial crises over the past four years had at times sharp negative impacts on vulnerable populations and slowed the rate of poverty reduction in some countries, global poverty overall kept falling. In fact, preliminary survey-based estimates for 2010—based on a smaller sample size than in the global update—indicate that the $1.25-a-day poverty rate had fallen to under half of its 1990 value by 2010. It would mean that the first Millennium Development Goal (MDG) of halving extreme poverty from its 1990 level has been achieved before the 2015 deadline.
“The developing world as a whole has made considerable progress in fighting extreme poverty, but the 663 million people who moved above the poverty lines typical of the poorest countries are still poor by the standards of middle- and high-income countries,” director of the Bank’s Research Group and leader of the team that produced the numbers Martin Ravallion said, adding that the bunching up just above the extreme poverty line is indicative of the vulnerability facing a great many poor people in the world. “And at the current rate of progress, around one billion people would still live in extreme poverty in 2015.”
The $1.25 poverty line is the average for the world’s poorest 10 to 20 countries. A higher line of $2-a-day — the median poverty line for developing countries — reveals less progress versus $1.25-a-day.
Indeed, there was only a modest drop in the number of people living below $2-per-day between 1981 and 2008, from 2.59 billion to 2.44 billion, though falling more sharply since 1999. "Having 22 per cent of people in developing countries still living on less than $1.25-a-day and 42 per cent with less than $2-a-day is intolerable,” director of the World Bank’s Poverty Reduction and Equity Group Jaime Saavedra, said, adding that they need to increase the efforts. “On the policy and programme side, we need to continue attacking poverty on many fronts, from creating more and better jobs, to delivering better educational and health services and basic infrastructure, to protecting the vulnerable. And on the measurement side, countries need to expand data collection and strengthen statistical capacity, particularly in low-income countries.”