WASHINGTON, April 23,
2004 — Rapid economic growth in East Asia has pulled
over 480 million people out of poverty since 1981, according
to figures released today by the World Bank. In large part
due to gains in East Asia, the proportion of people living
in extreme poverty (less than $1 a day) in developing
countries dropped by almost half between 1981 and 2001, from
40 to 21 percent of global population
In China alone, sustained growth has lifted more than 150
million people out of poverty since 1990. Vietnam has made a
remarkable progress in poverty reduction, with a drop in
overall poverty from 58% in 1993, to 37% in 1998 and 29% in
2002. Despite these gains, the proportion of poor has grown
– or fallen only slightly – in many countries in Africa,
Latin America and Eastern Europe and Central Asia.
This uneven progress raises concerns that the eight
Millennium Development Goals approved by 189 nations in
2000, the first of which is to halve 1990 poverty rates by
2015, may be beyond reach for some countries. “Economic
growth in China and India has delivered a dramatic reduction
in the number of poor,” said François Bourguignon, the
Bank’s Chief Economist. “But other regions have not
enjoyed sustained growth and, in too many cases, the number
of poor has actually increased. Although we are likely to
reach the first Millennium Development Goal of reducing
poverty by half worldwide by 2015, much more aid, much more
openness to trade, and more widespread policy reforms are
needed to achieve all the development goals in all
countries.”
The Bank’s annual statistical report, World Development
Indicators 2004 (WDI), released today, shows a drop in
the absolute number of people living on less than $1 a day
in all developing countries from 1.5 billion in 1981, to 1.1
billion in 2001, with much of the progress occurring in the
1980s. Between 1990 and 2001, the global decline in the
number of extremely poor people slowed somewhat, falling by
about 120 million—from 1.2 billion to 1.1 billion
people—while the proportion of poor people dropped from 28
percent to 21 percent of the total population.
Gross domestic product (GDP) per capita in all developing
countries rose by 30 percent between 1981 and 2001. The East
Asia region’s per capita GDP tripled over that period,
experiencing an average annual growth of 6.4 percent. The
region’s proportion of people living in extreme poverty fell
from 58 to 16 percent, and the absolute number pulled out of
extreme poverty since 1981 was more than 400 million.
Dramatic progress against absolute poverty has been made by
China, where GDP per capita went up five times since 1981
and the number of extremely poor fell from over 600 million
to slightly more that 200 million, or from 64 percent to 17
percent. About half of this progress was in the first half
of the 1980s.
These statistics present a picture of uneven progress in
reducing poverty, and strongly suggest that the biggest
gains occur where growth and trade coincide with sustained
efforts to develop human capital and foster a sound
investment climate. But growth, by itself, is no guarantee
that poverty will be reduced quickly, as its benefits are
often slow in reaching the poor.
Social investments needed to achieve Millennium
Development Goals
Even in regions experiencing rapid growth, the quality of
life among the poor often remained unchanged, in the absence
of adequate social investments. Worldwide, an estimated 840
million people, most of them in low-income countries, are
chronically undernourished.
“To increase the security of poor people, national poverty
reduction strategies must support their immediate
consumption needs and protect their assets by ensuring
access to basic services, including health, education and
nutrition,” said Martin Ravallion, manager of the Bank’s
poverty research program. “Enhancing security for poor
people means reducing their vulnerability to ill health and
economic shocks.”
In the East Asia and Pacific region, net enrollment of
children in primary education declined from 97 percent in
1991 to 92 percent in 2001. If current trends persist,
children in more than half of developing countries will
still not be attending a full course of primary education by
2015, as specified in the Millennium Development Goals. In
Vietnam, net enrollments have increased from 86 to 95 per
cent between 1993 and 2002, completion rates increased from
76 to 83 per cent between 1997 and 2002 (so dropout rates
have fallen) and triple shift schools have been virtually
eliminated.
Such disparities in social indicators outlined in WDI 2004
bear out the finding in the World Bank’s World Development
Report 2004 that public services in health, nutrition and
education often fail poor people. For example, in 20
developing countries with disaggregated data, child
mortality rates fell only half as fast for the poorest 20
percent of the population as for the whole population.
Worldwide, the under-five mortality rate was at 81 per
thousand live births in 2002, down from 95 in 1990. Much
faster progress is needed to reach the Millennium
Development Goal of reducing it to 32 per thousand births by
2015.
HIV/AIDS has infected more than 60 million people worldwide,
with more than 95 percent of them in developing countries,
and 70 percent in Sub-Saharan Africa, where it has resulted
in a drop in life expectancy from 48 years in 1980 to 46
years in 2002. There were almost a million new cases in
South and East Asia, where more than 7 million people now
live with HIV/AIDS. In Vietnam, the latest data from
Ministry of Health shows that there are more than 79,154 HIV
infected people, of them more than 12 thousand are AIDS
patient and nearly 7 thousand people have died from AIDS up
to end of March, 2004. In the first 3 months of 2004, the
number of people living with HIV/AIDS in Vietnam increased
by nearly 3 thousand.
The disparities that persist between regions and within
countries on life expectancy, child and maternal mortality,
school enrolment and completion, gender equity and progress
against communicable diseases remain a major obstacle to
achieving many of the development goals. “Continued progress
in poverty reduction,” the WDI notes, “depends on economic
growth and the distribution of income.”
Access to markets for sustained growth
To achieve and sustain the levels of economic growth needed
to reduce poverty, developing countries need greater access
to foreign markets. Although trade accounts for a larger and
faster-growing share of developing countries’ output than is
the case with the wealthy countries, many obstacles remain
to developing countries’ realizing their full potential
participation in global trade in goods and services. Some 70
percent of the world’s poor live in rural areas and depend
directly or indirectly on agriculture, but two-thirds of the
world’s agricultural trade originates in the rich OECD
countries, the WDI reveals. This occurs, in part, because
rich countries spend about $330 billion a year to subsidize
their agricultural producers. Reduced protection in
agriculture would account for two-thirds of the gains from
full global liberalization of all merchandise trade, with
many of the potential benefits accruing to low-income
farmers in developing countries.
While merchandise, including commodities and manufactured
goods, dominates developing-country trade, exports of
computer, financial, information and other business services
are gaining in importance. Also, increased globalization has
enabled greater labor mobility, resulting in the growing
importance of remittances in reducing poverty.
Meeting the promise of Monterrey
In addition to liberalization of trade by both rich and
developing countries, increased aid flows, especially to the
poorest countries, are needed to eradicate extreme poverty
and achieve the Millennium Development Goals. Net aid flows
to developing and transition countries reached $70 billion
in 2002, up from $54 billion in 1997, the WDI reports. More
than a quarter of these flows went to Sub-Saharan Africa,
where they represent 32 percent of that region’s gross
capital formation. But middle-income countries, including
China, Serbia and Montenegro, West Bank and Gaza, and
Pakistan, received about half of total net aid.
To achieve the development goals, the poorest countries need
much more aid in addition to ongoing debt reduction. The WDI
reports that development assistance accounted for an average
of 0.59 percent of government disbursements among the 22
OECD aid donors in 2002, and 0.23 percent of their gross
national income (GNI). Military expenditures in the
high-income countries, meanwhile, represented 11 percent of
government spending and 2.4 percent of GDP in 1998. In the
low- and middle-income countries, military spending occupied
even more of the national pie: 12.3 percent of government
expenditure and 2.6 percent of GDP in 1999.
Importance of statistical capacity-building
The Bank’s annual World Development Indicators is an
important contribution to monitoring progress towards
achieving the Millennium Development Goals. The quality of
monitoring, however, depends on increased capacity of
developing countries to gather, analyze, and disseminate
statistics. Governments, politicians and managers need
reliable data. So do citizens, in order to hold governments
accountable for their actions. Building such capacity is
vital to meeting the commitments made at the Second
Roundtable on Development Results in Marrakech in February
2004, to which the World Bank is making an important
contribution. This includes support for preparations for the
2010 censuses, establishing international household survey
network, and preparing national statistical development
strategies by low-income countries by 2006.
“World Development Indicators reflects the strengths and
weaknesses of the international statistical system,” said
Shaida Badiee, Director of the Bank’s Development Data Group.
“Improving them is not just a technical challenge, but a
development issue, because data, statistics and indicators
are at the heart of the development results agenda.”
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