Extreme Poverty – A Global Overview

In the last blog post of this series about extreme poverty, we have compiled a set of measurement tools to define poverty in an income-based as well as multidimensional approach. Now we will use the headcount ratio and the poverty gap index to find out in which world regions extreme poverty is most intense.

Therefore, we will have a brief discussion of two charts by Max Roser from “Our World in Data”.

 

 

It shows us the yearly, country specific poverty gap indices since 1981. As the chart description states, the poverty gap index tells us the mean income shortfall from the International Poverty Line (IPL) as a percentage of the same. Thus, it tells us where poverty is most intense.

Looking at the data from 2014, our attention is first drawn to Africa. With poverty gap indices of e.g. 39 % in Congo and Madagascar in 2012, Africa seems to be the continent with the highest intensity of poverty. Asia has poverty hotspots in India (4 %) and Tajikistan (4 %), while Papua New Guinea (16 %) and Honduras (6 %) stand out in the Pacific and Middle America regions.

Considering the absolute numbers of people living in extreme poverty, we get similar but also more informative results: Africa and Asia are the continents where most of the people in extreme poverty live (383 Million and 327 Million). With 218 Million inhabitants in extreme poverty, India has the largest number of poor people in the world, Nigeria and Congo follow with 86 Million and 55 Million.

Using the time function in the chart above, we observe a particularly interesting development: China, having a poverty gap index of 43 % in 1981, has been able to decrease the intensity of poverty to a 0.35 % shortfall from the IPL by 2013. Considering Chinas poverty headcount ratio (the share of the population living in extreme poverty) of 88 % in 1981 and near 2 % by 2013 the improvements are even more remarkable.

That leads us to the global evolution of extreme poverty. Let’s have a look at this chart:

 

 

It shows us the poverty headcount ratio of all world regions from 1987 to 2013. This chart contains one of the most important results of this blog series: The share of people living in extreme poverty has been reduced heavily in the last two decades and is still declining.

That development not only involves the relative, but also the absolute numbers: While there were over 2 billion people living in extreme poverty in 1990, the World Bank recorded less than 705 million in 2015, a decline of almost 1.3 billion people in only 20 years.

Again, we recognize remarkable improvements in the region of East Asia and the Pacific. With a decline from 60 % in 1990 to 3.5 % in 2013 they have managed to lift almost 58 % of their population out of extreme poverty in only two decades.

Therefore, when we speak about extreme poverty, we should bear in mind that there has been huge process during the last decades and that there is a solid chance to wipe out extreme poverty from this planet. To have the greatest impact, we should focus our efforts on Sub-Saharan Africa and India as there is the greatest number of people who must live under such horrible conditions.

So, how can we help them? In the next blogpost, we will have a look at some charts about the causes of poverty and its decline. Maybe we can extract some useful implications out of that discussions.

 

Sources and further information:

This post is mainly based on the in-depth analysis of global extreme poverty:

  • Max Roser and Esteban Ortiz-Ospina (2017) – ‘Global Extreme Poverty’. Published online at OurWorldInData.org. Retrieved from: https://ourworldindata.org/extreme-poverty/ [Online Resource]

For further reading please visit the first post of this series to find a more comprehensive list of sources.

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