A world without extreme poverty is not far away

[I have become a stray dog whimpering in front of the closed doors of relatives in the hope that someone might open the door. (Georgian woman)


When I don’t have [any food to bring my family], I borrow, mainly from neighbors and friends. I feel ashamed standing before my children when I have nothing to help feed the family. I’m not well when I’like] m unemployed. It’s terrible” (Guinean man)


When one is poor, she has no say in public and feels inferior. She has no food, so there is famine in her house; no clothing, and no progress in her family. (Ugandan woman)


These sentiments, expressed in the World Bank’s seminal Voices of the Poor report, highlight the physical and emotional pain of extreme poverty. As I write over 1.3 billion of my fellow human beings know that pain. They live in absolute, extreme poverty.

Will it ever be different? Can we contemplate a world where extreme poverty is ended? Is it possible to end poverty? I believe we can and that it is quite possible that such a world will emerge in my grandchildren’s lifetime. The key is to look beyond poverty as it exists now to see the larger trends over time. And it is these trends that are encouraging.

1. Been There, Done That

It was only a few hundred years ago that extreme poverty was widespread in western societies. Sebastien Le Prestre described 17th century France like this:

The general run of people seldom drink, eat meat not three times a year, and use little salt. . . So it is no cause for surprise if people who are so ill-nourished have so little energy.  Add to this what they suffer from exposure: winter and summer, three fourths of them are dressed in nothing but half-rotting tattered linen, and are shod throughout the year with sabots [sandal of a strip of leather across the in-step], and no other covering for the foot…the extreme poverty to which they are reduced, owning as they do not one inch of land, rebounds against the more prosperous town and country bourgeois, and against the nobility and the clergy…Since hardship can hardly go much further, its normal effects are a matter of course: … it makes people weak and unhealthy, especially the children, many of whom die for want of good food. (Description Geographique de l’Election de Vezelay)

while in Poverty and Prosperity: The Urban Poor in England, 1834-1914, Charles Chin writes of those who didn’t share in the fabulous wealth brought about by industrialisation:

In the midst of prosperity there was much poverty. Millions of English people did not share in the profits of commercial and industrial success. Deprivation and distress were widespread and obvious. In each town and citiy, public and civic buildings were surrounded by slums. The poor crowded into these insanitary districts. They rented badly built dwellings which had inadequate facilities. They did the dirtiest, hardest and most dangerous jobs. They ate the worst food. They suffered ill health and early deaths. Poverty blighted their lives.

Just a few hundred years later this is a world we no longer recognise. Western nations have small pockets of extreme poverty, but on the whole have almost completely eradicated it. We have managed to effectively end poverty in the sense of extreme poverty. While part of our prosperity was built on the often ruthless exploitation of people and resources in their colonies, the key driver was productivity growth fueled by technological advances. There is no reason to think that other countries cannot take the same journey minus the imperialism. Indeed, given the technologies that have been developed over the last two hundred years there is good reason to think the ascent of poorer countries can be much more rapid than ours.

2. It has happened in my lifetime

South Korea is one of the world’s wealthy nations, with life expectancy, education  levels & income per capita  (purchasing power parity)  similar to Australia. But in 1965, the year I was born, the story was very different. Income per capita was just  US $1375 (purchasing power parity and adjusted for inflation), life expectancy was just 56 years and 8% of children died before their 5th birthday. The situation in South Korea was very similar to Bangladesh and Malawi of today (stats from gapminder.org). The country was ruled by a corrupt dictator, its infrastructure had been destroyed by war and it was written off as a “basket case”. A 1961 New York Times article described South Korea as

the poorer half of one of the poorest countries in the world… trying to exist as a nation with too many people and too few resources, dependent for the foreseeable future, perhaps for decades, upon the self-interest and charity of . . . the United States.

Yet in the course of my lifetime South Korea has grown into a prosperous nation whose citizens enjoy good health, long lives and many life possibilities. South Korea has managed to rapidly end poverty of the extreme type. If South Korea can do it there is no reason why Bangladesh, Malawi and Mozambique cannot do the same.

3. It’s happening right now

Although they are starting from a very low base many poorer countries are seeing rapid improvements in the lives of their people. Between 1990 and 2008, the number of people living on less than $1.25 a day declined from 1.9 billion to 1.3 billion. In East Asia the decline was staggering – in 1990 56% of the population lived in extreme poverty. By 2008 this had fallen to 14%.

A significant number of poorer countries are following the same path as South Korea. For the last ten years forty developing countries have averaged economic growth rates in excess of 5%pa, including Ethiopia (ave annual growth of 9.1%), Bangladesh (ave annual growth of 6.4%), Tanzania (ave annual growth of 7.5%), Vietnam (ave annual growth of 7.9%). Economic growth has been matched with increased spending on services that make a difference to poor communities.

In Bangladesh per capita income (purchasing power parity) has tripled from US $500 in 1980 to US $1500; child mortality has declined from 1 in 5 children in 1980 to 1 in 20 today;  65% of boys and girls complete primary school, up from less than 25%  in 1980; and the proportion of people living below the national poverty line has fallen from 57% to 32%.

Vietnam has seen astonishing gains. Per capita income (purchasing power parity) has quadrupled from US $660 in 1980 to US $2827; child mortality has declined from 6% of children in 1998 to less than 2.5% today;   and in the 10 years leading up to 1998, the proportion of people living below the national poverty line more than halved, from 37% to 15%.

There are plenty more stories like these. When we look at the figures for a single moment in time they are disturbing – in Bangladesh 5% of children die from preventable diseases and one third of the population live below the poverty line. Yet as heart breaking as these figures may be they should not rob us of hope, for when we look at the trends, even the world’s least developed countries are making dramatic progress.

It’s Not Automatic

Progress is not however automatic. As countries like Vietnam, Tanzania, and Bangladesh move forward, a handful of countries are going backwards and others are stagnant.  Sixteen developing economies have average annual growth of less than 1%, which with growing populations means that each year they have less money per person. The Democratic Republic of Congo, torn apart by civil war, has seen per capita income (purchasing power parity) dive from US $774 in 1980 to US $290 in 2009, the child mortality rate of 20% is unchanged since 1990, and students are no more likely to complete primary school today than in 1980 (around 60%).  (Statistics from UN Human Development Report 2011 and World Bank Data site)

Although development economist debate the nuances, it is widely recognised that to lift out of poverty communities need access to various forms of capital: human capital (healthy and educated people); physical capital (such as roads and electricity); natural capital (productive land); institutional capital (eg inclusive political systems, functioning public service); financial capital (ability to save and borrow); social capital (bonds of trust); and the like. When they have access to these types of capital and the know-how to use them to improve productivity they can generate wealth and improve their material well-being.

Tragically, poor people and countries can sometimes be locked out of access to capital and the ability to develop those assets. In his book The Bottom Billion Paul Collier identifies four such traps – conflict, natural resources, being landlocked with bad neighbours, and having bad governance in a small country. These make it difficult but not impossible for them to escape extreme poverty. Appropriate assistance from the international community is particularly important for these states.

Investments in infrastructure, health care, education and livelihoods of the poor make a huge difference. Between 1995 and 2010 per capita spending on healthcare in least developed countries more than tripled, from US $10.60 US $35 and operational education spending increased from US $8 per capita to US $9.15, both increases helping drive significant improvements in well being.

Continued progress will not be automatic. The poor need all the help we can offer. Nonetheless, I am hopeful. Extreme poverty is being overcome, can be overcome and could well be overcome in the life of my grandchildren. We can dream that we might end poverty.

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