There’s no shortage of bad news, so how about some good news? Some really quite exceptionally good news, in fact.
While the world continues to grapple with wars, a refugee crisis and the reality of global warming, the number of people living in extreme poverty around the world has done down. A lot.
Two paths diverged
This chart shows that back in 1820, the vast majority of the world’s population lived in extreme poverty. That remained the case right through the first half of the 20th century.
After the Second World War, as the global population started to grow rapidly, so did the number of people in extreme poverty.
Around 1970, though, something fundamentally changed: as the population continued to grow, the number of people living in extreme poverty started to fall, and has been on a downward trajectory ever since. Around 2010, the figure dropped below 1 billion for the first time.
Extreme poverty is defined as living at a consumption (or income) level below 1.90 international dollars per day. International dollars are adjusted for price differences between countries and for price changes over time.
The progress of the past 200 years was achieved as economic growth brought higher incomes to more and more people in the world.
With the onset of industrialization and rising productivity, the share of people living in poverty has been decreasing, and continues to do so as further economic growth brings greater wealth.
So, where are the people living in extreme poverty?
This second chart shows where the world’s poorest live. Most live in Africa, although Asia is not far behind.
While it is sobering to see how many people still live in extreme poverty in these regions, the good news is that in both areas, economies are growing rapidly.
Africa has a young population with a growing labour force – a valuable asset in an ageing world. In 2034, Africa is expected to have the world’s largest working-age population of 1.1 billion.
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And Africa is still urbanizing, so much of the economic benefit lies ahead. Productivity in cities is three times as high as in rural areas and, over the next decade, an additional 187 million Africans will live in cities, according to the United Nations. This urban expansion is contributing to rapid growth in consumption by households and businesses.
Meanwhile, the country with by far the largest number of people in extreme poverty, India, is also growing rapidly.
The IMF predicts a robust growth rate of 7.6% for India’s economy in 2016 and 2017, and the World Economic Forum’s Global Competitiveness Report 2016-2017 singled out India as the most improved nation.
Reasons to be cheerful
So not only has the number of people living in extreme poverty around the world reached historic lows, but the economic conditions for those still struggling are actually looking very positive.
Africa and Asia still have a lot to do, but they are showing every sign of continuing to make rapid progress in lifting their populations out of extreme poverty.