To people who believe that the world used to be a better place, and especially to those who argue that globalization has done more economic harm than good, there is a simple, powerful riposte: In 1981, some 42 percent of the world's population were extremely poor, according to the World Bank.
They were not just poorer than a large majority of their compatriots, as many rich countries define poverty among their own citizens today, but absolutely destitute. At best, they had barely enough money to eat and pay for necessities like clothes. At worst, they starved.
Since then, the number of people in absolute poverty has fallen by about 1 billion and the number of nonpoor people has gone up by roughly 4 billion. By 2013, the most recent year for which reliable data exist, just 10.7 percent of the world's population was poor. The modern yardstick for destitution is that a person consumes less than $1.90 a day at 2011 purchasing-power parity.
Poverty has almost certainly retreated further since 2013: the World Bank's estimate for 2016 is 9.1 percent. Homi Kharas of the Brookings Institution, a think tank, calculates that someone escapes extreme poverty every 1.2 seconds.
This is impressive and unprecedented.
Economic historians reckon that it took Britain about a century, from the 1820s to the 1920s, to cut extreme poverty from more than 40 percent of its population to below 10 percent. Japan started later, but moved faster. Beginning in the 1870s, the share of its population who were absolutely poor fell from 80 percent to almost nothing in a century. Today two large countries, China and Indonesia, are on course to achieve Japanese levels of poverty reduction more than twice as fast as Japan did.
Unfortunately, this happy chapter in world history is drawing to a close. The share of people living in absolute poverty will almost certainly not decline as quickly in the future — and not because it will hit zero and therefore have nowhere to fall. Even as the global proportion of poor people continues to drift slowly downward, large pockets of poverty will persist, and some of them are likely to swell. The war on want is about to settle into a period of grinding battles in the trenches.
Until recently the world's poorest people could be divided into three big groups: Chinese, Indian and everybody else.
In 1987, China is thought to have had 660 million poor people, and India 374 million. The concentration of destitution in those two countries was in one sense a boon, because in both places better economic policies allowed legions to scramble out of poverty. At the last count (2011 in India; 2013 in China) India had 268 million paupers and China just 25 million. Both countries are much more populous than they were 30 years ago.
In both countries, economic growth has benefited the poor as well as the rich, peasants as well as city-dwellers. The magic ingredient in China's poverty-reduction formula since the 1980s has been not its factories but its highly productive small farms. Much the same is true of other Asian countries.
Africa is as studded with examples of failure as Asia is filled with success stories. Look at Nigeria, said Kaushik Basu, an economist at Cornell University. In 1985 the share of Nigerians below the international poverty line was estimated to be 45 percent — a lower proportion than in China or Indonesia. Now Nigeria has a much higher share of poor people than either country.
Sub-Saharan Africa is not actually going backward. Its absolute poverty rate has fallen from 54 percent in 1990 to 41 percent in 2013. But because Africa's population is growing so quickly — by about 2.5 percent a year, compared with 1 percent for Asia — and because the poverty rate is declining only slowly, the number of poor Africans is higher than it was in the 1990s. With more destitute inhabitants than any other region, sub-Saharan Africa now drives the global poverty rate.
African poverty is particularly intractable. The first problem is that economic growth has been weak, considering the continent's swelling population.
A second problem is that many African governments are flimsy, incompetent, authoritarian or rapacious.
The third problem that poor people in Africa are commonly very poor indeed. Compare Rwanda with Bangladesh. Both are low-income countries; both are reasonably competently governed; both have grown well in the past few years. But Rwanda's poor are much poorer than Bangladesh's. Many get by on around $1 a day.
As extreme poverty disappears everywhere except in Africa and in Asian countries with weak welfare systems, the campaign to eradicate it is likely to slow. After decades of astonishing progress, a spell of sluggish poverty-reduction would be a great disappointment. It is possible to imagine a future in which the global poverty rate continues to drop even as poverty becomes more entrenched in a few unlucky countries, scarred by war and bad government.
