Thursday, March 01, 2012

Despite Food, Fuel and Financial Crises, World Bank Reports that Poverty Fell From 2005-2010

The Economist -- "The past four years have seen an economic crisis coincide with a food-price spike. That must surely have boosted the number of the world’s poor (especially since food inflation hits the poor hardest)—right? Wrong. New estimates of the numbers of the world’s poor by the World Bank’s Development Research Group show that for the first time ever, poverty—defined as the number and share of people living below $1.25 a day (at 2005 prices)—fell in every region of the world in 2005-08."  See below.

World Bank -- "The number of people in extreme poverty and the poverty rate declined in every region of the developing world during 2005-2008, the first time it ever happened over a three-year monitoring cycle since the World Bank started tracking extreme poverty.

The data released by the World Bank’s Development Research Group show that 22% of the developing world’s population – or 1.29 billion people – lived on $1.25 or less a day in 2008, down from 43% in 1990 and 52% in 1981 (see top chart above). The update draws on 850 household surveys conducted by nearly 130 countries, representing 90% of the developing world’s population. It covers 1981 to 2008, mainly because newer data from low-income countries are either scarce or not comparable with previous estimates, though more recent statistics are available for middle-income countries and a handful of poorer countries to allow preliminary estimates for 2010.

Those preliminary estimates indicate that by 2010 the $1.25-a-day poverty rate fell to less than half of the 1990 rate. That means the developing world has achieved, ahead of time, the United Nation’s first Millennium Development Goal of cutting the 1990 extreme-poverty rate in half by 2015. It also means most countries recovered quickly from the recent food, fuel and financial crises."


At 3/01/2012 9:58 AM, Blogger morganovich said...

i'm not sure this data necessarily supports the conclusions.

it's possible that it does, but if food and fuel are up a great deal and taking up more of the disposable income of those in and near global poverty, then chained dollars is a bad metric to use.

it would imply that their consumption baskets look like ours, which seems a very questionable premise.

a drop in the price of ipads or autos makes zero difference to someone living on $2 a day.

the economist data seems to be at PPP, but i am left wondering "whose PPP?" the world bank say it uses the "best available CPI index", but i am left wondering how reflective that is of the actual consumption basket of the poor and what manner of modifications have been made to the data.

i'm also left wondering how much effect swapping this buying power index into dollars had. the dollar has lost 1/2 its value since 2000 in relation to many currencies.

this is an interesting study to attempt to preform, but i'm not sure this methodology doesn't wind up occluding as much as it reveals.

At 3/01/2012 1:05 PM, Blogger kmg said...

The post-2000 steeper fall is due to India finally kicking into a higher gear.

India is where 40% of the world's ultra-poor still reside, so progress there dents this number the most.

At 3/01/2012 1:07 PM, Blogger kmg said...

but if food and fuel are up a great deal

The very poorest don't consume oil. Their 'fuel' is burning of garbage or manure.

Food : The food inflation in the US is more from processed food. The very basics (rice, beans, vegetables), have not risen much.

The very poorest do not eat processed, packaged food, nor do they eat meat beyond what they catch themselves.

At 3/01/2012 1:35 PM, Blogger morganovich said...


"The very basics (rice, beans, vegetables), have not risen much"

this is completely untrue.

since mid 2010, wheat prices have nearly doubled.

corn? up 80%

rice? up 18%

soy? up 25%

the commodity food price index has SOARED.

up 126% in a decade. that's 8.5% compounded annual inflation.

in fact, processed foods are up much less as producers lack as much pricing power.

At 3/01/2012 2:07 PM, Blogger Ron H. said...

kmg: ""The very basics (rice, beans, vegetables), have not risen much"

morganovich: "this is completely untrue.

since mid 2010, wheat prices have nearly doubled.

corn? up 80%

rice? up 18%

I suspect the take-away message here, is to refrain from making unsupported assertions while morganovich is watching.

At 3/01/2012 9:56 PM, Blogger kmg said...

Corn and soy are not staples of the very poorest (most of which are in South/SouthEast Asia).

Their food is :

Leafy Greens

There are no reports of 'increased starvation' which would show up in the World Bank data.

At 3/02/2012 11:19 AM, Blogger morganovich said...


i notice you provide no factual support for your position.

i doubt you could find it.

rice has exploded in price.

10 years ago it was $180/ton. it's now $540, a 200% increase, 11.6% a year compounded.

no reports of starvation?

what do you think set the egyptians off? it was food prices. the whole middle east is a powder keg over it.

try reading this:

"Africa famine: soaring food prices intensifying crisis, report warns

World Bank says shortages and near-historic prices for staple crops have contributed to the crisis in the Horn of Africa"

it would seem that, contrary to your claim, the world bank has been reporting famine and starvation.

"In global terms, food prices last month were on average 33% higher than a year ago, the report warned. Corn, or maize, has risen by 84%; sugar 62% and wheat 55%.

But the price rises were particularly severe in Africa. Corn prices doubled in Kampala, Mogadishu and Kigali over the last year, the report said.

Sorghum prices have increased more than fourfold, 240%, over last year in parts of Somalia, the report said."

i suggest you google "increased starvation food prices". you'll get a long list of studies, stories, and examples.

you seem to be inventing facts here or to have been badly misinformed.

the facts of this matter are quite clear and quite opposite to your claims.

At 3/02/2012 1:32 PM, Blogger Ron H. said...

kmg: "Corn and soy are not staples of the very poorest (most of which are in South/SouthEast Asia)."

It's important to note that higher prices for Corn and Soy cause some for whom those ARE staples, to substitute less expensive food sources, thus putting upward price pressure on those things that ARE staples of the very poorest.

A higher price for hamburger will cause some to eat more hot dogs instead, increasing the demand for hot dogs and raising their price. Those who can barely afford hot dogs, may be forced to eat dog food.

Starvation results from higher corn prices due to higher demand, because of this insane idea that it should be used in your car for fuel.


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