World Bank Finds More People Live in Steep Poverty

World Bank Finds More People Live in Steep Poverty

WASHINGTON (Reuters) — The World Bank said Tuesday that more people were living in extreme poverty in developing countries than previously thought as it adjusted the recognized yardstick for measuring global poverty to $1.25 a day from $1.

The bank said there were 1.4 billion people — a quarter of the developing world — living in extreme poverty on less than $1.25 a day in 2005 in the world's developing countries. Last year, the bank said there were 1 billion people living under $1 a day.

The 2005 figures, the latest available, are likely to put fresh pressure on big donor countries to move more aggressively to combat global poverty.

Even so, the new estimates, based on updated global price data, show how progress has been made in helping the poor over the past 25 years. In 1981, 1.9 billion people were living below the $1.25 a day poverty line. The data are based on 675 household surveys in 116 countries.

"These new estimates are a major advance in poverty measurements because they are based on far better price data for assuring that the poverty lines are comparable across countries," said Martin Ravallion, director of the World Bank's Development Research Group.

While the developing world has more poor people than previously believed, the World Bank's new chief economist, Justin Lin, said the world was still on target to meet a United Nations goal of halving the number of people in poverty by 2015.

However, excluding China from overall calculations, the world fails to meet the United Nations poverty targets, Mr. Lin said.

The World Bank data show that the portion of people living below the $1.25 a day poverty line fell over nearly 25 years to 26 percent in 2005 from 52 percent in 1981, a decline on average of about one percentage point a year, he said.

Mr. Lin said the new data meant that rich donor nations needed to keep their promises of stepped-up aid to poor countries. "The sobering news that poverty is more pervasive than we thought means we must redouble our efforts, especially in sub-Saharan Africa," Mr. Lin said.

The new figures come ahead of an updated assessment of progress in meeting the United Nations' Millennium Development Goals, which will be released next month at a meeting of the General Assembly.

While most of the developing world has managed to reduce poverty, the rate in sub-Saharan Africa, the world's poorest region, has not changed in nearly 25 years, according to data using the new $1.25 a day poverty line. Half of the people in sub-Saharan Africa were living below the poverty line in 2005, the same as in 1981. That means about 380 million people lived under the poverty line in 2005, compared with 200 million in 1981.

Elsewhere, poverty has declined. In East Asia, which includes China, the poverty rate fell to 18 percent in 2005 from almost 80 percent in 1981, when it was the poorest region. In China, the number of people in poverty fell to 207 million in 2005 from 835 million in 1981.

In India, the number of people below the $1.25 a day poverty line increased to 455 million in 2005 from 420 million people in 1981. But the share of the population in poverty fell to 42 percent from 60 percent.