Poverty Rate to Improve Except for the Poorest of Poor
A new working paper* from the International Monetary Fund has generally good news about the prospects for further alleviation of poverty around the world, except for the poorest of the poor.
“The poverty rate is seen to decrease from 1970 to 2000 for all poverty lines, and significantly
so for all, but the lowest poverty line. One can therefore with a reasonable degree of
confidence conclude that relative poverty has decreased,” the paper finds.
The poverty rate is expected to continue to fall sharply from 57.2 percent in 2000 to 49.7 percent in 2010 at a poverty line of one-half of the mean.
“At a poverty line of one-sixth of the mean the decrease in the poverty rate is somewhat lower (from 20.0 percent to 17.7 percent), but at a poverty line of one-tenth of the mean the poverty rate is forecasted to increase (from 8.9 percent to 9.2 percent). Encouragingly, the poverty gap improves for all three poverty lines, but the lower is the poverty line the smaller is the improvement.”
“In line with the results obtained earlier for the 1990s, the tentative conclusion therefore is that there are good prospects for continued poverty alleviation in the 2000s with the exception of poverty alleviation among the poorest of the poor.”
“The significant lowering of relative poverty is impressive and suggestive of major structural changes having taken place in the world economy over this period, ” the paper concludes.
“However, the data also indicate a worsening relative income outcome among the world’s poorest particularly in the 1990s (with indications that this trend continues in the 2000s). This latter result should temper anyone’s optimism with regard to the progress having been made in the fight against poverty.”
*Global Relative Poverty
Prepared by Lynge Nielsen
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