World Bank says poverty down by half since 1981, but up in Africa.

WASHINGTON -- World poverty has dropped, the World Bank says, but the drop has not been even and in some places, such as Sub-Saharan Africa, it has grown.

The Bank's World Development Indicators 2004, reports that the proportion of people living in extreme poverty of less than $1 per day in developing countries has dropped by almost half from 40 to 21 per cent in 20 years from 1981 to 2001. Though rapid economic growth in East and South Asia has "pulled over 500 million out of poverty in those two regions alone, the proportion of poor has grown or fallen only slightly in many countries in Africa, Latin America, Eastern Europe and Central Asia."

More aid to developing countries, much more openness to trade and more widespread policy reforms are needed to achieve the first of eight Millennium Development Goals approved in 2000 to cut 1990 worldwide poverty levels in half by 2015 warns a recently released World Bank report on global poverty.

The report also shows that much of the decline in the absolute number of people living in extreme poverty--from 1.5 billion to 1.1 billion in 2001--occurred during the 1980's with a slowdown occurring in the ten years between 1990 and 2001. As well, Gross Domestic Product per capita rose in all developing countries by 30 per cent between 1981 and 2001 with it tripling in East Asia resulting in a drop from 58 per cent to 16 per cent of people living on less than $1 per day.

In addition, there has been a dramatic drop in poverty levels in China where the GDP per capita increased by five times since 1981 and the number of the extremely poor fell from 64 per cent to 17 per cent. However, much of this decline in poverty occurred in the first half of the 1980's.

"Economic growth in China and India has delivered a dramatic reduction in the number of poor, but other regions had not enjoyed sustained growth and, in too many cases, the number of poor has actually increased," said Francois Bourguignon, the Bank's Chief Economist.

The Bank also notes that in marked contrast to East and South Asia, poverty actually rose in Sub-Saharan Africa with a reduction in the GDP per capita of 13 per cent resulting in nearly double the number of people living in extreme poverty from 42 to 47 per cent of the region's population. Further, Eastern Europe and Central Asia economies also declined with the move from centrally-planned economies to free marketplace economies causing extreme poverty levels to go from zero in 1981 to six per cent in 1999.

Although the study indicates that the biggest gains in poverty reduction occurred where growth and trade coincided with "sustained efforts to develop human capital and foster a sound investment climate," the Bank warned that growth, by itself, is "no guarantee that poverty will be reduced quickly as its benefits are often slow in reaching the poor."

What is needed, the Bank says, are a number of remedies in addition to market growth, where the poor have access to basic services, such as health, education and nutrition, greater access to foreign markets, particularly a reduction in protectionism in agriculture and greater aid, especially to the poorest countries.

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