Fighting poverty in emerging markets: The glove goes on

The Economist, 11/26/09

Between them, Brazil, China and India account for half the world’s poorest people and an even bigger share of those who have escaped poverty. In 1981, 84% of China’s population was below the poverty line of $1.25 a day (in 2005 prices); in 2005 the share was just 16% (see chart). This amounted to a 6.6% proportionate annual rate of poverty reduction—the difference between the growth rates of the number of poor and the total population.

Nobody did as well as China. Brazil’s share of those in poverty fell by half from 17% to 8%, an annual reduction of 3.2%. India did least well, cutting the share below the poverty line from 60% to 42% between 1981 and 2005. This implies an annual reduction of 1.5% a year, though there are problems with Indian statistics; using different consumption figures yields an annual reduction of 3%, comparable to Brazil’s.

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