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And that progress is truly impressive. In 1990, 52 percent of the population in the developing world lived below the poverty rate of $1.25 a day. That number was halved by 2008, when 22 percent lived below the poverty rate. Progress has been most dramatic in East Asia, particularly China, which has seen the greatest surge in economic growth. In the 1980s, according to the World Bank report, East Asia had the world’s highest poverty rate, with 77 percent of the population living below the poverty rate as recently as 1981. By 2008, that number had plunged to 14 percent. The report points out that in China alone, 662 million people are no longer living poverty. Not only is no one “dying” due to economic growth, but literally millions of lives have been bettered thanks to economic gains.
China may be the most spectacular example of economic growth’s unmatched capacity to improve the lives of the poor, but it is not an exception. Africa, so long associated with extreme poverty, is also making strides on poverty reduction thanks to economic growth. In a 2010 study, economics professors Maxim Pinkovskiy and Xavier Sala-i-Martin found that, as a result of sustained economic growth over the past 15 years, Africa has experienced a consistent decline in poverty – so consistent that, if trends hold, Africa could reach the United Nations’ Millennium Development Goal of halving the number of people earning less than $1 a day between 1990 and 2015 by next year, two years ahead of schedule.
Africa’s success is especially noteworthy because it has not been limited to countries with natural resources, such as South Africa’s diamonds or Nigerian oil. On the contrary, the authors note that poverty has fallen “for both landlocked and coastal countries, for mineral-rich and mineral-poor countries, for countries with favorable and unfavorable agriculture, for countries with different colonizers, and for countries with varying degrees of exposure to the African slave trade. The benefits of growth were so widely distributed that African inequality actually fell substantially.”
Poverty reduction through economic growth is thus one of the great success stories of recent decades. And that work is not done. Even with the recent rate of economic progress, an estimated one billion people across the world will still live on less than $1.25 per day in 2015. Achieving sustained reduction in poverty will remain the great cause of the 21st century.
Yet it’s hard to see how the World Bank will help that cause if led by an open critic of economic growth like Jim Yong Kim. The bank doesn’t lack its critics, to be sure, and there is considerable debate about whether the institution is really effective. But it’s hard to see how its reputation will be redeemed by a World Bank president who seems to believe that the greatest danger to the global poor comes from the only proven strategy to improve the quality of their lives.
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