Many reports tell about the increasing gaps between the 1% wealthiest people in the world and the rest, however there is another side of the coin. Economic growth benefits all people, even if the benefits are distributed unequally, and the current unprecedented growth in emerging economies is eradicating extreme poverty at a fast pace. In the 25 years since the fall of the Berlin Wall those earning between $2 and $10 a day have been the biggest beneficiaries of globalisation. In China, India and sub-Saharan Africa, subsistent economic growth has created a vast class of consumers who can buy products that would have been out of reach not many years ago, such as mobile phones, bicycles and a host of household goods.
The rich world may be engaged in a debate about rising inequality, but the rapid economic growth in China and other developing countries has made the world more equal.
Poverty reduction is a major goal for many international organisations such as the United Nations and the World Bank, and the latter published an informative infograph about the fight against poverty this month. The infograph shows we are living in an increasingly equal world. As Petri Kajander wrote about on this blog one year ago, it seems that the UN’s first Millennium Development Goal of cutting the 1990 extreme-poverty rate in half by 2015 has already been achieved. This means that the proportion of people living in extreme poverty (living on $1.25 or less a day) has been reduced from 43 % in 1990 (and 52 % in 1981) to a mere 18 % in 2010. In the smart infograph below we can see what remains to be done.
It is notable that more than half of the remaining extremely poor people in the world are in just three countries; China, India and Nigeria.