Sunday, 7 August 2011

How 28 poor countries escaped the poverty trap

Discussion on recent climbing-out of poverty of many countries.

Remember the poverty trap? ...

...Low-income countries are those with average gross national incomes (GNIs) of less than $1,005 per person per year.

And there are only 35 of them remaining out of the countries and economies that the World Bank tracks. That's down from 63 in 2000.

The remaining 35 low-income countries have a combined population of about 800 million. Tanzania, Burma, the Democratic Republic of the Congo, Ethiopia and Bangladesh account for about half of that total, and there are about 350 million people living on under $1.25 a day in the remaining low-income countries.


First, consider the good news that there are fewer poor countries around. Not least, it suggests that public and private investment (including aid) can help even the poorest countries get rich(er). This is one more reason why optimism should come back into fashion.

Second, the World Bank country classifications - which are used to help determine types and levels of support provided by many aid agencies - may need a rethink. They are based on a decades old formula, and on the idea that most poor people live in poor countries. But we know that middle-income countries now account for most of the world's population living in absolute poverty...

Third, as countries develop their own resources, fighting poverty becomes increasingly about domestic politics. Not surprisingly, this means inequality is rising up the agenda. New research shows that the emerging middle classes may have a big role to play. Who they side with - the poorest or the economic elite - will determine what kind of development emerges in the new middle income countries.


• Charles Kenny is a research fellow at the Center for Global Development and the author of Getting Better: Why Global Development Is Succeeding - And How We Can Improve the World Even More.

• Andy Sumner is a research fellow at the Institute of Development Studies and a visiting fellow at the Center for Global Development

H/t: Center for Global Development

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