2016: Reasons to be cheerful?

Hmmm. This is a claim that is often made.  It is based on figures supplied by the World Bank but the World Banks methodology has been fiercely contested.  There certainly has been improvement – above all in China – but progress has not been quite so significant as the World Bank would have us believe The most widely accepted quantitative measure of absolute poverty today is what was first introduced in the 1990 World Development Report – namely, an income at that time of less than $1 per day.  Using this measure, the World Bank calculated that the proportion of the population of the developing countries living in absolute poverty had fallen from 28 per cent in 1990 to 21 percent in 2001 – that is, to 1.1 billion people. By 2004 this figure declined  to 985 million .  (http://en.wikipedia.org/wiki/Poverty#Absolute_poverty)   This seems like making good progress but if you raise the threshold to $2  per day, on the other hand, the picture is somewhat less promising, suggesting what statisticians call a "bunching effect".  The World Bank itself has conceded there has been only a relatively small drop in the number of those who make less than $2 a day, from 2.59 billion in 1981 to 2.44 billion in 2008  ("A fall to cheer: For the first time ever, the number of poor people is declining everywhere The Economist 3.3.2012.)  In other words the numbers of people just above the official poverty line have not declined that much and moreover are highly vulnerable to falling back into official "absolute poverty".    I see the graph displayed in the Guardian is based on a figure of $1.90 per day.  This is significantly above the original $1 per day but it should be remembered that for a long time the World Bank in the face of mounting criticism held out against raising the minimum threshold which was seen as increasingly unrealistic in the context of rising cost of living – in particular food prices – in recent years. It was only in August 2008 that the World Bank decided to overhaul its estimates of absolute poverty and introduced a new base line of $1.25 which retrospectively raised the number of people living in absolute poverty to 1.4 billion in 2005.  If the new figure is now $1.90 this would obviously inflate the number of people living in absolute poverty back in 1990 by comparison with a figure of 1 dollar day and so present a somewhat misleading view of progress made since then However, the threshold of absolute poverty stills seems to be  a fairly conservative one in the view of some of the Bank's critics (http//www.stwr.org/globalisation/world-bank-poverty-figures-what-do-they-mean.html). The point is that the lower the poverty threshold you use the lower the number of people that appear to be subject to absolute poverty and if  therefore you want to provide the most positive possible spin on your efforts at combating absolute poverty it becomes important to keep your poverty threshold as low as possible and for as long as possible. Adam Parsons in an article in Counterpunch ("Should We Celebrate a Decline in Global Poverty?", Counterpunch 16-18 Mar 2012) notes   The World Bank is the monopoly provider of global poverty figures, and it is no secret that they are often used to support the view that liberalisation and globalisation have helped to reduce poverty worldwide. In other words, a reduction in global poverty can usefully defend the Bank’s neoliberal policies that favour economic growth and free markets as the overruling means to combating poverty    A further criticism, as Parsons points out  "centres on the Bank’s use of the ‘purchasing power parity’ (PPP) adjustment, which many economists argue is a flawed method for comparing households across countries or currencies. As Reddy and Pogge have consistently shown, these adjustments typically overstate the ability of the poor to purchase basic necessities." In short, they do not adequately reflect relative prices of basic commodities between different countries.   For instance, the base line figure of  $1.25 per day used by the World Bank in 2008  to facilitate international comparisons in the extent of absolute poverty would in practice not be enough to meet even minimal food intake requirements in a country like,say, the United States – let alone cover cover other costs of living.  Why then entertain such an unrealistically low threshold for absolute poverty in this instance?  Indeed, it is for this reason that the official poverty threshold has been pitched significantly higher within developed countries themselves thereby ignoring the figures used by the World Bank for the purpose of international comparison.   For instance, in 1997, a figure of $14.40  per day was proposed by Tim Smeeding in a study for the United Nations Development Program which corresponded to the "single person poverty line in the United States in 1985 dollars" This figure was deemed to be more realistic for a country like the United States and was subsequently used by UNDP and  the International Labour Office in its "Key Indicators of the Labour Market" to arrive at estimates of poverty rates there (http://www.csls.ca/events/cea01/sharpeilo.pdf) .   This controversy over the benchmarking of absolute poverty demonstrates the difficulty of trying to define it without resorting to value judgements. One of the earliest attempts was  Seebohm Rowntree's classic study of  poverty in York in 1899, which prompted the UK government to apply a "budget standards" approach to poverty alleviation.  To render such an approach more realistic required rethinking and updating what was meant by a minimally acceptable level in the light of changing circumstances.  Absolute poverty, one might say, is only relatively absolute. 

Yes I agree.  Will come in handy for Quora.