Poverty Trends and Voices of the Poor-may2001

7/27/2019 Poverty Trends and Voices of the Poor-may2001

1/62

Poverty Trends and Voices of the

Poor

Fourth editionMay 2001


2/62

Poverty Reduction and Economic Management/ Human Development/ Development Economics The World Bank Group

Poverty Trends and Voices of the PoorMay 2001

Abbreviations and Acronyms ......................................................................................................................2

Introduction................................................................................................................................................... 3

Income Poverty ............................................................................................................................................. 5

The latest global numbers ..........................................................................................................................5Recent regional trends................................................................................................................................9

East Asia and the Pacific ..................................................................................................................... 10South Asia ...........................................................................................................................................10Sub-Saharan Africa .............................................................................................................................11Latin America and the Caribbean........................................................................................................ 12Eastern Europe and Central Asia.........................................................................................................13Middle East and North Africa .............................................................................................................14

Prospects for poverty reduction ...............................................................................................................14Income growth..................................................................................................................................... 15Consumption trends.............................................................................................................................15

Distribution .........................................................................................................................................16Scenarios ............................................................................................................................................. 17Trends in inequality ................................................................................................................................. 24

Social Indicators.......................................................................................................................................... 26

Population ................................................................................................................................................ 26Health.......................................................................................................................................................27

Life expectancy ................................................................................................................................... 27Infant, child, and maternal mortality ................................................................................................... 27Malnutrition......................................................................................................................................... 29Health status and health care services for the poor.............................................................................. 30The problems of AIDS and malaria..................................................................................................... 32

Education ................................................................................................................................................. 34Primary enrollments ............................................................................................................................34Education of girls ................................................................................................................................ 35Education for the poor......................................................................................................................... 37

The Environment...................................................................................................................................... 38Water and sanitation............................................................................................................................ 38

What the Poor Say ......................................................................................................................................40

The Good Life and the Bad Life ..............................................................................................................40What Makes the Good Life...................................................................................................................... 41

1. Material Wellbeing..........................................................................................................................412. Physical Wellbeing..........................................................................................................................423. Security ...........................................................................................................................................424. Freedom of Choice and Action........................................................................................................ 43


3/62


Abbrev iat ions and Acronym s

GDP Gross Domestic ProductGEP Global Economic ProspectsHIV Human Immunodeficiency VirusIDG International Development GoalsNGO Non-Governmental OrganizationOECD Organisation for Economic Cooperation and DevelopmentPPP Purchasing Power Parity

WDI World Development Indicators


4/62


Introduct ion

Poverty is like heat; you cannot see it; you can only feel it; so to know poverty youhave to go through it. Adaboya, Ghana.

Poverty is a multidimensional phenomenon, encompassing inability to satisfy basicneeds, lack of control over resources, lack of education and skills, poor health,malnutrition, lack of shelter, poor access to water and sanitation, vulnerability to shocks,violence and crime, lack of political freedom and voice. So when we want to look at

what happens to poverty, we look at a number of indicatorsthis is the approach takenalso by the OECD and others in defining the indicators to track the InternationalDevelopment Goals1and listen to the voices of the poor. This note contains newinformation on income poverty and social indicators by region and country, which showhow living conditions have deteriorated substantially over the last decade for manyAfricans; it also reports on and on the findings of the study on Voices of the Poor.

The poor are the true poverty experts. In preparing its World Development Report2000/01: Attacking Poverty, the World Bank wanted to make sure the voices of thepoortheir experiences, priorities, and recommendationswould be taken into account.The result was Voices of the Poorwhich gathers the voices of 60,000 poor men andwomen from 60 countries. The study consists of two parts and was carried out inpartnership with research institutes and NGOs. First, a review was conducted of 81participatory poverty studies conducted in the mid to late 1990's covering 40,000 poorpeople in 50 countries around the world. The second was a series of new studies in 23

countries covering 20,000 poor men and women.

The results emerging from both the new estimates and the Voices of the Poorstudy arestrikingly similar. The numbers show little progress in reducing income poverty over thelast decadeimpressive gains were made in East Asia before the crisis hit, but have beenpartly reversed, and little if any progress took place elsewhereand a large majority ofpoor people said they are worse off now, have fewer economic opportunities, and livewith greater insecurity than in the past. Poor people describe repeatedly and in

distressing detail what has only been glimpsed before, the psychological experience andimpact of poverty.

Trends in social indicators show that, while there has been steady progress in averageindicators of health and education, there are areas of worsening, and in all areas theincome poor are systematically worse off than the non-poor. Poor peoples experiences


5/62


rated as important. Corruption, rudeness and poor quality services seemed to be thenorm, whether in health care or in programs of social support. But the poor still greatly

value government programs, and feel governments have important roles to play in theirlives. The presence of NGOs in the various countries is uneven, but where they are atwork their contributions are generally appreciated. The poor find their own localnetworks and institutions to be the most dependable. Gender relations are in troubledtransition, with violence against women frequent.


6/62


Income Poverty

The latest global numbers

Extreme poverty declined only slowly in developing countries during the 1990s: the shareof the population living on less than $1 a day fell from 28 percent in 1987 to 23 percentin 1998, and the number of poor people remained roughly constant, as the populationincreased.The share and number of people living on less than $2 per daya morerelevant threshold for middle-income economies such as those of East Asia and LatinAmericashowed roughly similar trends (see tables 1 and 2).

It should be emphasized that these historical estimates are subject to some uncertainty.Up-to-date survey and price data are not available for all countries, and the quality ofhousehold surveys can vary considerably between countries and over time. Somecountry surveys yield income measures of living standards, while others yieldconsumption measures, and these two sources are likely to give different povertyestimates for the same underlying population.2 Further, the international measure of

poverty used here is subject to error because of the difficulties involved in estimating PPPexchange rates. Despite these weaknesses, the estimates provide a fairly reliable view ofpoverty trends at the aggregate level, due to the substantial increases in the coverage ofhousehold surveys and in data accuracy over the past few years.


7/62


Table 1. Population l ivi ng on less than $1 per day and headcount index in developing

countr ies, 1987, 1990 and 1998

Region

Populationcovered by at

least one survey(percent)

Number of people living on less than $1 a day(millions)

1987 1990 1998

East Asia and the Pacific 90.8 417.5 452.4 267.1(excluding China) 71.1 114.1 92.0 53.7

Eastern Europe andCentral Asia 81.7 1.1 7.1 17.6

Latin America and theCaribbean 88.0 63.7 73.8 60.7

Middle East and NorthAfrica 52.5 9.3 5.7 6.0

South Asia 97.9 474.4 495.1 521.8Sub-Saharan Africa 72.9 217.2 242.3 301.6

Total 88.1 1,183.2 1,276.4 1,174.9(excluding China) 84.2 879.8 915.9 961.4

Region



Headcount index(percent)

1987 1990 1998

East Asia and the Pacific90.8 26.6 27.6 14.7

(excluding China) 71.1 23.9 18.5 9.4Eastern Europe and

Central Asia 81.7 0.2 1.6 3.7

Latin America and theCaribbean 88.0 15.3 16.8 12.1Middle East and North

Africa 52.5 4.3 2.4 2.1South Asia 97.9 44.9 44.0 40.0Sub-Saharan Africa 72.9 46.6 47.7 48.1

Total 88.1 28.3 29.0 23.4(excluding China) 84.2 28.5 28.1 25.6

Source: Global Economic Prospects and the Developing Countries 2001.Notes: The $1 a day is in 1993 purchasing power parity terms. The numbers are estimated from

those countries in each region for which at least one survey was available during the period 1985-98. The proportion of the population covered by such surveys is given in Column 1. Survey datesoften do not coincide with the dates in the above table. To line up with the above dates, the surveyestimates were adjusted using the closest available survey for each country and applying theconsumption growth rate from national accounts. Using the assumption that the sample ofcountries covered by surveys is representative of the region as a whole, the numbers of poor arethen estimated by region. This assumption is obviously less robust in the regions with the lowest

Th h d t i d i th t f th l ti b l th t li


8/62


Table 2. Population l ivi ng on less than $2 per day and headcount index in developing

countr ies, selected years, 1987, 1990, and 1998

Region



Number of people living on less than $2 a day(millions)

1987 1990 1998

East Asia and thePacific 90.8 1,052.3 1,084.4 884.9(excluding China) 71.1 299.9 284.9 252.1

Eastern Europe andCentral Asia 81.7 16.3 43.8 98.2

Latin America and theCaribbean 88.0 147.6 167.2 159.0

Middle East and NorthAfrica 52.5 65.1 58.7 85.4

South Asia 97.9 911.0 976.0 1,094.6Sub-Saharan Africa 72.9 356.6 388.2 489.3

Total 88.1 2,549.0 2,718.4 2,811.5(excluding China) 84.2 1,796.6 1,918.8 2,178.7

Region

Population

covered by atleast one survey

(percent)Headcount index

(percent)

1987 1990 1998

East Asia and thePacific 90.8 67.0 66.1 48.7(excluding China) 71.1 62.9 57.3 44.3

Eastern Europe and

Central Asia 81.7 3.6 9.6 20.7Latin America and the

Caribbean 88.0 35.5 38.1 31.7Middle East and North

Africa 52.5 30.0 24.8 29.9South Asia 97.9 86.3 86.8 83.9Sub-Saharan Africa 72.9 76.5 76.4 78.0


Source: Global Economic Prospects and the Developing Countries 2001.Notes: The $2 a day is in 1993 purchasing power parity terms. See notes to table 1.


9/62


Figur e 1. Number of Poor li ving below $1 per day in developing countri es, 1987 and

1998 (mil li ons)

1.163.7

217.2

417.5

474.4

9.3

Eastern Europe and

Central Asia

Middle East and

North Africa Latin America and the

Caribbean

Sub-Saharan

Africa

East Asia and

the Pacific

South

Asia

(0.1%)

(0.8%)

(5.4%)

Number of Poor (millions):

1,183.2

(100.0%)

(18.4%)

(35.3%)

(40.1%)

1987

301.6

17.660.7

521.8

6.0

South Asia

Eastern Europe

and Central Asia

Middle East and North

Africa Latin America and the

Caribbean

Sub-Saharan Africa

(1.5%)

(0.5%)

(5.2%)

(25.7%)(44.4%)

1998


10/62


Figure 2. Population li ving below $1 per day in developing countr ies, 1987-1998.

Headcount I ndex (percent)

Recent regional trends

In general, poverty declined in countries that achieved rapid growth, and increased incountries that experienced stagnation or contraction. Indeed, the overall decline inextreme poverty during the 1990s was driven by high rates of growth in countries withlarge numbers of poor people. For example, China accounted for a fourth of the total

number of poor at the start of the decade, and per capita GDP during the 1990s rose by 9percent per year, so that by 1998 China contributed less than one-fifth to the worldspoor. Nevertheless, the decline in poverty in rapidly-growing countries was slowed byincreases in inequality in a number of countries with a large number of poor, in particularin China, India, Bangladesh, and Nigeria.3 Income inequality is an important factor indetermining poverty outcomes (see below, Trends in inequality).

14.7

12.1

2.1

48.1

27.6

26.6

1.6

3.7

0.2

16.8

15.3

2.44.3

44.040.044.9

47.7

46.6

0.0

10.0

20.0

30.0

40.0

50.0

60.0

1987 1990 1998

East Asia and the Pacific Eastern Europe and Central Asia Latin America and the Caribbean

Middle East and North Africa South Asia Sub-Saharan Africa

HeadcountIndex(PercentP

oor)


11/62


East Asia and the Pacif ic

In East Asia, poverty declined most rapidly during the 1990s, falling sharply in China.However, growth in Chinas poorer and more rural western provinces was much slowerthan in the more industrialized east. This divergence reflects slow growth in ruralincomes related to declining prices for agricultural products and reduced opportunities foroff farm employment. This wideningof income inequality slowed the rate of povertyreduction for the country as a whole.4 Elsewhere in the region, poverty increased in theaftermath of the 199798 financial crisis. In Indonesia, the government responded to thecrisis by strengthening safety nets, which helped cushion the impact of the crisis.

However, the incidence of poverty still increased substantially, doubling from its pre-crisis level. Since early 1999, there have been indications that poverty has declinedsignificantly as rice prices have fallen, and real wages are starting to recover.

Survey results based on nationalpoverty lines, notthe $1/day lines, indicate increasesin poverty in urban Korea (from 8.6 to nearly 23 percent at the peak of the crisis, anddown to 15.7 percent by the end of 1998), but smaller increases than expected inThailand, where the urban middle class seems to have been hit hardest.

In Vietnam, the incidence of poverty, as defined on the basis of the national povertyline, dropped from 58 percent in 1993 to 37 percent in 1998. The big gains forpoverty reduction came from but were not limited to growth of per capitaexpenditures, stimulated by agricultural diversification and economic growth.Poverty incidence among ethnic minorities, though, came down at a slower rate andremains high (75 percent in 1998 versus 86 percent in 1993). Poverty among childrenunder 15 years old is also declining (from 66 percent in 1993 to 47 percent in 1998)but keeps being higher than the average.

In Cambodia the incidence of poverty, as measured by the national poverty line,declined modestly between 1993/94 and 1997 (from 39 percent to 36 percent), andrural poverty declined less than urban poverty.

South Asia

In South Asia, the share of the population living in poverty declined moderately through

the 1990s, but not sufficiently to reduce the absolute number of poor. Household surveydata indicate limited growth in average consumption in rural areas, reflecting slowgrowth in agriculture.Urban poverty appears to have declined at twice the rate of povertyin rural areas. However, poverty data in India are subject to considerable uncertainty. Inparticular, private consumption as measured in the national accounts has grown about


12/62


three times faster over the 1990s than household consumption as measured by theNational Sample Survey. Discrepancies are to be expected, as the two sources track

different aggregates.5

Moreover, the survey data tends to understate the consumption ofhigher-income households. Nevertheless, the size of this difference and the slowness ofpoverty reduction revealed in the survey data are difficult to account for, particularlygiven the improvement in human development indicators. Thus more accurate data couldindicate more rapid poverty reduction than our current estimates.

In Bangladesh, steady growth reduced the incidence of poverty during the 1990s, incontrast to the relative stagnation experienced in the 1980s. Poverty in urban areasfell at a considerably faster rate than rural poverty, partly reflecting slower growth inrural wages and higher rural unemployment. Landlessness has been key in holdingback the reduction of poverty in rural areas.6

Performance has been poor in Pakistan: low growth rates throughout much of thenineties, a very weak human resource base, and a slowdown in poverty reduction. InSri Lanka, there has been very slow progress in reducing poverty despite adequateGDP growth.

Sub-Saharan Af r ica

In Africa, slow growth increased both the share and number of the poor over the 1990s;Africa is now the region with the largest share of people living below $1 per day.

In Nigeria, which now accounts for nearly one-fourth of Sub-Saharan Africas poor,the number of people living in extreme poverty rose steeply following the reversal ofthe 1985-92 reforms, reaching an estimated 70 million (66 per cent of the population)

based on the national definition (rather than the international, $1 a day definition).Urban poverty in the country has grown faster than rural poverty, owing to massivemigration from rural areas to the cities, with the incidence of urban poverty nowmatching that of rural poverty.

By contrast, the rural poverty rate fell in Ethiopia, Sub-Saharan Africas second mostpopulous country and one of the poorest. The reforms implemented after the end ofthe civil war in the early 1990s spurred a strong recovery, ending a two-decadeslump. The benefits of agricultural price liberalization have spread quickly, boosting

growth of rural incomes. Urban poverty, on the other hand, has been stagnant. Urbaninequality has risen, in part due to large population movements resulting from thecivil war, and in part as a result of economic reform, as agricultural priceliberalization raised consumer prices in urban areas and civil service rationalizationreduced urban employment. Unfortunately, progress is likely to have been slowed bythe border conflict.


13/62


In African countries like Burkina Faso (between 1994 and 1998), Ghana (between1988 and 1992) and Zambia (between 1991 and 1996) the percentage of people

living below the national poverty line decreased in rural areas while at the same timeincreasing in urban areas.

Security is a massive problem for the region. Internal conflict and civil war continueto threaten lives and livelihoods, and we have evidence from participatoryassessments that the poor are particularly anxious about conflict and what it meansfor their lives and those of their children. Uncertainty due to lack of security onlyadds to uncertainties due to the vagaries of the weathermany households fear theywill run out of food before the next harvest. The problem is exacerbated by the

general absence of safety nets, such as workfare programs. These trends are leading to polarization in Africa. Countries with civil order, political

openness and sound economic management saw improved economic performanceand better outcomes for the poor (Cte d'Ivoire, Ghana, Mauritania, Tanzania andUganda). Other countries slipped into disorder and experienced a breakdown of thestate and institutions, with profound effects on poverty (Burundi, Rwanda, SierraLeone, Somalia, Sudan etc.) The immediate challenge is to help countries in themiddle countries like Cameroon, Chad, Kenyaso that they can achieve better

living standards for their people.

Latin America and the Cari bbean.

In Latin America both the share and the number of poor declined between 1990 and1998.

In Brazil successful stabilization has stepped up the reduction of poverty, with thepoor gaining from stronger growth and the decrease in inflation. Nonetheless, theirlivelihoods remain vulnerable. Evidence from employment surveys in metropolitanareas shows large swings in poverty, with an upturn in the poverty rate in the wake ofthe 1997-99 crisis and a decrease since late 1999 thanks to the rebound in growth.Low educational attainment has helped to perpetuate income inequality and povertyby preventing the poor from taking advantage of opportunities created by growth.7It is important to note that more than 60 percent of Brazil's poor live in the North-East

of the country. In Argentina poverty rates, as measured by the national poverty line, have grown

since 1995, after falling from 40 percent in 1990 to a low of 22 percent in 1994.Income distribution has also deteriorated, reflecting the fact that the gains ofeconomic growth have gone largely to the more skilled and educated in the laborforce, and not to the poor. In addition, unemployment has risen, and unemployment


14/62


people living below the poverty line increased by about 200,000 because ofpopulation growth.

At a regional level, income inequality increased between 1986 and 1989, butstabilized thereafter, at least until 1996. Mexico and Brazil followed this trend, whileChile and Paraguay faced increasing inequality throughout the 1990s. In countrieslike Colombia, Ecuador, Uruguay and Venezuela, inequality did not change a greatdeal, and in others (Bolivia, Honduras and the Dominican Republic) inequalityactually decreased.8

Even though income poverty has not decreased, social indicators have improved;adult literacy, life expectancy, access to safe water, infant mortality are at levels

consistent with what would be expected given the regions level of economicdevelopment, but secondary school enrollment is below such levels, in part becauseof high levels of income inequality which do not enable the poor to continue beyondprimary school. Worryingly, in Argentina enrollment rates at the secondary andtertiary levels have decreasedbetween 1992 and 1997 for the poorest 20 percent ofthe population.

The macroeconomic shocks that hit many Latin American countries have disastrousconsequences for poverty. The 1995 Tequila Crisis in Mexico, for example, resulted

in a 7 percent increase in poverty.9

Eastern Europe and Centr al Asia

Poverty rose markedly in thetransition economiesduring the 1990s.

In Russia, the breakup of the central planning system was accompanied by a steepfall in output and a sharp increase in inflation. Poverty as measured by the national

definition had jumped from an estimated 11 percent during the Soviet period to 43 percent by 1996, and probably increased further with the 1998 crisis. Inequality wideneddramatically during the transition, with the Gini coefficient of consumptionexpenditure rising from an estimated 0.24 in 1988 to about 0.49 in 1998. Increasingdisparities in poverty across regions have also surfaced, exacerbated by a inefficientsystem of fiscal decentralization which left the more backward regions short ofresources to assist the poor.

Moldova, one of the countries hardest-hit by the 1998 crisis and today one of thepoorest countries in Europe, experienced a dramatic worsening of poverty: thepercentage of people living below the national poverty line increased from 35 percentin May 1997 to 46 percent in the fourth quarter of 1998. Inequality also increasedsharply in the last decade: the Gini coefficient jumped from 0.24 in 1987/98 to about0.40 in 1997.


15/62


reflecting problems in the pension system), while about 35 percent of householdswith a head under age 30 live below the poverty line.

In Turkey, the number of poor people decreased between 1987 and 1994, and incomedistribution remained broadly unchanged.

Chronic poverty is emerging as a increasing concern in the region, as evidencesuggests that even in countries with a robust growth record there is a growing groupof the chronically poor.

Recent poverty assessmentsby the World Bank highlight striking levels of povertyamong the Roma population10. In Bulgaria, in 1997, over 84 percent of the Romalived below the poverty line (compared to a national poverty rate of 36 percent); in

Hungary, one-third of the long-term poor were Roma, although they make up only 5percent of the population.

M iddle East and North Af ri ca

In the Middle East and North Africa the percentage of people living below $1 per daydeclined slightly, but the percentage living below $2 per day increased, from 25 to 30

percent of the population, due to increases in Egypt, Morocco and Yemen. Poverty reduction in the region is strongly linked with economic growth: in the past,

high growth has been accompanied by significant poverty reductionand sharpdownturns in GDP have been accompanied by sharp increases in poverty.

Recent data from Tunisia, however, suggests the elasticity of poverty reduction togrowth may be declining, meaning that faster growth will be needed to achievesimilar reductions in poverty as in the past.

Prospects for poverty reduction

As noted above, progress in reducing extreme poverty during the 1990s was constrainedby increasing inequality in a few countries that accounted for a large share of the worldspoor. The poverty scenarios developed forGlobal Economic Prospects 2001 (GEP 2001)show that continued increases in inequality coupled with less than robust growth wouldimply failure to reach the poverty target for developing countries as a group, and in

particular substantial increases in the number of poor in Sub-Saharan Africa. Given theuncertainty surrounding the historical estimates for poverty and the risks associated withlong-term growth projections, these scenarios should not be viewed as presenting the fullrange of poverty rates that are likely to occur.

The three poverty scenarios outlined below require a projection of growth of theh l ( d f l ti th) j ti f th th t


16/62


in per capita consumption for the household sector (measured by household surveys)11;and a projection of changes in the distribution of per capita consumption.

I ncome growth

The three scenarios differ only in terms of the assumed growth rate for the economy as awhole. Scenario A reflects the base case growth rates, and scenario B reflects the lowcase growth rates presented in GEP 2001. A third scenario assumes that the growth rateof each developing country region is reduced proportionately from the low case forecast,so that the average growth for developing countries as a group is equal to that

experienced in the 1990s (1.7 percent in per capita terms).

Consumption trends

In previous poverty forecasts, the projected growth rate of per capita consumption forhouseholds was taken from forecasts of private consumption from the national incomeaccounts. By contrast, the scenarios outlined below take account of recent research thatshows that the growth in household consumption from survey data has been lower on

average than private consumption growth as measured by the national income accounts.Data for 142 time periods (during the 1980s and 1990s) for 60 countries suggest that thegrowth of per capita consumption from household surveys was an estimated 87 percent ofthe growth rate in private consumption from the national accounts.12 The most likelyexplanation for this discrepancy is that the surveys do not pick up fully the growth inliving standards of the rich.13 As the poverty estimates are based on consumption fromhousehold surveys, for the poverty forecasts for most developing countries we assumethat the growth rate of this variable will equal 87 percent of the growth rate of private

consumption from the national income accounts. The failure to adjust the forecast ofhousehold consumption growth to reflect the historical divergence from the nationalincome accounts has resulted in substantial overestimation of the rate of povertyreduction in past forecasting exercises.

The discrepancy between consumption growth from the household surveys and thenational accounts is larger in China and India (that together account for more than half ofthe worlds poor) and in the Europe and Central Asia region. For China, the time series

11 This excludes consumption by other private entities such as nonprofit organizations, political parties,unincorporated enterprises and so forth that are often included in the national accounts estimate ofprivate consumption.

12 M. Ravallion (2000), "A Note on Forecasting Poverty Using National Accounts Growth Rates,"background paper for GEP 2000 report India China and Europe and Central Asia are excluded from


17/62


evidence indicates that 72 percent of a gain in private consumption is reflected inhousehold consumption, and this adjustment is used in the projections. For India, only 28

percent of an increase in private consumption is reflected in the household consumption,and in Europe and Central Asia the time series evidence for the 1990s suggests virtuallyno correlation between the two consumption aggregates. It is difficult to understandthese unusually large discrepancies, which probably reflect serious data problems, as wellas the failure to capture the consumption levels of the rich. Thus, the projections for Indiaand the ECA region assume that the share of national accounts growth reflected in thesurvey mean will equal 51 percent over the forecast period, the lower bound of the 95percent confidence interval for the estimate for the developing world as a whole

(excluding China, India, and Europe and Central Asia).14

Distribution

The other determinant of the incidence of poverty is in the distribution of householdconsumption. Long-term cross-country evidence suggests that most countries have notexperienced a systematic trend in household consumption inequality as measured usinghousehold survey data. Thus, the assumption for the bulk of the developing countries isthat inequality will not change over the forecast period.

However, there are exceptions. The 1990s did witness a dramatic rise in inequality in theEurope and Central Asia region. We assume that this was a transitional phenomenon andwill not continue. Further, the available data do indicate a rise in inequality in China andIndia over the past decade, 15 in part due to slower growth in rural areas, where themajority of the poor live, than in urban areas. We assume that inequality will continue torise in both countries over the forecast period. In China, the liberalization of trade in

agricultural commodities and land markets is likely to allow a shift to more remunerativecrops and larger land holdings. Since good quality land is scarce, the consolidation ofland holdings and higher returns to good quality land are likely to lead to higher levels ofinequality in rural areas. Moreover, continued integration with the world economy willincrease the demand for skilled labor. Inequality within urban areas may rise, as wagesincrease rapidly for skilled workers in manufacturing and some services while low-skillservice workers experience lagging wages under the twin pressures of migrant laborersand laid-off workers from the state enterprises. Rising demand for skilled labor may also

increase inequality between urban and rural areas, as the gap in educational attainmentbetween the two is high. Thus, both scenarios assume that urban incomes will increasemore rapidly than rural incomes, and that inequality within both the rural and urbansectors will increase slightly, in the form of a 10 percent higher Gini index in each sectorby 2015.


18/62


In India, rising inequality during the 1990s appears to have slowed the rate of poverty

reduction relative to the previous decade. So far reforms have largely bypassed the ruraleconomy where the majority of the poor live, leading to a wide divergence of growthbetween urban and rural areas. Weak infrastructure services, limited education andinadequate health care have made it difficult for the poor to share equally in the countrysrapid growth. For example, the liberalization process is increasing returns to education,while education is inequitably distributed (one third of men, and 60 percent of women,over the age of 15 are illiterate). The forecasts assume that the divergence in consumptiongrowth between rural and urban areas continues along past trends.

Table 3. Population estimates and projections, 1998-2015 (mi l li ons of people)

Region 1998 2015

East Asia and the Pacific 1,817 2,099Excluding China 569 708

Eastern Europe and Central Asia 475 483Latin America and the Caribbean 502 623Middle East and North Africa 286 390South Asia 1,305 1,676Sub-Saharan Africa 627 914

Total 5,011 6,185Excluding China 3,763 4,794

Source: Global Economic Prospects and the Developing Countries 2001.

Scenarios

In scenario A, with base case growth (adjusted for historical differences betweenhousehold survey and national income accounts consumption) and rising householdconsumption inequality in China and India, the world as a whole would be on track toreaching the International Development Goal of reducing the share of people livingbelow $1 per day by 2015 to half of what it was in 1990. The total number of poorpeople would decline to about 800 million people (see table 3 for the forecasts of totalpopulation in developing countries). But not all regions would be on track: Africa wouldbe far from reaching the goal even under this favorable growth scenario. With low-casegrowth rates (scenario B) , the world as a whole would not reach the target. Only thecountries of East Asia would be able to reduce poverty beyond the target of half the 1990incidence. The total number of poor people in the world excluding China would remain

16


19/62


developing countries over the next 15 years were to equal the average of the 1990s, thenprogress in poverty reduction would be even slower than in scenario B, and the number

of people living on less than $1 a day at the end of the forecast period would be onlymarginally lower than in 1998. The number of poor based on the $2 per day level wouldactually increase.

Table 4 provides a summary of the poverty forecasts, and tables 5 and 6 give regionaldetails for the two scenarios which use the base case and low case growth rates.


20/62


Table 4. Poverty in developing countr ies under scenar ios of base case growth (scenario

A), low case growth (scenar io B) and 1990s average growth , 1990, 1998, 2015

Year $1/day $2/day

Headcount ratio

(%)

Number of poor

(million)

Headcount ratio

(%)

Number of poor

(millions)

1990 29.0 1,276 61.7 2,7181998 23.4 1,175 56.1 2,812

2015 Scenario A(base case growth)

12.6 777 36.7 2,272

2015 Scenario B

(low case growth)

16.4 1,011 43.2 2,672

2015 Growth as in1990s

18.7 1,157 47.5 2,938


Table 5. Regional breakdown of number of people l iving on less than $1 per day and

headcount index in developing countr ies, under scenar ios of base-case growth (scenar io A)

and low-case growth (scenar io B), 1990, 1998, and 2015

Region Number of people living

below $1 per day1990 1998 2015

low case2015

base case


Europe and Central Asia 7.1 17.6 9.0 6.3Latin America and the Caribbean 73.8 60.7 58.3 42.8

Middle East and North Africa 5.7 6.0 6.2 5.1South Asia 495.1 521.8 410.7 296.7Sub-Saharan Africa 242.3 301.6 426.2 360.6

Total 1,276.4 1174.9 1011.2 776.5(excluding China) 915.9 961.4 930.6 720.9

Region Headcount index(percent)

1990 1998 2015

low case

2015

base caseEast Asia and the Pacific 27.6 14.7 4.8 3.1

(excluding China) 18.5 9.4 2.8 1.3Europe and Central Asia 1.6 3.7 1.9 1.3Latin America and the Caribbean 16.8 12.1 9.4 6.9Middle East and North Africa 2.4 2.1 1.6 1.3South Asia 44.0 40.0 24.5 17.7Sub Saharan Africa 47 7 48 1 46 7 39 5


21/62


Table 6. Regional breakdown of number of people l iving on less than $2 per day and

headcount index in developing countr ies, under scenar ios of base-case growth (scenar io A)

and low-case growth (scenar io B), 1990, 1998, and 2015

Region Number of people livingbelow $2 per day

1990 1998 2015low case

2015base case

East Asia and the Pacific 1,084.4 884.9 472.2 323.2(excluding China) 284.9 252.1 187.2 114.6

Europe and Central Asia 43.8 98.2 57.6 46.9Latin America and the Caribbean 167.2 159.0 161.6 132.9Middle East and North Africa 58.7 85.4 79.7 57.5

South Asia 976.0 1,094.6 1213.6 1077.8Sub-Saharan Africa 388.2 489.3 690.3 636.7

Total 2,718.4 2,811.5 2,675.0 2,275.1(excluding China) 1,918.8 2,178.7 2,390.0 2,066.5

Region Headcount index(percent)

1990 1998 2015low case

2015base case


Europe and Central Asia 9.6 20.7 11.9 9.7Latin America and the Caribbean 38.1 31.7 25.9 21.3Middle East and North Africa 24.8 29.9 20.4 14.7South Asia 86.8 83.9 72.4 64.3Sub-Saharan Africa 76.4 78.0 75.6 69.7



The preceding scenarios highlight the importance of achieving fast growth, as well asdistributing the benefits of growth equitably. Without macroeconomic stability, sustainedstructural reforms, prudent and transparent use of public resources, improvements in theprovision of public services and infrastructure to the poor, actions to reduce vulnerabilityand give the poor more voice over development choices, the pattern of inclusive andsustained growth that underlies the best scenario will not be realized and millions more

people will remain enslaved in poverty. Achieving the poverty reduction targets also willrequire an increase in aid flows to the poorest countries. With slow growth and increasesin inequality progress would be much slower everywhere, the target would be out ofreach for all regions apart from East Asia, and more than 200 million more peopleworldwide would remain mired in poverty. If policies are inadequate to achieve morethan the slow growth of the 1990s then the number of people living in extreme poverty


22/62


Africa but for the whole world, and efforts are needed in the region and elsewhere tobreak with the recent pattern of conflict and crisis, and to deal with the AIDS epidemic.

Even if the most optimistic scenario is achieved, 2.3 billion people would still be livingunder $2 per day in 2015. Thus, the global war on poverty is likely to be with us wellinto the 21st century.

In closing, it is important to note that these projections have some serious limitations.First, despite enormous progress in measuring poverty over the past 10 years, the database has significant weaknesses: recent data are missing for a number of countries,

especially in Africa, where renewed efforts are needed to institutionalize survey workthat began in the 1990s. Major questions remain as to the trends for India. Second, ourunderstanding of trends in inequality and the divergence between national accounts andhousehold-based measures of private consumption is limited. Research is underway toaddress some of these limitations, including further analysis of the data for India.


23/62


22

F igure 3. Share of the Populati on L iving on Less than $1 per day, 1990, 1998, 2015 (projections), 2015 (I DG target)

Developing Countries East Asia and the Pacific

East Asia and the Pacific excluding China Eastern Europe and Central Asia

0

10

20

30

40

50

60

1990 1998 2015

Scenario B (low case growth)

Scenario A (base case growth) IDG target

0

10

20

30

40

50

60

1990 1998 2015


Scenario A (base case growth)

IDG target

Percentagebelow$

1.

08/day

Percentagebelow$

1.

08/day

0

10

20

30

40

50

60

1990 1998 2015



IDG target

0

10

20

30

40

50

60

1990 1998 2015


Scenario A (base case growth)IDG

target

Percentagebelow$

1.08

/day

Percentagebelow$

1.08

/day


24/62


23

F igure3 (continued). Share of the Population Living on Less than $1 per day, 1990, 1998, 2015 (projections), 2015 (target)

Latin America and the Caribbean Middle East and North Africa

South Asia Sub-Saharan Africa

0

10

20

30

40

50

60

1990 1998 2015



IDG target

0

10

20

30

40

50

60

1990 1998 2015



IDG target

0

10

20

30

40

50

60

1990 1998 2015



IDG target

0

10

20

30

40

50

60

1990 1998 2015



IDG target

Percentagebelow

$1.0

8/day

Percentagebelow

$1.0

8/day

Percentagebelow$

1.0

8/day

Percentagebelow$

1.0

8/day


25/62


Trends in inequality

Countries with high levels of initial inequality (see Table 7 for examples of highinequality countries) have reduced poverty less for given rates of growth than countrieswith low initial inequality (World Bank 2000e), and if growth is accompanied byincreasing inequality, its impact on poverty will be reduced. However, our understandingof long-term trends in inequality is limited, partly because of weaknesses in the data.17Trends in inequality have been extremely diverse. For example, Malaysia saw declines ininequality (as measured by the Gini coefficient) during the 1980s, but this trend wasreversed in the 1990s. Korea and Indonesia experienced rapid growth during the 1980s

with little change in inequality, while China and Russia experienced large increases ininequality over the same period.

The available data show no stable relationship between growth and inequality.18 Onaverage, income inequality within countries has neither decreased not increased over thelast 30 years. However, since within-country inequality has increased in some populouscountries, overall more people have been affected by increases in inequality than bydecreases.

What drives inequality? Here, too, our knowledge is limited. Nevertheless, both cross-country analyses and case studies have generated insights into the link between inequalityand several policy and institutional factors.

Policies fostering stable macroeconomic conditions, openness to trade, andmoderate size of government tend to stimulate growth but have been found in onestudy not to systematically affect the distribution of income (Dollar and Kraay2000). However, policies that reduce inflation from very high levels appear tobenefit the poor more than the average.

If growth is strong in areas where the poor live and sectors where they areemployed (for example, smallholder agriculture), they benefit more; if growthtakes place in areas or sectors that are not accessible to the poor, inequality canincrease. Domestic policy distortions that hinder agriculture (along withinternational trade barriers) have restrained growth in rural incomes in many

countries. This has also been reflected in rising regional inequality, as in poorregions farming is often the dominant sector of activity.19

Changes in income inequality reflect changes in the distribution of assets (forexample, education) and in the return to these assets. In some countries, such as


26/62


Mexico, more educated workers saw larger increases in earnings than did othersworkers, and these gains contributed to increasing income inequality.

Gender bias and other forms of discrimination have led to increasing inequalitywhere the groups that are discriminated against are poorer than others to startwith. For example, discrimination led to lower returns to education and loweroverall incomes for ethnic minorities in Vietnam and indigenous groups in LatinAmerica.

The impact of liberalization programs on inequality has differed among countries.If pre-reform controls benefit higher-income groups disproportionately, reformscan narrow inequality. If, on the other hand, pre-reform controls favor the poor,

liberalization can have the opposite effect. For example, in the transition to anopen trade regime, the poor may suffer if sectors where they have a stake aresubjected to competition. This may happen especially in middle-incomedeveloping economies with intermediate skill endowments. These economies mayhave a comparative advantage regarding goods that require medium-intensityskills. These countries are likely to protect sectors intensive in unskilled laborwhere low-paid workers can be found. 20

Table 7. Percentage share of income (poorest and r ichest 20 percent of the populati on)a

High InequalityCountries

Lowest20%

Highest20%

Low InequalityCountries

Lowest20%

Highest20%

Honduras 1.6 61.8 Slovak Republic 11.9 31.4Bolivia 1.9 61.8 Japan 10.6 35.7Paraguay 1.9 60.7 Austria 10.4 33.3Brazil 2.6 63.0 Czech Republic 10.3 35.9Swaziland 2.7 64.4 Bulgaria 10.1 36.8

Note: a Latest available survey year. Source: World Bank, World Development Indicators 2001.

P t R d ti d E i M t/ H D l t/ D l t E i Th W ld B k G


27/62


Social Indicators

Social indicators have generally been improving over the last three decades, and improveas incomes increase data on infant mortality and on access to improved water sourcesand sanitation facilities in the developing world, for example, indicate continued progressin all regions in the 1990s. 21 Nevertheless, more than 100 million school-age childrenremain out of school today, and in twenty developing countries, still more than 1,000women die for each 100,000 live births.

Furthermore, living conditions have deteriorated substantially over the last decade for

many Africans. AIDS is causing declines in life expectancy and increases in infant andchild mortality rates in the countries hardest hit by the epidemic (such as Botswana,Zimbabwe , South Africa, and Lesotho). Sub-Saharan Africa also experienced declinesin enrollment rates between 1980 and 1994.

On current trends, none of the International Development Goals on health and educationare likely to be achieved: a two-thirds decline in infant and child mortality rate, a three-fourths decline in maternal mortality rates, universal primary education (all by 2015), and

gender equality in education (by 2005).22

It is important to note that, while these social development goals refer to country-wideaverages, health and educational outcomes vary considerably by economic status. Themortality rates of the poor are systematically higher than the average and enrollment ratessystematically lower. So efforts to improve literacy or reduce mortality may have toconcentrate where they are most needed, namely among the poor.

Population

The links between population growth and poverty are complex: evidence suggests thathigh fertility is as much a symptom of poverty as a cause.

In 1999, the world's population reached 6 billion. According to recent projections, itwill reach 7 billion in 2014 - but adding the next billion people is expected to takelonger than for the previous billion.

More than half of the next billion will come from South Asia (310 million) and Sub-Saharan Africa (240 million); East Asia and the Pacific will add about 220 million.

More than half the world's population (2.7 billion) live in urban areas, a numberprojected to reach 5.1 billion by 2030; about 98 percent of the increase will occur indeveloping countries.! Intra-urban differences in living standards and welfare are often quite dramatic: in



28/62


Health

L if e expectancy

On average, the life expectancy of people living in developing countries rose from 55years in 1970 to 64 years in 1999, but it still lagged far behind that of OECD countries,which was 78 years in 1999 (table 8).

Thirty-eight countries have seen life expectancy decline since 1990. Most arecountries hit by the AIDS epidemics. 12 countries lost more than five years (table 9).

Table 8. Trends in li fe expectancy, selected years, 1970-1999 (years of l if e)

Region 1970 1982 1992 1997 1999

East Asia and Pacific 59 66 68 69 69

Eastern Europe and Central Asia n.a. 68 69 69 69

Latin America and Caribbean 61 65 68 70 70

Middle East and North Africa 53 60 65 67 68

South Asia 49 55 60 62 63Sub-Saharan Africa 44 48 50 49 47

Developing Countries 55 61 64 65 64

OECD 71 75 77 78 78Source: World Bank, World Development Indicators 2001.Note: n.a. Not Available

Table 9. Declines in li fe expectancy between 1990 and 1999 (years of li fe)

Botswana -17.4 Kenya -9.4Zimbabwe -15.7 Namibia -7.5

South Africa -13.5 Congo, Dem. Rep. -5.8

Lesotho -13.0 Korea, Dem. Rep. -5.3

Zambia -10.7 Malawi -5.2

Swaziland -10.4 Tanzania -5.1Source: World Bank, World Development Indicators 2001.

I nfant, child, and maternal mortality

Actual or projected data on infant mortality indicate progress between 1990 and 1999 inall regions. But the 11 percent reduction in infant mortality in the developing world overthe last nine years appears too slow to meet the target set in the International



29/62


relative terms: while infant mortality in 1970 was around 5 times as high indeveloping as in OECD countries, it is now about ten times as high (table 10).

Table 10. Trends in infant mortali ty, selected years, 1970-1999 (per 1,000 live bir ths)

Region 1970 1990 1992 1997 1999Reduction1990-1999

East Asia & Pacific 78 40 42 37 35 13%

E. Europe & Central Asia 41a 28 28 23 21 25%

Latin America & Caribbean 84 41 38 32 30 27%

Middle East & North Africa 134 60 59 47 44 26%

South Asia 139 87 85 76 74 14%Sub-Saharan Africa 137 101 100 94 92 9%

Developing countries 107 66 66 60 59 11%

OECD 20 8 7 6 6 29%

(Diff. Developing countries-OECD) 86 58 58 54 53

(Developing countries/ OECD) 5 8 9 10 10

Source: World Bank, World Development Indicators 2001. Note:a

1980.

Child mortality rates in the developing world are also declining too slowly to attain thetarget of a two-thirds reduction by 2015: rates should have come down roughly by 30percent in the 1990s, but they declined by only 6 percent (table 11).

Between 1990 and 1999, child mortality increased in Sub-Saharan Africa from 155per 1,000 to 161 per 1,000.

In the same period, 11 countries experienced worsening rates; among them NorthKorea, where the child mortality rate increased from 35 to 93, and Namibia, wherethe mortality rate went from 84 to 108.

Table 11. Trends in under-5 mortali ty, selected years, 1970-1999 (per 1,000)

Region 1970 1980 1990 1997 1999

% Change

1990-1999

East Asia & Pacific 126 82 55 47 44 -19%

E. Europe & Central Asia n.a. n.a. 34 29 26 -22%

Latin America & Caribbean 123 80 49 41 38 -23%

Middle East & North Africa 200 136 71 58 56 -21%

South Asia 209 180 121 104 99 -18%Sub-Saharan Africa 222 189 155 159 161 4%

Developing countries 167 135 91 87 85 -6%

OECD 26 14 9 6 6 -26%Source: World Bank, World Development Indicators 2001. Note: n.a. Not Available.



30/62

y g p p p

Maternal mortality rates also show mixed results. The international goals call forreducing maternal mortality by three-quarters by 2015, but significant improvementshave not been seen. In twenty developing countries, still more than 1,000 women die foreach 100,000 live births (table 12).

Table 12. Countr ies with the highest maternal mortal i ty rates, 1995 (adjusted rates per

100,000 live bir ths)

Country Maternal MortalityRate

Country Maternal MortalityRate

Rwanda 2,300 Guinea 1,200Sierra Leone 2,100 Cte dIvoire 1,200Burundi 1,900 Senegal 1,200Ethiopia 1,800 Congo, Rep. 1,100Chad 1,500 Gambia, The 1,100Sudan 1,500 Haiti 1,100Burkina Faso 1,400 Eritrea 1,100Angola 1,300 Nigeria 1,100Kenya 1,300 Tanzania 1,100Central African R. 1,200 Uganda 1,100Source: World Bank, World Development Indicators 2001.

Malnutrition

A recent study using data from nationally representative surveys for 19 countries looks athow three indicators of malnutrition (wastinglow weight for height; stuntinglowheight for age; underweight low weight for age) vary by income level 24 The study

Goal: Reduce Infant Mortality Rates by

Two-Thirds

(Source: "A Better World for All")

0

10

20

30

40

50

60

70

1990 1995 2000 2005 2010 2015Deathsper1,0

00livebirths

Pro gress 199 0 - 19 98 A verag e pat h t o g oal

Goal: Reduce Under-5 Mortality Rates

by Two-Thirds

(Source: "A Better World for All")

0

10

20

30

40

50

60

70

80

90

100

1990 1995 2000 2005 2010 2015D

eathsper1,0

00livebirths

Pro gress 19 90 - 19 98 A verag e p at h t o g oal



31/62

Differences between poor and non-poor vary across countries: in Peru, the rates ofunderweight and stunting amongst the poorest 20 percent are about five times thoseamongst the richest 20 percent; in Egypt the gaps are far smaller.

Interestingly, poor-non-poor differences tend to be smaller in countries where averagerates are relatively high (e.g. Bangladesh), and larger in countries where average ratesare relatively low (e.g. Peru).

Table 13. Rates of under-5 stunting, underweight and wasting, by quinti le of equivalent

consumption (percent)

Stunting Underweight Wasting

Country AverageRate Poorest20% Richest20% Poor/Rich AverageRate Poorest20% Richest20% Poor/Rich AverageRate Poorest20% Richest20% Poor/Rich

Bangladesh 51 56 43 1.3 54 59 44 1.3 22 28 21 1.3

Brazil 15 23 9 2.6 6 9 3 3.0 6 9 6 1.5

China 28 38 14 2.7 13 21 6 3.5 4 6 2 3.0

Cte dIv. 20 26 18 1.4 17 21 15 1.4 10 10 11 0.9

Egypt 17 20 16 1.3 11 10 10 1.0 5 4 6 0.7

Ghana 31 38 25 1.5 26 32 19 1.7 5 6 3 2.0

Guatemala 62 70 47 1.5 33 41 25 1.6 1 1 1 1.0

Guyana 12 15 6 2.5 19 25 8 3.1 8 7 3 2.3

Indonesia 46 54 35 1.5 40 46 33 1.4 10 14 11 1.3

Morocco 28 39 15 2.6 15 23 6 3.8 8 12 5 2.4

Nepal 49 55 39 1.4 47 60 27 2.2 13 16 8 2.0

Nicaragua 15 24 9 2.7 8 15 4 3.8 3 7 0 -

Pakistan 42 46 31 1.5 43 48 35 1.4 25 28 22 1.3

Peru 31 51 10 5.1 12 22 5 4.4 2 4 2 2.0

Philippines 14 21 8 2.6 21 26 13 2.0 22 29 16 1.8

Romania 24 25 20 1.3 7 9 6 1.5 5 6 4 1.5

Russia 17 22 6 3.7 6 7 5 1.4 6 7 4 1.8

S. Africa 26 39 12 3.3 18 24 11 2.2 10 10 8 1.3

Vietnam 53 60 38 1.6 41 48 29 1.7 6 4 7 0.6

Zambia 37 60 37 1.6 22 29 14 2.1 6 6 6 1.0Source: Wagstaff and Watanabe (2000), Socioeconomic Inequalities in Child Malnutrition in the Developing World.

Health status and health care services for the poor

Children born into poor families have a higher chance of dying before their 1st and 5thbirthday than children born into better-off familiesbut the differences varies greatlyacross countries:

in Ghana and Pakistan, the infant mortality rate for the poorest 20 percent of childrenis almost equal to the rate for the richest 20 percent. In the Philippines, South Africaand Nepal, it is twice as high;

in NE and SE Brazil the under-5 mortality rate for the poorest 20 percent of childrenis over 6 times that of the richest 20 percent of children;

li i b d il' hild f h



32/62

Table 14. I nfant and under-5 mortali ty rate inequaliti es (per 1,000)

Infant Mortality Under-5 Mortality

Country Averagerate

Poorest20%

Richest20%

Poor/Rich

Averagerate

Poorest20%

Richest20%

Poor/Rich

Brazil (NE & SE) 43.2 72.7 15.3 4.8 63.5 113.3 18.7 6.1

Cte d'Ivoire 68.4 106.7 66.6 1.6 116.7 163.1 99.7 1.6

Ghana 82.1 85.1 84.0 1.0 142.5 155.5 129.7 1.2

Nepal 61.9 80.1 40.6 2.0 91.0 126.8 64.6 2.0

Nicaragua 71.9 98.7 40.7 2.4 99.8 141.7 51.3 2.8

Pakistan 124.4 130.4 127.3 1.0 147.2 160.1 145.2 1.1

Philippines (Cebu) 38.8 47.8 25.9 1.8 78.5 109.0 44.0 2.5South Africa 74.1 97.3 51.0 1.9 112.7 159.7 76.7 2.1

Vietnam 33.9 40.2 31.9 1.3 50.7 53.5 47.4 1.1

Source: Wagstaff (2000) Socioeconomic Inequalities in Child Mortality: Comparisons Across Nine Developing

Countries.

The poor are less likely to obtain health care than are the rich:

Between 1990 and 1998, in forty developing countries, only 29 percent of births

among the bottom twenty percent of the population were attended by medicallytrained health staff, compared with 84 percent for those in the top twenty percent.

In the same period, only 34 percent of the poor suffering from acute respiratoryinfections were treated in a health facility, compared to 57 percent of the non-poor(see Annex I).25

In Indonesia in 1997 only 21 percent of births of the rural poor and 49 percent ofbirths of the urban poor were attended by a medically trained person, compared with78 percent and 93 percent of the rural and urban rich (see table 15).

Table 15. Percentage of rural and urban bir ths attended by a medical ly trained person

Income GroupCountry Poorest 20% Richest 20% Rich/ Poor

RuralIndia 1992/93 11.5 69.8 6.1Indonesia 1997 20.7 78.2 3.8Nicaragua 1997/98 30.4 80.2 2.6Nigeria 1990 11.3 74.3 6.6

UrbanIndia 1992/93 26.5 81.3 3.1I d i 1997 49 5 94 0 1 9



33/62

The poor are much more affected by communicable diseases than the rich:

In 1990, 59 percent of all deaths among the poorest 20 percent of the worldpopulation were caused by communicable diseases, against 8 percent for the rich.26

The problems of AIDS and malari a

UNAIDS has estimated that in 2000 there were 3 million deaths due to AIDS, the highestglobal total since the beginning of the epidemic, and 5.3 million newly infectedindividuals. In all, 36.1 million individuals are estimated to be living with HIV or AIDS.The vast majority of these are in Africa and South and South-East Asia: 70 percent of

people living with HIV or AIDS (25.3 million) and of new infections of HIV (3.8million) are in Sub-Saharan Africa; about 15 percent of people living with HIV or AIDS(5.8 million) and of new infections of HIV (780,000) are in South and South-East Asia(table 16).

In eight countries in Africa (including Botswana, South Africa and Zimbabwe), 15percent or more of adults live with HIV or AIDS.

The rapid rise in adult deaths is leaving an unprecedented number of orphans: 13.2million worldwide, 12.1 million of them in Sub-Saharan Africa alone. Today, in

some African countries, one in 10 children is an orphan. The trend in Eastern Europe and Central Asia is worrisome: a conservative estimate

puts the number of adults and children living with HIV or AIDS in 2000 at 700,000,compared with 420,000 a year before.

Table 16. The distri bution of H IV/AI DS around the world

Region Adults and children newly

infected with HIV, end of2000

Adults and children and

living with HIV/AIDS, endof 2000

Adult

HIV/AIDSPrevalence Rate,

end of 2000 aNumber Percent Number Percent Percent

Sub-Saharan Africa 3,800,000 71.4 25,300,000 70.1 8.8

South and South-East Asia 780,000 14.6 5,800,000 16.1 0.6

Latin America 150,000 2.8 1,400,000 3.9 0.5

East Asia and Pacific 130,000 2.4 640,000 1.8 0.1

East. Europe and Central Asia 250,000 4.7 700,000 1.9 0.4

Caribbean 60,000 1.1 390,000 1.1 2.3

North Africa and Middle East 80,000 1.5 400,000 1.1 0.2

North America 45,000 0.8 920,000 2.5 0.6

Western Europe 30,000 0.6 540,000 1.5 0.2

A li d l d 00 0 0 1 000 0 0 0 1



34/62

The Human Immunodeficiency Virus (HIV) has so far been unique among infectiousdiseases in that it strikes rich people in the same proportion, or larger proportions, than itstrikes poor people. Nevertheless, AIDS is a disease of poverty (see Confronting AIDS:

Public Priorities in a Global Epidemic):

AIDS is a disease of poverty in the sense that most people with HIV or AIDS arepoor. The disease struck very hard in poor countries: 96 percent of infected peopleare in the developing world, and 70 percent are in Sub-Saharan Africa alone.Moreover, although infection rates are declining in the developed world, they arestable or rising in most developing countries.

Recent studies in developed countries have shown AIDS incidence to be highest

among the very poor. At the moment, there are no data to assess the preciseproportions of poor and non-poor people who are infected in developing countries,but if trends for developed countries are replicated worldwide, the poor will be morelikely to become infected than the non-poor.

AIDS deepens and spreads poverty. Poor households are more adversely affected byan AIDS death of a prime-age adult than other households because they have fewerassets to draw on to cope with medical expenses and the loss of income and servicesthat a prime-age adult typically provides.

AIDS is also likely to increase poverty through the rise in the number of children wholose one or both parents. Evidence shows that orphans have significantly lowerenrollment rates and are more likely to be malnourished than non-orphans. Lack ofschooling and inadequate nutrition will make it more difficult for orphans to escapepoverty.

Malaria, a parasitic disease transmitted by anopheles mosquitoes, affects an estimated300 million people and kills at least one million people each year, three-quarters of them

children under five. Sub-Saharan Africa suffers the highest exposure rates (9 out of 10cases occur there), followed by parts of Asia and Latin America.

Malaria is not an unavoidable side effect of a tropical location: among the countriessharing a location close to the equator, a lower incidence of poverty is associated withlower levels of malaria morbidity.

It has been estimated that, on average, the reduction in GDP growth caused bymalaria exceeds 0.25 percent per year, and is about 0.55 percent in Sub-SaharanAfrica.



35/62

Education

Primary enrollments

Gross primary school enrollment data show an improvement over the last thirty years.Developing countries have made enormous progress in expanding access to schooling.However, regional trends diverged markedly, with Sub-Saharan Africa experiencing aslight decline in enrollment rates between the early 1980s and the mid-1990s.

Table 17. Trends in gross primary enrollment rates, selected years, 1970-1996

Region 1970 1980 1990 1993 1996

East Asia and Pacific 90 111 120 115 116

E. Europe & Central Asia n.a. 99 99 97 100b

Latin America and Caribbean 99a 105 105 109 113

Middle East and North Africa 70 87 97 97 95

South Asia 71 77 90 97 100

Sub-Saharan Africa 51 81 76 76 78b

Developing Countries 82 96 103 103 107OECD 100 102 103 103 104cNote: Declines in gross enrollment ratios that are over 100 do not necessarily mean a decrease in the proportion ofschool-age children going to school. They might reflect a reduction in the numbers of over-age children as a result ofimprovements in quality and increases in efficiency as fewer children start school late or repeat grades.n.a. Not available, a1975, b1994, c1995. Source: World Bank, World Development Indicators 2001.

Although between 1990 and 1997 net enrollment rates have improved in all regions(except in the Middle East and North Africa, see table 18), today 110 million primary-

school-age children in developing countries are not in school. Of these, 60 percent (66million) are girls.

In Sub-Saharan Africa nine countries reported net primary enrollment rates of lessthan 50 percent in the 1990s (table 19).

The International Development Goals call for universal primary enrollment by 2015: atthe present rate of progress this target is not likely to be achieved, and more than 100million school-age children will not be in school in 2015.27

In Sub-Saharan Africa the number of children out of school would actually increaseto 50.7 million in 2005 and to 54.6 million in 2015 on present trends.28



36/62

Table 18. Trends in net primary enrollment rates, selected years, 1980-1997

Region 1980 1990 1992 1996 1997

Increase

1990-1997East Asia & Pacific 86 97 97 99 99 2%

E. Europe & Central Asia 92 95 94 99 100 5%

Latin America & Caribbean 86 89 91 94 95 7%

Middle East & North Africa 74 87 87 87 87 0%

South Asia 64 74 76 77 77 4%

Sub-Saharan Africa 54a 56b n.a. n.a. n.a. n.a.

Developing countries 78 86 86 88 89 3%

OECD 97 100 100 100 100 0%Note: n.a. Not available. a1981; b1989. Source: World Bank, World Development Indicators 2000.

Table 19. Countr ies with Net Primary Enrol lment Rates of less than 50 percent in 1997

(percentage of relevant age group)

Country % Country %

Niger 25 Mozambique 40Eritrea 30 Guinea 42Burkina Faso 31 Chad 46Mali 31 Tanzania 48Ethiopia 32Source: World Bank, World Development Indicators 2001.

In 1998, 879 million adults in developing countries (one in four) were illiterate. Of these64 percent (559 million) were women.

In South Asia only 42 percent of women are literate compared to 66 percent of men.In Nepal and Afghanistan only about 20 percent of women are literate; in Pakistan 30percent.

The incidence of adult illiteracy in developing countries has fallen from 47 percent in1970 to 26 percent in 1998; however, because of population growth and the failure ofschool systems to prevent children from growing up illiterate, today there are 41 millionmore illiterate adults than in 1970.

Almost the entire decrease in illiteracy since 1990 has been achieved in East Asia,

while the number of illiterates increased by 21 million in South Asia, 3 million in theMiddle East and North Africa, and 2 million in Sub-Saharan Africa.

Education of gir ls

Th I i l D l G l ll f l ll f i l d b i



37/62

The extent of female disadvantage in education varies enormously across countries.Gender gaps in education are large in Western and Central Africa, North Africa andSouth Asia:

In India there is a 16.6 percentage point difference between the school enrollment of

girls and boys aged 6 to 14. In Benin, the enrollment rate of boys aged 6 to 14 ismore than 60 percent higher than the enrollment rate of girls (table 20).

Table 20. Percentage of 6-14 year-old gir ls in school

High FemaleDisadvantageCountries

SurveyYear

% 6-14Year-OldGirls inSchool

% 6-14Year-OldBoys inSchool

Male-FemaleGap

Low/ NoFemaleDisadvantageCountries

SurveyYear

% 6-14Year-OldGirls inSchool

% 6-14Year-OldBoys inSchool

Male-FemaleGap

Nepal 1996 55.5 76.1 20.6 Zimbabwe 1999 83.5 83.4 -0.1

Benin 1996 32.6 53.1 20.5 Zambia1996-

97 60.4 60.1 -0.3

Pakistan1990-

91 44.3 64.7 20.4 Brazil 1996 93.8 93.4 -0.4Morocco 1992 45.8 63.9 18.1 Kazakhstan 1999 85.3 84.9 -0.4Central Afr.Rep.

1994-95 48.9 65.9 17.0 Indonesia 1997 86.6 86.0 -0.6

India

1992-

93 59.1 75.7 16.6 Madagascar 1997 58.6 58.0 -0.6Chad 1998 24.9 40.4 15.5 Malawi 1996 89.7 88.9 -0.8

Cte dIvoire 1994 41.7 55.8 14.1 Bangladesh1996-

97 73.8 72.6 -1.2

Turkey 1998 63.4 76.9 13.5DominicanRepublic 1996 94.2 92.8 -1.4

Togo 1998 64.4 77.5 13.1 Colombia 1995 89.7 87.9 -1.8

Goal: Gender Equality in Primary

and Secondary Education(Source: "A Better World for All")

75

80

85

90

95

100

1990 1995 2000 2005

Progress 1990 - 1998 Average path to goal

Fe

maletomaleenrollments,

%



38/62

Education for the poor

In many countries, most children from the poorest households have no schooling. For example, in India and Pakistan, as well as in Benin and Mali (among other West

African countries), the median grade completed among 15 to 19 years olds from thebottom 40 percent of households is zero (Annex II).

There are often enormous gaps between the educational attainment of the rich and of thepoor within countries.

In India, for example, 15-19 year olds from the richest 20 percent of households havecompleted on average ten years of schooling. Children from the poorest 40 percentof households have on average no schooling (Annex II).

In some countries school drop-out rates are very high, especially among the poor.

In Brazil, for example, whereas almost all children (15-19 year olds) of the pooresthouseholds have attended some school, only about 15 percent have completedprimary school.

Wealth differences in school enrollment are large in almost all developing countries:

The rich-poor gap in Western and Central African countries ranges from 5 percentagepoints (Kenya) to 52 percentage points (Nigeria). Gaps are also wide in North Africa,as well as in South Asia (table 21).

Table 21. Percentage of poor 6-14 year olds in school

Country Year

Poor 6-14in School

(%)

Rich 6-14in School

(%)Rich-Poor

gap Country Year

Poor 6-14in School

(%)

Rich 6-14in School

(%)Rich-Poor

gap

Western Africa East Asia

Nigeria 1999 39.3 91.3 52.0 Philippines 1998 78.9 94.8 15.9

Namibia 1992 84.0 91.8 7.8 Indonesia 1997 80.5 95.0 14.5

Eastern Africa South America

Madagascar 1997 46.8 90.0 43.2 Colombia 1995 80.9 97.6 16.7Kenya 1998 86.9 92.1 5.2 Peru 1996 85.8 94.6 8.8

North Africa Central America and the CaribbeanMorocco

199226.7 89.5 62.8 Haiti 1994-

9555.2 89.7 34.5



39/62

The Environment

The links between environmental conditions and human welfare are strong and complex.

For many people environmental resources provide their basic sustenance. Wisesustainable use of these resources can provide the basis for growth and poverty reduction.Millions more, who do not depend directly on the environment for their livelihood, areaffected by environmental degradation. Diseases associated with environmental factorsare highly concentrated among the poor. And the poor are disproportionately vulnerableto natural disasters -- droughts, floods, storms, earthquakes, and forest fires.

Water and sani tation

Lack of clean water and sanitation is the main reason disease transmitted by feces are socommon in developing countries. Contaminated drinking water and an inadequate supplyof water cause diseases that account for 10 percent of the total burden of disease indeveloping countries.

Although access to improved water sources and sanitation facilities increased since 1990,

in 2000 about half of the population of the developing world still lacked adequatesanitation (see table 22).

Table 22. Trends in access to improved water sources and sani tation facil it ies, 1990-2000

(percent of population)

Access to improved water

sources

Access to improved

sanitation facilitiesRegion 1990 2000 1990 2000

East Asia and Pacific 70 75 38 48

E. Europe & Central Asia n.a 90 n.a n.a.

Latin America and Caribbean 81 85 72 78

Middle East and North Africa 85 89 78 83

South Asia 79 87 31 36

Sub-Saharan Africa 49 55 55 55

Developing Countries 73 79 44 52Note: n.a. Not available. Source: World Bank, World Development Indicators 2001.

Access to safe water:

In 2000, approximately 1.5 billion million people in low and middle-incomeeconomies lacked access to safe water supplies. And in Sub-Saharan Africa fewerthan half the population has access.



40/62

But too many countries still had very low rates of access to safe water in 2000:Ethiopia: 24%Chad: 27%

Sierra Leone: 28%Cambodia: 30%

The poor are less likely to have access to water than are the rich:! In Ecuador, 75 percent of households among the poorest fifth lack piped water,

compared with 12 percent among the richest fifth.29

In many cities in the developing world, inequalities in water consumption betweenpoor and rich zones are considerable, with those living in the richest areas consumingmuch more water than those in the poorest areas:! In So Paulo, Brazil, the 9 percent of people living in the riches areas consume

five times as much water per capita than the 41 percent living in the poorest areas.In Accra, Ghana, water consumption per capita is three times higher for the one-third ofpeople living in the richest areas compared to those living in the poorestareas.30

Access to sanitation:

In 1996, approximately 1.4 billion low-income and over 400 million middle-incomepeople lacked access to sanitary facilities.

At the present rate of progress, one-third of all low-income peopleover 900millionwill still lack adequate sanitation in the year 2015.

In many of the worlds cities, households lack sewerage connections: in one out offour major cities surveyed by UN Habitat, fewer than 10 percent of households hadconnections.



41/62

What the Poor Say

Poverty is pain; it feels like a disease. It attacks a person not only materially but alsomorally. It eats away ones dignity and drives one into total despair- a poor woman,Moldova.

The poor are the true poverty experts. The World Bank, in preparing its WorldDevelopment Report 2000/2001: Attacking Poverty , wanted to make sure the voices ofthe poor -- their experiences, priorities, and recommendations would be taken intoaccount. The result was Voices of the Poor, a series of studies trying to understand thevoices of approximately 60,000 poor men and women from over 60 countries around theworld. The voices are drawn from 81 participatory poverty studies. The field studiesused participatory and open-ended methods, and were carried out mainly by localresearch institutes and NGOs, under the supervision of the World Bank.31

The pattern of findings from across countries is similar and striking. Poor peopledescribe repeatedly and in distressing detail what has only been glimpsed before, the

psychological experience and impact of poverty. The trends are sobering. The largemajority of poor people included in Voices said they are worse off now, have fewereconomic opportunities, and live with greater insecurity than in the past. They spelled outdetailed reasons that varied by region. Poor peoples experiences with governmentinstitutions are largely negative, even when government programs were rated asimportant. Rudeness, corruption and poor quality services seemed to be the norm,whether in health care or in programs of social support. But the poor still greatly valuegovernment programs, and feel governments have important roles to play in their lives.

The presence of NGOs in the various countries is uneven, but where they are at worktheir contributions are generally appreciated. The poor find their own local networks andinstitutions to be the most dependable. Gender relations are in troubled transition, withviolence against women frequent.

The Good Life and the Bad Life

Being well means not to worry about your children, to know that they have settled

down; to have a house and livestock and not to wake up at night when the dog starts

barking; to know that you can sell your output; to sit and chat with friends andneighbors. A middle aged man in Bulgaria.

A better life for me is to be healthy, peaceful and to live in love without hunger. Love



42/62

Poor people were asked to share their ideas of good and bad experiences of life,wellbeing and illbeing. To be poor was to experience illbeing in many ways, and tosuffer multiple disadvantages that reinforce each other and interlock to trap them. Again

and again, the psychological dimensions of wellbeing and illbeing were of paramountimportance. Wellbeing was variously expressed as happiness, harmony, peace, freedomfrom anxiety, and peace of mind. In Russia, people said, Wellbeing is a life free fromdaily worries about lack of money; in Bangladesh, to have a life free from anxiety; inBrazil, quality of life is not having to go through so many rough spots and when thereis cohesion, no quarrels, no hard feelings, happiness, in peace with life. In Nigeria,wellbeing is found in those that have peace of mind, living peacefully; in Bolivia,quality of life is high when you have a family, to feel supported and understood. Youcan have money but without a family its w

Documents

Poverty Trends and Voices of the Poor-may2001