A focus on China and India

With such large discrepancies between the two sets of poverty forecasts for China and India, it is worth examining in greater detail whether our numbers for these countries are realistic.

It will be difficult for some to believe that China has nearly succeeded in escaping poverty. After all, as recently as 1996 the country was home to the largest number of poor people in the world. Yet while the reduction in poverty we forecast for China is dramatic, it is no more so than the country’s recent meteoric growth performance or indeed its own past record in poverty reduction. Consider, for example, that in the three years between 2002 and 2005, China’s poverty rate fell by 12.5 percentage points, from 28.4 percent to 15.9 percent. In this light, the further decrease of 15.6 percentage points that we project between 2005 and 2015 does not seem so farfetched. In fact, the World Bank’s own East Asia and Pacific Department found that as of 2007 “extreme poverty, in the sense of not being able to meet the most elementary food and clothing needs, has almost been eliminated [in china].”15 On this basis it seems reasonable to believe that the country could effectively eliminate $1.25 a day poverty within the coming four years.