User:RichardMallett/NewBottomBillion

The New Bottom Billion

In the past poverty has been viewed predominantly as a Low Income Country (LIC) issue. Yet nowadays such simplistic assumptions/classifications can be misleading, because a number of the large countries that have graduated into the Middle Income Country (MIC) category still have high numbers of poor people.

New research shows that:

1. There is a new ‘bottom billion’ living in the MICs: three-quarters of the world’s poor – or almost one billion poor people – now live in MICs. Indeed, about two-thirds of the world’s poor live in stable MICs. This isn’t just about India and China, as the percentage of global poverty accounted for by the MICs minus China and India has risen considerably from 7 per cent to 22 per cent since 1990. The findings are consistent across monetary, nutritional and multi-dimensional poverty measures.

2. The remaining 39 LICs account for just a quarter of the world’s poor, and fragile LICs account for just 12 per cent of the world’s poor.

3. Contrary to earlier estimates that a third of the poor live in fragile states, our estimate is about 23 per cent if one takes the broadest definition of FCAS (43 countries), and they are split fairly evenly between fragile LICs and fragile MICs.

4. Of course, there are caveats to the above on methodological grounds. Just four countries (India, Pakistan, Indonesia, Nigeria) account for much of the total number of poor that have ‘moved’ to MIC countries. More importantly, is the above an artefact of methodology in itself? How meaningful are country classifications?

5. The headlines do though raise questions not only about the definitions of country categories, but also about: the future of poverty reduction in heterogeneous contexts; the role of inequality and structural societal change; and aid and development policy. One read of the data is that poverty is increasingly turning from an international to a national distribution problem, and that governance and domestic taxation and redistribution policies become of more importance than Official Development Assistance (ODA).