Newsmax: Global Poverty Cut in Half Over Two Decades The past 25 years have witnessed the greatest reduction in global poverty in the history of the world. That eye-opening statement from a Dartmouth College economist comes after the World Bank reported in October that the share of the worlds population living in extreme poverty — earning less than $1.25 a day — had fallen from 36 percent in 1990 to just 15 percent in 2011. To what should this be attributed? Lets be blunt: The credit goes to the spread of capitalism, said Douglas A. Irwin, a professor of economics and co-director of the Political Economy Project at Dartmouth. Over the past few decades, developing countries have embraced economic policy reforms that have cleared the way for private enterprise. Irwin noted that in 1978, China began allowing private farm plots, permitted private businesses, and ended a state monopoly on foreign trade. The result has been stunning economic growth and a big decline in poverty. According to the World Bank, 753 million people in China moved out of extreme poverty between 1981 and 2011. In East Asia as a whole, the extreme poverty rate plunged from 78 percent to 8 percent during that period. India in 1991 relaxed policies requiring government approval to start a business, expand an enterprise, or even buy foreign goods like computers. When the government stopped suffocating business, the Indian economy began to flourish, with higher wages and reduced poverty, Irwin wrote in an opinion piece for The Wall Street Journal. In South Asia as a whole, the share of the population living in extreme poverty dropped from 61 percent in 1981 to 25 percent in 2011. China and India account for more than 35 percent of the worlds population. But many other countries, from Colombia to Vietnam, have enacted reforms that have reduced poverty. In South Africa, the extreme poverty rate has fallen from 34 percent to 16.5 percent in just four years after the country reformed its fiscal policies in 2010 and 2011, according to the World Bank. The reduction in world poverty has attracted little attention because it runs against the narrative pushed by those hostile to capitalism, Irwin observed. The Michael Moores of the world portray capitalism as a degrading system in which the rich get richer and the poor get poorer. Yet thanks to growth in the developing world, worldwide income inequality — measured across countries and individual people — is falling, not rising.
Posted on: Mon, 10 Nov 2014 14:04:52 +0000
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