from The Economist
POOR people—the destitute, disease ridden and malnourished “bottom billion”—live in poor countries. That has been the central operating assumption of the aid business for a decade.
The thesis was true in 1990: then, over 90% of the world’s poor lived in the world’s poorest places. But it looks out of date now. Andy Sumner of Britain’s Institute of Development Studies* reckons that almost three-quarters of the 1.3 billion-odd people existing below the $1.25 a day poverty line now live in middle-income countries. Only a quarter live in the poorest states (mostly in Africa).
This change reflects the success of developing countries in hauling themselves out of misery. In 1998 the World Bank classified 61 countries (out of 203) as low-income (meaning an annual income per head of less than $760, in money of that era). In 2009 the number had shrunk to 39 out of 220. India, Pakistan, Indonesia and Nigeria all moved to middle-income status during that time (China passed the threshold earlier). But even excluding China and India, the share of global poverty accounted for by other middle-income countries tripled between 1990 and 2008, to 22%. Other figures support Mr Sumner’s finding. Of the world’s undersized children (a good indicator of malnutrition), 70% live in middle-income countries.