There have been write-ups in the media of the decline of extreme poverty due to a World Bank data release in the past few days. This is kind of a pretty big deal, and one of the reasons that books like Enlightenment Now are still worth writing: much of the American public is unaware of the “good news.”
But as made clear in the graphic in The Wall Street Journal, this is to a great extent a regional story. In particular, it is the story of the near eradication of extreme poverty among the ~20% of the world’s population that is Chinese.
As the chart makes visible, the “Third World” or the “Global South” or the “Developing World”, whatever you call it, is very economically diverse. Was very economically diverse. In 1990 most of the world’s extreme poor lived in East Asia. Overwhelmingly in China. Outside of Sub-Saharan Africa and South & East Asia extreme poverty, using this definition, was actually not that common. Latin America, the Middle East & North Africa, and the post-Soviet world suffered by comparison to North America and Western Europe.
People who traveled widely across the “Third World” knew this. In the 1980s and 1990s one of my uncles was an engineer, and later officer, for an Iranian oil tanker, and so traveled across the Middle East. He eventually wrote a peculiar book on poverty in Bangladesh after he retired, and in it he recounted how clear and distinct the differences in acute poverty were when he compared Iran with his homeland.
To give you a different general sense, I pulled the World Bank data and focused on a few large nations of diverse profiles. And, rather than looking at just the % below a very low poverty threshold ($1.90 per day), I increased the threshold ($5.50) and focused on the poverty gap. While the poverty headcount just tells you what % of the population falls below the threshold, the poverty gap is measuring the average distance below the threshold. In other words, it is measuring intensity of poverty.
What you can see above is that China went from having the highest poverty gap to the lowest in 25 years. But the story isn’t just about China. Fifteen years ago Vietnam had just as much extreme poverty as Bangladesh, but today it is in the same range as China. In the 1990s we talked a lot about the “Asian Miracle.” But that was minor leagues. The real miracle has occurred in the 21st century.
But it wasn’t really a miracle at all. Nations such as Vietnam and China (and earlier Japan and Korea) had relatively high literacy rates, and a tradition of meritocratic advancement, long before contact with European colonialism. Before Communism. With high native human capital resources to begin with, they were poised for lift-off before they ever made it down the runway.
My wife happens to know a Chinese man who is now a professor of science at an American Research I University. Because this is someone we know, aspects of his life history have slowly emerged. In short, he grew up in a very poor peasant household in rural China. And not one that had just recently fallen down the class ladder from what we can tell.
Today he is a professor doing rigorous science, who has achieved an upper middle class American lifestyle. My horizons may be narrow, but I have never met a South Asian in the United States who has come from an analogous background of such grinding deprivation. I know they exist. But in general South Asian peasants in deep deprivation, the children of landless laborers and the like, do not seem to have the opportunity or expectation that they could become researcher professors in the United States.
Finally, Communism. It is strange today, though perhaps not, that much of the younger populace of developed nations are beginning to look with eagerness toward some sort of inchoate socialism. And yet here you have more than a billion who sloughed off the dead hand of command socialism, and in the process eradicated extreme poverty.
I understand the qualms about Chinese authoritarianism. I’m well aware that some elements of China’s economic growth are unlikely to be sustainable. Perhaps there will be a correction. Almost certainly there has to be one. But we can’t forget what the very recent past was like. We shouldn’t shrug off the miracle of anti-poverty that has occurred in East Asia.
To Americans, and Mexicans as well, 1990 wasn’t a different land. But in the past generation nations like China and Vietnam have transformed themselves in ways that we can’t even imagine.
