What is happening with the world?

March 17, 2012

A few days ago, we received some fantastic news. It seems that the UN’s first Millennium Development Goal of cutting the 1990 extreme-poverty rate in half by 2015 has already been achieved. This means that the proportion of people living in extreme poverty (living on $1.25 or less a day) has been reduced from 43 % in 1990 (and 52 % in 1981) to a mere 22 %. And this is not all.

Between 1981 and 2008, the world population increased by 2 billion, but the number of poor was reduced by 650 million. For the first time ever, there has been a decline in the poverty rate and the number of people in extreme poverty in all six regions of the developing world.

However, we are not out of the woods yet. We will still have some 1 billion people living below $1.25 in 2015, but the trend is promising. Similarly, The Economist reports that internal migration within China from inland towards the coast has been slowing down. Over 90 % of people under 30 in rural areas are already working in jobs outside of agriculture.

An ever-growing part of the global population is escaping from poverty and climbing the economic ladder of prosperity. Naturally, the differences are still vast, but the gap is narrowing.

Let’s consider a few of the facts that Matt Ridley laid out in his recent book The Rational Optimist: How Prosperity Evolves. Actually, it’s rather hard not to be an optimist, considering these recent developments: we are getting richer and healthier, and living longer.

It’s easier to see this by putting things in perspective. Let’s use the year 1955 as a basis for comparison. In that year, the average Finn earned less than the average person living in Botswana today. Life expectancy has declined in only three countries in the 50 years since 1955: in Russia, Swaziland, and Zimbabwe. The infant survival rate has increased in every country in the world. In those 50 years, the real income per head has increased in all but six countries (Afghanistan, Haiti, Congo, Liberia, Sierra Leone and Somalia).

So this is not only a developed world phenomenon. Almost all people everywhere are improving their lives. Some are progressing a little bit slower than others, but they are improving nevertheless. At the same time, we are changing the definition of poverty. There will always be poverty in relative terms, unless everyone is coerced to become exactly equal on all terms. Absolute poverty is another matter, but let’s put things into perspective once again.

According to a recent Heritage study, the average European has less living space than a typical poor person in the US. Government survey data from 2005 reveals that the average American family household defined as “poor” lives in a house or an apartment with air conditioning, a cable or satellite TV, one or more cars (a third have two or more), two TV sets, a clothes washer and dryer, and if they have children, they play with an Xbox or PlayStation. It’s important to remember that the criteria for being poor were defined by the government itself.

It’s easy to see only the areas where we still need major improvements, but it’s just as easy to take a myopic view of the great developments and achievements of the past few decades, or even centuries. Who would still love to live in the “good old days” without the Internet, mobile phones, coffee makers, and all the other smaller or larger innovations that have enabled our current standard of living and that even poor households can afford – at least, in some parts of the world.

Sometimes the innovation and technology deployment cycles are so rapid that we are “reinventing” things in just a few decades. For example, a telephone booth is that wonderful invention that enables you to speak on your mobile phone privately in a public space. Or you can have your streamed audio playlist interrupted by sponsored messages for a free service (previously known as a radio programme).

The next time you hear someone telling you how bad a shape the world is in, maybe it’s worth pausing a moment and looking around. What are all the things we take for granted that did not exist 50 years ago?

The article was published in TAF blog and Tekniikka ja Talous.

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