Due largely to strong growth in developing regions, global poverty rate has fallen sharply in the first four years of the 21st century, with challenges ahead before reaching the Millennium Development Goals (MDG), said the World Bank on Sunday.

The proportion of people living on less than 1 dollar a day fell to 18.4 percent in 2004, leaving an estimated 985 million people living in extreme poverty, according to new estimates published in the World Development Indicators 2007 by the World Bank.

By comparison, the total number of extreme poor was 1.25 billion in 1990. Two-dollar-a-day poverty rates are falling too, but an estimated 2.6 billion people, almost half the population of the developing world, were still living below that level in 2004.

"Developing countries have averaged a solid 3.9 percent annual growth in GDP per capita a year since 2000, which contributed to rapidly falling poverty rates in all developing regions over the past few years," said the report.

Another key reason dollar-a-day poverty fell by over 260 million between 1990 and 2004 was China's massive poverty reduction over that period. Indeed, East Asia's extreme poverty rate dropped to 9 percent in 2004.

In the rest of the developing world, good economic performance and a lower poverty incidence in most regions have offset a rise in the sheer numbers of poor people that might have otherwise accompanied population growth.

In Sub-Saharan Africa, 298 million people were living in extreme poverty in 2004, practically the same number as in 1999, whereas the number of poor had increased continuously in the previous two decades.

The report finds that, in the past decade, poverty reduction was not always or everywhere commensurate with income growth. In some countries and regions, inequality worsened, as poor people did not reap the fruits of economic expansion, because of a lack of job opportunities, limited education or bad health.

"Growth is essential to reducing poverty, but it isn't the only factor," said Francois Bourguignon, World Bank Chief Economist and Senior Vice President for Development Economics.

"The World Development Indicators go beyond growth and poverty rates to ask how income is distributed, whether health care and education are improving, and to assess the business environment. These factors all affect the quality of people's lives," he added.

World Development Indicators 2007 (WDI), which provides a detailed picture of the world through data, finds strong performers in all regions, with notably fast growth in GDP per capita among many states of Eastern Europe and the former Soviet Union.

But it also finds that the countries with the highest rates of under-5 mortality a decade ago have, on average, made the slowest reduction in mortality.

"These results are worrying," says Alan Gelb, Director of Development Policy in the World Bank, "The fact that under-five mortality is 15 times higher in low income countries than in wealthy ones is a stark example of how far we still need to go."

Despite the remarkable progress in the poverty reduction, the World Bank has warned that many challenges ahead before reaching the Millennium Development Goals (MDG).

The 2007 Global Monitoring Report, released by the World Bank and the IMF earlier, noted there are regions, Sub-Saharan Africa and South Asia in particular, where a number of countries are seriously off track to meet the millennium goals, and many people are being left behind.

"Many poor countries are making the difficult decisions needed to get their policies aimed at poverty reduction and growth. But they cannot accomplish this task alone. They need to have reliable, predictable and efficiently delivered aid from their partners," said Rodrigo de Rato, IMF Managing Director.

"Persistent poverty and unequal opportunities for women slow development and block attainment of the MDGs. Likewise, fragile states need urgent attention if the goals are to be met," said World Bank Group President Paul Wolfowitz.

"We face the dual challenge of focusing on those most in need while also pushing ahead in strong-performing nations that are close to reaching their goals," he added.

Source: Xinhua