Leaders of the institutions that guide global economic development have set 2015 as a target date for reducing by half the number of human beings who live in extreme poverty. The World Bank seems to have launched this campaign and many institutions have joined, including international NGOS like OXFAM and CARE and national agencies like Britain's Department for International Development. A United Nations conference met recently in Monterrey, Mexico, to rally support for this exercise. Those most influential in setting the global agenda for economic development agree that reducing poverty must be the top priority and that reducing extreme poverty immediately is imperative. 2015 symbolises their seriousness and sense of urgency. If they succeed, life will improve for hundreds of millions of people in the next 13 years.
Some history might be useful for those in the public who would join this campaign or seek to monitor its conduct and progress. 'Poverty' came to the fore in the global development agenda during the 1990s, a decade famous for the rapid pace of globalisation, when markets monopolised the minds that planned our global future. The United States exemplified fulsome freemarket growth promoted by global development institutions, led by the World Bank.
The Economist (26 April, 2001) called the nineties "probably the most exuberant period of wealth creation in human history," and showed how the bulk of new wealth came into the hands of the rich. Millionaires and billionaires multiplied, and by 2001, the richest one percent of the world population came to hold a third of the world's wealth. More than half the world's 425 billionaires live in the US, which exemplifies trends in global inequality. Between 1977 and 1999, the richest 20 percent of American households increased their share of national income from 44 percent to 50 percent, and the richest 1 percent increased their share six times more, from 7 percent to 13 percent. In America and around the world, the economic boom accomplished very little poverty reduction and it actually worsened extreme poverty. The most severe new poverty fell on Africa, where average households now consume 20 percent less than 25 years ago.
The nineties epitomised and aggravated a much longer trend. In a study for the World Bank, aptly entitled, "Divergence, Big Time," Lant Pritchett calculated that between 1870 and 1985, ratios of per capita income between the richest and poorest countries increased more than six-fold, as income levels dispersed over an ever-widening range of variation and the richest and poorest economies clustered on opposite ends of a broader spectrum. The 1992 UN Human Development Report indicated that global inequality accelerated in the 1970s and 1980s (see chart).