Global Poverty and the New Bottom Billion: What if Three-quarters of the World's Poor Live in Middle-income Countries?

Abstract

This paper argues that the global poverty problem has changed because most of the world's poor no longer live in low income countries (LICs). Previously, poverty was viewed as an LIC issue predominantly; nowadays such simplistic assumptions/classifications are misleading because some large countries that graduated into the MIC category still have large numbers of poor people. In 1990, we estimate 93 per cent of the world's poor lived in LICs; contrastingly in 2007–8 three quarters of the world's poor approximately 1.3bn lived in middle-income countries (MICs) and about a quarter of the world's poor, approximately 370mn people live in the remaining 39 low-income countries – largely in sub-Saharan Africa.

This startling change over two decades implies a new ‘bottom billion’ who do not live in fragile and conflict-affected states, but in stable, middle-income countries. Such global patterns are evident across monetary, nutritional and multi-dimensional poverty measures. This paper argues the general pattern is robust enough to warrant further investigation and discussion.