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Chapter 2 The state of rural poverty today 47
Despite this historic shift towards urbanization, poverty remains largely a rural
problem, and a majority of the world’s poor will live in rural areas for many decades
to come. 24 Of the 1.4 billion people living in extreme poverty (defined as those living
on less than US$1.25/day) in 2005, 25 approximately 1 billion – around 70 per cent
– lived in rural areas. In East Asia the rural share of total poverty has been reduced to
just over 50 per cent, and in Latin America and the Caribbean, and the Middle East
and North Africa, the most urbanized regions, a majority of the poor now live in
urban areas. In South Asia, South East Asia and sub-Saharan Africa, by contrast, over
three-quarters of the poor live in rural areas, and the proportion is barely declining,
despite urbanization (figure 2).
Today, a little less than 35 per cent of the total rural population of developing
countries is classified as extremely poor, down from around 54 per cent in 1988;
while the corresponding percentage for the US$2/day poverty line is now just above
60 per cent, down from over 80 per cent in 1988. 26 This is mainly due to a massive
reduction in rural poverty in East Asia, where today the incidence of rural poverty is
around 15 per cent for the US$1.25/day line and 35 per cent for the US$2/day line.
Rural poverty has declined more slowly in South Asia, where the incidence is still
more than 45 per cent for extreme poverty and over 80 per cent for US$2/day poverty,
and in sub-Saharan Africa, where more than 60 per cent of the rural population lives
on less than US$1.25 a day, and almost 90 per cent lives on less than US$2/day. In
Latin America and the Caribbean, and the Middle East and North Africa the incidence
FIGURE 2 Rural share of total poverty
(Rural people as percentage of those living on less than US$1.25/day)
100
90
80
70
60
50
40
East Asia
South Asia
South East Asia
Sub-Saharan Africa
Latin America and the Caribbean
Middle East and North Africa
Developing world
30
20
Closest
1988
Closest
1998
Closest
2008
Source: Annex 1