By Nozipho Dlamini

Pretoria, April 17 (NNN-BUANEWS) The rates of global poverty fell in the first four years of the 21st century, according to new estimates published in the World Development Indicators 2007, released on Sunday.

The proportion of people living on less than one US dollar a day fell to 18.4 per cent in 2004, leaving an estimated 985 million people living in extreme poverty. By comparison, the total number of extreme poor was 1.25 billion in 1990, said the report.

"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," it said.

It added that developing countries had averaged a solid 3.9 per cent annual growth in Gross Domestic Products (GDP) per capita a year since 2000 and this contributed to rapidly falling poverty rates in all developing regions over the past few years.

Another key reason that the number of poor people fell by more than 260 million between 1990 and 2004 was because of China's massive poverty reduction over that period. In this regard, East Asia's extreme poverty rate dropped to nine per cent 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 numbers of poor people accompanied by population growth.

In Sub-Saharan Africa, 298 million people were living in extreme poverty in 2004, 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 lack of job opportunities, limited education or bad health.

World Bank Chief Economist and Senior Vice President for Development Economics Francois Bourguignon said growth was essential to reducing poverty, but it wasn't the only factor.

"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 said.

World Development Indicators (WDI) 2007 provides a detailed picture of the world through data. It includes information on health expenditures, transport and other infrastructure services, the quality of public sector management, internet access, access to improved water sources and carbon dioxide emissions.

The 11th edition of the WDI looks at countries that have done unusually well over the past decade. It further finds strong performers in all regions, with fast growth in GDP per capita among many states of Eastern Europe and the former Soviet Union.

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

Director of Development Policy Alan Gelb said these results were worrying. "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," he said.

Furthermore, the World Bank has used performance assessments of governments as a basis for allocating resources since the mid-1970s. In the annual Country Policy and Institutional Assessment (CPIA), bank staff evaluates country policies and institutions covering four main clusters: economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions.

In addition, the WDI 2007 lists the most recent CPIA data for the 76 countries eligible to receive grants or credits from the International Development Association (IDA), the World Bank's funding arm for the poorest countries.

CPIA indicators measure the extent to which a country's policy and institutional framework supports sustainable growth and poverty reduction as well as the effective use of development assistance.