Innovation and Development
Chapter 12: Addressing poverty
According to the World Bank, people in developing countries living on less than $1.25 – the international poverty line – has decreased from 1.9 billion people in 1990 to 1.29 billion in 2008. In percentage terms, this means a decline from 43 percent of the population in 1990 to 22.4 percent in 2008. In the industrialized countries, inequality has been on the rise. According to the 2011 OECD report, “Divided We Stand: Why Inequality Keeps Rising,” real disposable household incomes increased by an average of 1.7 percent per year in OECD countries over the two decades preceding the onset of the global economic crisis. However, in a large majority of these countries, the household incomes of the richest 10 percent grew faster than those of the poorest 10 percent, exacerbating the income gap. In Japan, the real incomes of those at the bottom of the income ladder have declined since the mid-1980s. Moreover, the richest 10 percent in OECD countries today dispose of an average income about nine times higher than that of the poorest 10 percent, or a ratio of 9:1. However, this ratio is not uniform across OECD countries. While the Nordic and many of the continental European countries enjoy a much lower ratio than the 9:1 OECD average, Italy, Japan, Korea, and the UK have a ratio of 10:1. In Israel, Turkey, and the US, the ratio is around 14:1, while in Mexico and Chile, it is 27:1. In the emerging economies of Argentina, Brazil, China, India, Indonesia, the Russian Federation, and South Africa,
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