Extreme disparity attack on democracy

People receive a Christmas meal for the homeless and the poor at an indoor gym hall in Athens December 25, 2014. Hundreds of people visited the hall for a holiday meal provided by the city of Athens. [Photo/Agencies]

The economic geography of the world is changing. The eurozone faces the specter of another round of stagnation, Japan has slipped into recession, and the United States, despite relatively strong performance in the latter part of the year, has raised concerns worldwide with its exit from quantitative easing.

Emerging economies, however, have continued to perform well. India and Indonesia are growing at more than 5 percent a year, Malaysia at 6 percent, and China by more than 7 percent.

The scale of the global change can be seen when purchasing power parity (PPP) - a measure of the total amount of goods and services that a dollar can buy in each country - is taken into account. According to the 2011 figures, India is now the world's third-largest economy in terms of PPP-adjusted GDP, ahead of Germany and Japan. The data also showed that China would overtake the US as the world's largest economy in PPP terms sometime in 2014 - a shift that, according to our (World Bank) estimates, occurred on Oct 10.

Despite this progress, a large proportion of people in developing countries remain desperately poor. Globally, the poverty line is defined as a daily income of $1.25, adjusted for PPP - a line that many criticize as shockingly low. But what is truly shocking is that nearly 1 billion people - including more than 80 percent of the populations of the Democratic Republic of Congo, Madagascar, Liberia and Burundi - live below it.

One reason global poverty has been so intractable is that it remains largely out of sight for those who are not living it. The fact that most participants in discussions on global poverty - the readers of this commentary included - know few, if any, people who live below the poverty line is an indication of the extent of the world's economic segregation. If poverty were communicable, its incidence would be far lower by now.

Fortunately, a chorus of voices - not just from civil society groups, but also from international organizations - has given rise to a global movement to end poverty. There is now a growing agreement that global poverty is not just a problem of the poor. Though moral outrage is important, it is not enough when it comes to crafting policy. Policymakers need data and, equally important, the ability to analyze it.