How Have the Poor in South Asia Fared between 1980 and 2004? An Assessment of Living Conditions

Abstract

Development literature reports significant progress towards reducing poverty in the recent past in South Asia. The consistently positive rates of economic growth support this conclusion, as do the declining poverty headcount ratios. Policymakers facing enormous resource constraints, however, assess the progress in terms of a reduction in the poverty headcount, since any policy measure ought to target improvements in the living conditions of people with different characteristics. Slightly declining headcount ratios and poverty gaps in South Asia do not necessarily indicate meaningful progress in reducing poverty. In fact, the actual poverty headcount in the region has not declined; if anything, it has increased during the last 25 years. The relative economic conditions of the poor have also worsened considerably. Although the overall human development statistics have improved, it is far from certain that the genuine poor have equally benefited, since they are often difficult to reach out with services. This article calls for using comprehensive, economic and noneconomic measures of living conditions together with appropriate poverty lines.