Despite tremendous progress in poverty reduction over the last two decades, poverty still persists. Along with South Asia, Africa is a region where large numbers of people continue to live in extreme poverty. It is also a region where there is clearly room for higher foreign trade levels (see Chart). Given that trade can generate growth – and thus poverty reduction – focus on trade-related reforms (e.g. lower tariffs, better logistics, and trade facilitation) deserves to be a high priority of the region.
Brazil’s success in reducing poverty and income inequality has been widely reported in recent years.
The World Bank has been tracking the world's progress against poverty since the late eighties, but the release of 2008 data was the first time in which all regions of the developing world showed a decline in the number of people living below poverty lines!
Persistently high unemployment rates continue to trouble policymakers in developed and developing countries alike—but the recent Job Trends report brings some good news. After successive years of disappointing labor market performance, several countries in Eastern Europe may finally be turning the corner. These countries suffered most during the financial crisis, so the recovery in job creation is much needed to boost family incomes. In the rest of the developing world, the headlines are positive even while we see some moderation in employment and wage growth in Latin America and East Asia.
I have two concerns at this stage. I suspect most observers of the world economy share my first concern that the incipient recovery is fragile, given the continuing economic turmoil in Europe. But I am also concerned with what’s happening with specific groups, such as youth and women. I have a hunch that the recovery is and will be uneven with youth, women and the less skilled having a harder time finding jobs—even if aggregate numbers show steady gains. The crisis hit young workers hard, particularly young men, and countries are dealing with long-term consequences. Unfortunately, few countries know what’s happening with groups of workers because the data are not collected routinely or if they are, the results are available only with a relatively long lag time.
Where recent data are available, the story is mixed. Although youth unemployment remains alarmingly high at 20-30 percent,
Investing more on roads, bridges and schools is an essential part of President Obama's American Jobs Act. If this is important in the current U.S. context, the role of both infrastructure and education in job creation is even more fundamental in developing countries, where there's much more to be done than in the U.S. and other advanced economies.