Poverty and Vulnerability in India and China
Poverty and Vulnerability in India and China

Author(s): Katsushi Imai
Subject(s): National Economy, Supranational / Global Economy, Socio-Economic Research
Published by: Hokkaido Slavic-Eurasian Reserarch Center
Summary/Abstract: “Reporting an 80-million drop in extreme poverty in the two years to 2004, the Bank said the improvement was entirely due to the rapid expansion in Asia's two most populous countries” (Guardian, 16 April 2007 ). “With an average annual growth rate of 10 percent, China has lifted over 600 million of its 1.3 billion citizens out of extreme poverty—those who earn less than $1 a day—since 1981. In the same time period, India's 6.2 percent average annual growth rate has brought an estimated 300 million of its 1.1 billion people out of extreme poverty…The World Bank estimates that the number of poor increased by at least 100 million as a result of the food and fuel crises” (Newsweek in November 2008). The first quotation suggests that poverty reduction in India and China is important simply because of the large share of the poor in these two countries, in particular in India in the world’s poor. Economic growth in these countries has driven the poverty reduction of the world in recent years. The graphs in Appendix 1 suggest that i) higher income growth has a close association with poverty reduction, ii) poverty reduction and income growth are higher in China than in India, and iii) higher income growth seems associated with higher income Gini. That is, while income growth led to the poverty reduction in absolute terms in China, the relatively rich benefited more in relative terms. The second quotation suggests the fragility of poverty reduction outcome as those above the poverty line would fall into poverty as a result of food and fuel crises. This signifies the importance of addressing vulnerability as opposed to poverty. While it would be difficult to cover all the aspects of poverty in China and India, this paper focuses on a few important aspects to analyze poverty and India and China drawing upon my research

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