The first thing is to define who we are talking about. In global terms we are talking about the bottom 20% of the world's population. These are the people facing extreme poverty. They live on less than US$1.25 per day. That is less than the price of a cup of coffee. Half the cost of the icecream that you buy on a summer day!
The definition changes slightly over time. It used to be those who lived on less than "a dollar a day". With inflation that has gone up, but it doesn't mean that they can buy anything more with it. We used to talk about "the bottom billion", but the world's population has increased and the bottom 20% are now more than a billion people.
The definition of the countries where the poor live has also changed. It used to be that the majority of those in extreme poverty lived in what were classified as low income countries (LICs). These were the 63 or so poorest countries, recognised as the economic basket-cases, close to economic collapse. However over the last decade the economic condition of some of these countries has dramatically improved. This has particularly been true for some of the most populous of these countries. The most recent data has only 40 countries in the LIC group. The others have moved up, and are now classified as middle income countries (MICs).
Unfortunately the new wealth in these countries hasn't reached those at the bottom. New research estimates that 72% of the "bottom billion" now live in what are officially middle income countries. The two biggest examples are of course India and China. Both have seen amazing development, and are becoming economic power-houses on the global scene, and yet they still have large numbers of people in the extreme poverty category. Recent figures show that India still has 456 million people living under the US$1.25 per day poverty line (see chart). In fact many of these people have seen their situation get worse, not better.
This raises significant questions for aid and development policy. If China and India can afford to run space programmes and set up their own aid programmes to help other countries, should they still be getting help from us? Both countries now have their own millionaires and even billionaires. Serious questions have been raised in the UK about continuing aid to India, and whether the time is coming for that to stop. "One read of the data is that poverty is increasingly turning from an international to a national distribution problem, and that governance and domestic taxation and redistribution policies become of more importance than overseas development assistance(ODA)" says a recent article.
Here of course is the real proof that the "trickle down" theory doesn't trickle! The trickle down theory argued that all that was needed to deal with global poverty was the economic improvement of the poor countries. That wealth would "trickle down" to the poor, and everyone would be better off. Yes, on a political and international level it is clear that there is a distribution problem, and a need for government policies that will ensure an equitable distribution of wealth to meet the needs of the poorest.
Clearly what is also needed is much more targeting of aid to reach specific communities. Development assistance has to target poor people, not poor countries. This is what non-government aid organisations are best at. Organisations like BANZAid can target specific communities and needs. Whether in slums or rural villages, we can support education and health needs, and establish programmes to help people access economic opportunities.
There is no excuse for those of us living in the wealthy countries to turn away from the needs of the poor, whatever country they are living in!