Fighting Poverty in Emerging Markets

The article talks about combating poverty in China, India, and Brazil. The author states that in 1981, 84% of China’s population was below the poverty line; while in 2005 the share was just 16%. India did least well, cutting the share below the poverty line from 60% to 42% between 1981 and 2005. This implies an annual reduction of 1.5% a year. Although the three countries did very well in fighting poverty, now they face certain problems. According to the author, India and China now see growing inequality. In India, this is especially affected by the legacy of the caste system. I think that for China now it is natural to see more inequality as it is transitioning to a market economy, which implies a certain level of inequality that may be even called a market failure. However, since the transition is gradual, the negative effects are greatly reduced.