Between 1981 and 1996, the number of East Asians living on less than $1.90 a day<sup>3</sup> had fallen from 1.1 billion to 704 million. The strategy was working, at least in East Asia.

In 1999, the World Bank began working on a new World Development Report on poverty. Prompted by setbacks in East Asia due to the 1997‐98 financial crisis (especially in Indonesia, where millions were pushed back into poverty) and dissatisfaction with the pace of poverty reduction in the rest of the world, where people living in extreme poverty had stayed at about 1 billion between 1990 and 1999, the report revisited the 2.5‐point strategy. WDR 2000 _Attacking Poverty_ called for more attention to institutions, participation, and income redistribution. It outlined a new approach based on increasing empowerment, opportunity, and security for the poor.

These have proved to be tougher concepts to translate into policy, so the strategy advocated in the 2000 WDR has been difficult to operationalize. During the next two decades, with the possible exception of Indonesia and the Philippines, East Asian countries have generally stayed with the 2.5‐point strategy pioneered in Northeast Asia in the 1960s and 1970s. Even the countries that had been communist—China, Vietnam, Cambodia and Lao PDR—have used the 2.5‐point strategy to good effect. Just look at the numbers (Figure 1). In 1990, of the 1.9 billion people living in extreme poverty, about half, 996 million, were in East Asia, 575 million in South Asia, and 288 million in Sub‐ Saharan Africa. Today, 25 years later, the global sum is estimated to be about 700 million.<sup>4</sup> East Asia has 83 million people living on less than $1.90 a day, South Asia 231 million, and Sub‐Saharan Africa 347 million. Put another way, during the last 25 years East Asian countries reduced extreme poverty by more than 30 million—each year!

**Figure 1: Where the extreme poor are, by region – 1990 and 2015**

<!-- Start of picture text --> 1990 2015<br>Number of extreme poor: 1.9 billion Number of extreme poor: 702 million<br>5%<br>6%<br>12%<br>15% EAP<br>SAS<br>51% 33% SSA<br>49%<br>30%<br>Rest of World<br><!-- End of picture text --> With a quarter century of experience, it is reasonable to ask some questions: Does the 2.5‐point plan work everywhere? If it does not, what should be done instead? If it does work, have we learned to implement it efficiently in places where the incidence of extreme poverty is as high today as it was in China and Vietnam in 1990, say in Nigeria and the Democratic Republic of Congo? Where it has worked, should the strategy be changed as extreme poverty is reduced to low levels?

3 The international poverty lines of $1.25 and $2.00 were updated to $1.90 and $3.10 in 2015 to reflect improvements in the measurement of purchasing power parity conversion factors. The new lines maintain the real purchasing power of the earlier lines in poor countries, and as such, the revised poverty estimates do not change drastically as a result of this update. See Ferreira et al. (2015) for a detailed discussion on the topic.

4 This number is statistically projected from the 2012 global poverty figures. The latest actual estimate of global poverty is 897 million people living in extreme poverty in 2012.

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