consumption. The indicators thus recognize that within the context of robust economic growth, mitigating inequality is also an important aspect of achieving the goal of sharply reducing poverty.

The post-2015 discussion is just getting started, and it is too early to know what its full shape will be. However, it would be very surprising if something like the current MDG1, eradication of Extreme Poverty, will not be part of the structure of goals—it may even remain broadly unchanged. Of course, the poverty picture globally has changed, so the targets may change. In particular, the target of halving the proportion of people whose income is less than one dollar a day has already been met at the global level, although not of course everywhere in the world, especially not in Africa and in fragile states. This evolution of the development landscape could lead to the adoption of a much more ambitious target for poverty reduction at the global and national levels. The World Bank, for example, is considering adoption of a target of reducing the proportion of people living below the “dollar-a-day” line<sup>8</sup> to zero or close to zero, and something like this target may well emerge in the post-2015 agenda.<sup>9</sup> Further, the global community may set itself a more ambitious agenda on time, to “bend the arc of poverty”<sup>10</sup> and eliminate it much faster than a quarter century time horizon.

There are, however, two features of the situation in 2015, compared to that in 1990, which require going beyond the simple target focused on the percentage or population below the dollar-a-day line. First is the evolution of inequality, and second is the growing recognition of the importance of vulnerability of the poor to a range of risks and shocks. Let us take each of these in turn.

From the perspective of 1990, the development experience of the 25 years previous to then was dominated by the “growth with equity” miracle of the East Asian economies. These economies had managed to achieve growth with falling inequality, which paid a double dividend for poverty reduction.<sup>11</sup> There was considerable discussion and indeed controversy on how they did this, and on the lessons for development policy. This is not the place to revisit that debate and in any event the experience post 1990 has been quite different. The dominant experience of the last 25 years has been the spectacular growth experience by China since the 1980s, and by India since the 1990s. However, this growth has been accompanied by sharp rises in inequality. Indeed, in the last 25 years, concerns have grown about increasing income inequality within countries in the world. Even in the East Asian “miracle” economies, inequality has increased. In developing Asia as a whole, more than 80 percent of the population lives in countries where inequality has increased since the 1990s.<sup>12</sup> This trend has been bucked by Latin American economies from 2000 onwards, but it is recognized that this has happened only because of concerted policy effort in these countries, which include significant social protection oriented policy interventions.<sup>13</sup> An analysis of global trends reveals fundamental economic forces, which are tending to push inequality upwards. An opening up to global trade and to market forces generally initially benefits those best prepared to take these opportunities—those with more capital, better skills, and better

> 8 Although “dollar a day” is the expression used commonly, the actual line is $1.25 per day in Purchasing Power parity (PPP).

> 9 See World Bank (2013).

> 10 These are the words of World Bank President Jim Yong Kim.

> 11 World Bank (1993), Adelman and Robinson (1978).

> 12 Asian Development Bank (2012).

> 13 Lustig, Lopez-Calva and Eduardo Ortiz-Juarez (2011).

5