Poverty in Southeast Asia: Lower-Middle Income Countries

In our previous post, we explored upper-middle income countries in East Asia and Southeast Asia to see how the poverty landscape looks with higher poverty thresholds. This time, we look at lower-middle income countries.

High levels of poverty in Timor-Leste and Papua New Guinea

Timor-Leste and Papua New Guinea both have more than 30% of their populations below the $1.90 (in 2011 PPP) global poverty line. As a result, they have the highest poverty levels in the region and are not expected to achieve SDG 1 by 2030. Timor-Leste is one of the youngest countries in the world, it became independent in 2002 after decades of conflict. The country has made progress towards reaching stability and peace but poverty levels remain high. Almost 75% of the population of Timor-Leste live on less than $3.20 a day and this proportion has barely changed since 2010. However, our latest projections indicate that the next decade will be one of improvement. By 2030, half of the population of Timor-Leste is expected to live below the $3.20 a day threshold.

Papua New Guinea, with more than 800 different languages and more than 10,000 different ethnic clans, is one of the most diverse countries in the world. The population lives mostly in rural areas across 600 islands. All of these factors pose a significant challenge towards eradicating poverty. Half the population of Papua New Guinea has less than $3.20 per day. Over the next decade, this is expected to decrease to 42%. By 2030, Papua New Guinea is expected to be the country in the region with the largest share of its population living on less than $1.90 a day since Timor-Leste is expected to reduce poverty at a much faster pace.

Laos to achieve SDG 1 by the middle of the next decade

Poverty in Laos is being reduced quickly. Currently, more than 10% of Laos' population is living on less than $1.90 a day but this is expected to go below 3% by 2024, meaning the country will have achieved SDG 1. Looking further ahead, poverty is expected to continue to decrease and will be below 1% by 2027. Laos is one of the fastest growing countries in the region. Improved infrastructure is expected to accelerate growth. However, there are still many challenges in the country. 30% of children suffer from malnutrition and, according to its Human Capital Index, a child born today is expected to only reach 45% of their potential. Using the $3.20 per day threshold, around 40% of the population of Lao are currently under this line. This is expected to be drastically reduced over the next decade. By 2030, less than 10% of the population is expected to be below the lower-middle income international poverty line.

Less than 1% of Cambodians living on less than $3.20 a day by 2026

Cambodia has managed to successfully reduce poverty in recent years and achieved SDG 1 in 2014. Our latest forecasts indicate that the country will continue its poverty alleviation efforts. By 2026, less than 1% Cambodians are expected to have less than $3.20 a day.

Indonesia and the Philippines to achieve SDG 1 next year

Indonesia and the Philippines are also reducing poverty levels at a fast pace. Both are expected to achieve SDG 1 next year. The great dynamism of the Filipino economy with its growing middle class and young population, has allowed years of sustained economic growth. Remittances from the millions of Filipinos working abroad and the solid fundamentals of the economy are expected to raise the country's status to an upper-middle income economy in the coming years.

Indonesia is showing similar economic prowess. The archipelago has maintained economic and political stability over the last two decades allowing it to achieve impressive growth and reduce poverty. Currently, both Indonesia and the Philippines have a quarter of their population living on less than $3.20 a day. Over the next decade, this number is expected to decrease to 3% in the Philippines and 5% in Indonesia.

Myanmar and Vietnam: poverty reduction standouts

According to our models, Myanmar has steadily reduced extreme poverty in the last few years and achieved SDG 1 last month. Recent structural reforms are expected to support growth in the medium term which in turn will support a further reduction in poverty. In 2010, 17% of the population were living on less than $1.90 a day. In the next ten years, we expect to see a similar rate of poverty reduction in the population living on less than $3.20 a day. The rate of poverty reduction over the next decade is nearly identical to the rate of poverty reduction in the last decade.

25 years ago, Vietnam was one of the poorest countries in the world. Today, it boasts one of the best poverty numbers among lower middle-income countries in East Asia and Southeast Asia. Only 4% of Vietnamese people are living on less than $3.20 a day. By 2027, this is expected to be below 1%. A quarter of the population are currently living on less than $5.50 a day (the poverty line that corresponds to upper-middle income countries). Even by this standard, less than 5% of Vietnam’s population are expected to be below this line by the end of the next decade.


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