The End of Extreme Poverty Is in Sight
For the first time since it began measuring it more than 25 years ago, the World Bank announced that extreme global poverty, newly defined as living on less than $1.90 a day, is expected to dip below 10 percent in 2015.
“This is the best story in the world today—these projections show us that we are the first generation in human history that can end extreme poverty,” said World Bank Group President Jim Yong Kim in a recent statement. “This new forecast of poverty falling into the single digits should give us new momentum and help us focus even more clearly on the most effective strategies to end extreme poverty.”
Since 2005, extreme poverty has been defined by the World Bank as living on less than $1.25 a day, but the revised $1.90 figure, say researchers, reflects a general decrease in the U.S. dollar’s purchasing power relative to the currencies of most developing countries. Basically, $1.90 buys today what $1.25 bought in 2005. Based on the new measure, the World Bank estimates that extreme poverty around the world will fall from 12.8 percent, or approximately 902 million people, in 2012, to 9.6 percent, or 702 million people, by the end of this year.
In September, the United Nations adopted the global goal of wiping out extreme poverty by 2030, which Kim admitted will not be easy.
“It will be extraordinarily hard, especially in a period of slower global growth, volatile financial markets, conflicts, high youth unemployment, and the growing impact of climate change,” Kim said. “But it remains within our grasp, as long as our high aspirations are matched by country-led plans that help the still millions of people living in extreme poverty.”
Historically, great progress has been made in reducing extreme global poverty. Nearly one-third of the world’s population was living below the poverty line just 25 years ago. Despite an increase in population worldwide, World Bank researchers estimate that there are now half as many people living in extreme poverty as there were in 1990, a trend researchers attribute to investments in education, health care, and social services, as well as global economic trends.
According to Francisco Ferreira, a senior adviser for the World Bank’s Development Research Group, in comments made to Inverse.com, the spike in commodity prices for food, fuel, chemicals, and metals that started in the early aughts allowed for a “remarkable period of economic growth in developing countries,” which in turn began to dramatically lessen the poverty rates in those countries.
Kim emphasized that “job growth, economic opportunity, and the quality of education, health, sanitation, and protecting the poor and vulnerable against sudden risks of unemployment, hunger, illness, drought and other calamities” will help keep extreme global poverty rates on this downward trend.
But that, according to World Bank officials, could be a challenge if the global economy doesn’t improve.
“Development has been robust over the last two decades but the protracted global slowdown since the financial crisis of 2008, is beginning to cast its shadow on emerging economies,” said World Bank Chief Economist Kaushik Basu, a former chief economic adviser to the Indian government. “There is some turbulence ahead. The economic growth outlook is less impressive for emerging economies in the near future, which will create new challenges in the fight to end poverty and attend to the needs of the vulnerable, especially those living at the bottom 40 percent of their societies.”
According to the World Bank, 95 percent of the world’s poverty is concentrated in three regions—East Asia and the Pacific, South Asia, and sub-Saharan Africa—but as researchers point out, “the composition of poverty across these three regions has shifted dramatically.”
In 1990, fifty percent of the global poor lived in East Asia, while 15 percent lived in sub-Saharan Africa. Today, those figures are reversed.
While poverty rates are declining worldwide, areas like sub-Saharan Africa, where countries are entrenched in conflicts, overly dependent on commodity exports, and are expected to see large population increases, remain especially vulnerable.
“The big challenge for 2030 is that remaining poverty will really be concentrated in sub-Saharan Africa,” says Ferreira. “There is an African face to poverty in 2030.”