World Bank suggests 400m people to be in extreme poverty by 2030

by Ian Townsend


Untitled

The latest Global Monitoring Report from the World Bank and the International Monetary Fund released on 8 October 2014 finds that extreme poverty fell to just over 1 billion in 2011. This amounts to around a sixth (17.0%) of the developing world and just under a seventh (14.5%) of the global population. Since 1990 almost a billion people (910 million) have been raised above the most basic income level of $1.25 a day. More than a quarter of these people (26.5%) have been lifted out of extreme poverty since 2008, with China and India alone lifting 232 million people above$1.25 a day.

Prospects for 2030

Major progress by 2030 looks possible from the projections, included in the report for the first time this year.* The World Bank’s baseline analysis (involving a range of assumptions) suggests the world could get extreme poverty levels below 5% by 2030. But this would fall some way short of the likely demand in the post-2015 sustainable development goals to get to zero extreme poverty by 2030.

The projections show more than 400 million people living on less than $1.25 a day by 2030. In sharp contrast to the strides South Asia looks likely to make, sub-Saharan Africa is likely to still be home to over fourth-fifths (81.3%) of extremely poor people in 2030, despite making progress over the period. The number of extremely poor people in sub-Saharan Africa would fall by less than a fifth in 15 years to stand at 335 million by 2030.

Sub-Saharan Africa would also have by far the highest incidence of poverty, with just under a quarter (23.6%) of its people living in extreme poverty. Latin America & the Caribbean comes a distant second at just 3.1%. At the same time, extreme poverty could be all but ended in East Asia & Pacific and East Europe & Central Asia regions. One region – Middle East & North Africa – could see poverty increasing by over 40% between 2015 and 2030, from 7.3 million to 10.3 million.

Greater equality vital to get to zero in time

As World Bank President Jim Kim recently noted, while one billion fewer people were living in extreme poverty in 2011 than in 1990, “helping the next billion escape poverty will be far more difficult”.

In our 2013 Investments to End Poverty report, we showed that the world would not get to zero poverty through economic growth alone. Faster, more equally shared growth will be essential, with targeted policy interventions to help the poorest people.

The projections of 5% extreme poverty by 2030 would mean the World Bank’s 3% target would be missed. Mr Kim said “we will not finish the job unless we find ways to reduce inequality, which stubbornly persists all over the world. This vision of a more equal world means we must find ways to spread wealth to the billions who have almost nothing.”

Sources:

Footnote

* For more on World Bank projections, see “Ending Poverty and Boosting Shared Prosperity, Development Goals and Measurement Challenges”, World Bank Policy Research Report (2014)

Data table (XLS)