To eradicate poverty, development practitioners must tackle inequality
DI’s Deborah Hardoon explores why understanding the relationship between poverty and inequality needs to be high on the sustainable development agenda.
Reducing inequality is explicitly recognised as a goal of Agenda 2030, and Sustainable Development Goal 10 aims to “reduce inequality within and among countries”. The pledge to Leave No One Behind requires us to address discrimination and the root causes of this inequality.
In a new briefing and associated factsheet, we explore the relationship between poverty and inequality and highlight key global trends. It’s clear that to reduce poverty in all its forms, inequalities must be measured, understood and tackled alongside other development objectives. As such, data and evidence on inequality should be essential reading for policymakers and practitioners.
Inequality in focus amid the Covid-19 pandemic
During the 1990s and the start of the 21st century, extreme economic poverty fell rapidly. This was helped by strong economic growth in many previously lower income countries, particularly China and India. This progress has stalled in recent years, with extreme poverty increasingly concentrated in fragile and conflict-affected places.
Poverty reduction was then thrust into reverse as Covid-19 swept across the world. We estimated that between 2019 and 2020 the number of people living in extreme poverty, defined as living on less than US$1.90/day, increased by 50 million. But not everyone was struggling. In the same year, according to Forbes, billionaires increased their net wealth by US$1.9 trillion.
Covid-19 does not discriminate, and has affected almost every country on the planet. However, in practice we know that the short and long-term impacts of the virus itself, and the knock-on social, economic and political challenges have had very different effects depending on who you are, where you live and the resources you have to respond to the crisis. Least developed countries, where the majority of people in extreme poverty live, have allocated 580 times less per person in stimulus packages than high income countries. Moreover, vaccine inequity will constrain the recovery in lower income countries, where on average just 10% of the population has received at least one vaccine dose compared with 78% in high income countries (as of 7 February 2022).
The World Bank warns that the challenges for low-income countries will continue into 2022, with slower global growth, increasingly burdensome debt and rising inflation. Advanced economies are expected to achieve a full output recovery by 2023. Prior to the pandemic, reducing inequality had increasingly been recognised as a means to achieve further poverty reduction. Now, this feels even more essential as inequalities have been laid bare and exacerbated by the pandemic, with enduring consequences, particularly for the people living in greatest poverty.
Inequality data is useful across the development policy spectrum
In our new factsheet, we provide a snapshot of some of the key global inequality trends relevant to development practitioners. Understanding how resources and opportunities are distributed can provide a powerful basis for understanding how to tackle inequality, poverty and broader development objectives together.
For example, data on global greenhouse gas emissions shows that people living in countries which have produced the least emissions are facing the highest costs of the climate emergency. But critically, the difference between low emitters and high emitters within the same country now account for two thirds of the inequalities of global per capita emissions. Understanding these trends can help to identify opportunities for reducing emissions without having a detrimental impact on the poorest people within a country.
Disaggregated data that picks up differences in opportunities and outcomes between groups or individuals that share particular characteristics can also be vital to identifying not only where there are pockets of poverty, but also underlying exclusion and discrimination that drive poverty. During the 2022 Global Disability Summit, we highlighted the role that better data on persons with disabilities can play. Not only is it important for identifying the specific inequalities people face, but engagement in the generation, analysis and use of this data can enable meaningful inclusion in processes to address them.
Addressing data challenges
Inequality is complex, multidimensional and can be measured by many different indicators which require timely and comprehensive data about people and their lives. In many of the most fragile and conflict-affected places, where poverty and inequality is most pernicious, the data infrastructure is lacking. But DI is using the data that is available to try to understand and measure inequality better. Our briefing goes into more detail on the measurement options and data challenges associated with inequality.
It is clear that to eradicate poverty, development practitioners must tackle inequality. To support this, DI will continue to provide data-driven evidence and analysis to help our partners develop policies and programmes to Leave No One Behind.
Our facsheet Inequality: Global trends explores the multidimensional nature of poverty in more detail.
Inequality: Global trends
This factsheet presents and interprets recent trends in levels of inequality globally using a number of different datasets.
Economic poverty trends: global, regional and national
Poverty is complex and it can be described and measured in a variety of ways. In this factsheet we unpack some of the key terminology alongside the latest trends in poverty at the global, regional and national levels.
Inequality, measuring it and why it matters for poverty reduction
This briefing explores the relationship between poverty and inequality, and shows that measuring, understanding and reducing inequality should be central to efforts tackle poverty, discrimination and exclusion.