Extreme poverty to fall below 10 percent
October 6, 2015
The World Bank's projections show that the number of the world's poorest is expected to drop from 902 million people in 2012 - or 12.8 percent of the global population - to 702 million people by the end of 2015. It's been hailed as success towards achieving the 2030 goal of eliminating poverty.
"These projections show us that we are the first generation in human history that can end extreme poverty," World Bank president Jim Yong Kim said in a statement.
But the World Bank was also quick to warn that there is still a lot of work to do.
"The challenge going forward is that despite the rapid progress that we project between 2012 and 2015, we are likely to see that the pace is likely going to slow down," said Philip Schellekens, one of World Bank's lead economists and lead author of the upcoming Global Monitoring Report.
"The reason is that the remaining poor are harder to reach."
According to the bank's definition, people are considered extremely poor if they have to live off $1.90 or less (1.70 euros) a day. The bank is operating with an updated poverty line which previously stood at $1.25 (in 2005 prices). However, this does not mean that the poverty line has been raised - the figure has been simply adjusted to reflect a change in cost of living across 15 developing countries - and thus to preserve the same purchasing power.
"The new poverty line is in real terms exactly the same as the old poverty line," Schellekens told DW. "Every five years or so, the purchasing power parity used to convert national currencies into US dollars is updated. And we need those exchange rates in order to measure how much it would cost to purchase a very basic bundle of goods and services that would guarantee a minimum of living standard for the extremely poor."
Who's extremely poor?
This definition of extreme poverty does not sit well with everyone. "Poverty is much more complex and multi-faceted than that. Just because you have $1.90 does not mean you are not poor," said Deborah Hardoon, deputy head of research at Oxfam UK.
"We are talking about an incredibly low base line. This is the bare minimum, this is what has been calculated on the basis of an average of 15 developing countries where it was analyzed what would be necessary to keep somebody alive, to have enough food to eat and to basically sustain a live."
Others point to the fact that it's difficult to measure poverty, because the data at hand is not very good in the first place.
Instead of focusing on people's income levels, "you probably should pay more attention to other measures - for instance there are a lot of health measures that are much easier to measure, like the nutritional level of kids, how tall people are, access to water, access to sanitation," said Angus Deaton, professor of economics and international affairs at Princeton University.
Looking at income levels is indeed "very narrow", says the World Bank's Schellekens, "but it's something to start with."
It's limiting in the sense that "we do not look at what happens below the poverty line." That means a person who has an income of $1.80 a day is treated the same as a person who has an income of 50 [US] cents a day, he added.
"The poor are typically deprived in multiple dimensions, not just in the income dimension. So people may not have sufficient income to purchase certain goods and services, but they may also be limited in their access to good health, education, they may not be empowered, they may not be represented, they may not have a voice," he told DW.
Who stands to profit from growth?
While East Asia has made good progress, development is lagging behind in Sub-Saharan Africa, where 50 percent of the global poor live, Schellekens said.
Despite economic growth in some countries, "economic growth has not been shared equally. The poorest people haven't received the benefits or a sufficient amount of benefits of that growth," Oxfam's Hardoon said. She pointed to Nigeria and Angola that are rich in oil but where "still far too many people are living in extreme poverty."
Even in successful countries such as China and India, "many more people could have been pulled out of extreme poverty, if those in the poorest areas, in the lowest levels of income, had seen their fair share of the growth that the countries have experienced."
"We found that actually we are set to miss the target to eradicate extreme poverty by 2030 unless we look at the way that income and growth is distributed," she added.
Long way to go - and 'dose of good luck'
The World Bank speaks of "major hurdles" in the fight against extreme poverty - especially at times of slowed economic growth which it sees as the primary driver for poverty reduction - if it reaches the poor.
Whether the goal to eradicate poverty can be achieved will depend on "very rapid growth rates as well as targeted intervention to invest in the human potential of people - education, health care, women empowerment as well as insurance mechanisms that are provided to the poor and vulnerable so that they can be protected against illness, unemployment, drought and other calamities," Schellekens said.
"All of these polices will need to be put in place, but even then we need a dose of good luck to eradicate poverty in all of its forms everywhere, particularly in Sub-Saharan Africa."
And as more of the world's extremely poor climb just below the low-base poverty line, it's time to shift the focus and include those who are just above that poverty line, he added.