Returning to pre-COVID-19 reduction rates is not enough to end extreme poverty

Sub Levels

This is the first blog in a series on how countries can correct their trajectory and advance global poverty reduction. For more on this topic, see our 2022 Poverty and Prosperity Shared Report.

In 2020, the COVID-19 crisis caused the most significant setback in global poverty reduction in decades, with as many as 71 million people living in extreme poverty that year compared to 2019. rice field. But a closer look at poverty trends reveals much more. Progress in poverty reduction was already slowing even before the pandemic hit.

slow down progress

Between 1990 and 2014, the world made astonishing progress in reducing extreme deprivation. More than 1 billion people have been lifted out of extreme poverty. The global poverty rate declined by an average of 1.1 percentage points per year, from 37.8% in 1990 to 11.2% in 2014 (Figure 1).

Figure 1: 2.15 Global poverty at USD poverty line, 1990-2019

But in later times Between 2014 and 2019, poverty reduction slowed to 0.6 percentage points per year. This is the slowest rate in the last 30 years. (Figure 2). Poverty decreased on average by at least 1 percentage point per year for all five-year periods to 2015. except for the period 1995-2000 (1996-1998), when global poverty increased for his second consecutive year due to the Asian financial crisis. Mathematically, the lower the poverty rate, the harder it is to keep up the pace of poverty reduction. But this is not the root cause of the trend reversal. The main reason for the slowdown is that extreme poverty is increasingly concentrated in areas with low per capita income growth.

uneven progress

Between 1990 and 2014, most of the world’s poverty reduction took place in two regions: East Asia and the Pacific, and South Asia. In East Asia and the Pacific, extreme poverty rates fell from 66% of the population in 1990 to 4% in 2014. In South Asia, poverty rates fell from 50% in 1990 to 18% in 2014. In contrast, sub-Saharan Africa has seen a much slower rate of poverty decline, falling from 60% in 1990 to 38% in 2014.

Figure 2: Annual change in global poverty rate by time period

Since 2014, South Asia has been the only region with a significant proportion of the world’s poorest, and continues to see substantial poverty reduction. Over the five years from 2014 to 2019, the region’s extreme poverty rate halved to 9%. In sub-Saharan Africa, as GDP growth slowed and population continued to grow rapidly, poverty rates fell by just 3 percentage points to 35%.

As a result, the share of the world’s extreme poor living in Sub-Saharan Africa reached 60% in 2019. This is her 389 million out of her 648 million people in extreme poverty in the world. This is six times his share of the region in 1990. At the time, this region accounted for only 13% of her total (Fig. 3).

Figure 3: Regional distribution of global poverty, 1990–2019

What does this mean for the goal of ending extreme poverty globally?

These regional trends support the first Sustainable Development Goal of eradicating global poverty by 2030, or the World Bank Group’s goal of reducing global extreme poverty to below 3% by 2030. It has important implications for the ability to achieve. Estimates from 2019 onwards use data from MahlerⓡYonzanⓡGrowth projections from Lakner (2022) for 2020 and his Global Economic Prospects for 2021 to 2024 are described here. Poverty beyond 2024 is projected using historical average growth rates for each country from 2010 to 2019 (see the Poverty and Prosperity Shared Report 2022 for details).

We estimate that poverty will fall to less than 3% of the population in most regions by 2030. — However, projections for the Middle East and North Africa are uncertain due to insufficient data. However, to reach such a target in sub-Saharan Africa, each country in the region would need to grow at around eight times the average annual growth rate achieved between 2010 and 2019. .

In a more realistic scenario, 30% of sub-Saharan Africa’s population is expected to still be in extreme poverty in 2030. This will bring the global extreme poverty rate to nearly 7% in 2030, more than double his target set by the World Bank Group. 3% (Figure 4).

Figure 4: Projections of extreme poverty to 2030

Dealing with vulnerabilities

One reason for the high poverty rates in sub-Saharan Africa is the strong link between extreme poverty and the status of fragile and conflict-affected countries. Only 10% of the world’s population lives in fragile and conflict-affected areas, yet 40% of people living in extreme poverty live in these countries.

According to 2019 data, out of 46 African countries with data available for global poverty monitoring, 19 are affected by conflict and fragility. These include Nigeria, the most populous country in the region. Nigeria has made little progress in reducing poverty in the decade leading up to the pandemic. And in the Democratic Republic of the Congo, her second poorest country in the region, more than half the population lives in poverty. The population was in extreme poverty in her 2019.

Fragility has also contributed to increased poverty in the Middle East and North Africa. While extreme poverty rates remain relatively low, it is the only region where poverty levels have risen since 2014, largely due to conditions in fragile and conflict-affected economies. The latest data for the region show that the extreme poverty rate is 7.5%, three times higher than in 2014. However, estimates for the Middle East and North Africa are subject to significant uncertainties. Due to the lack of recent survey data for some countries, data coverage for the region fell below 50% in 2019 and regional poverty estimates could not be published. The latest data is from 2018.

As we live in a time of uneven post-COVID-19 economic recovery and other crises, timely and accurate data to measure progress in reducing extreme poverty is critical. Data availability has improved in some regions of sub-Saharan Africa, especially in West Africa. However, significant gaps remain in other regions, such as East and Southern Africa. This issue has been a key focus of global poverty monitoring over the past decade, as poverty is increasingly concentrated in countries affected by conflict and fragility, making it more difficult to use traditional data collection methods. poised to influence

The authors are grateful for financial support from the UK Government through the Data and Evidence to Address Extreme Poverty (DEEP) research programme.

Related blog:

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *