According to the latest World Bank report, almost 800 million people (8.5 percent of the global population) live in extreme poverty on less than $2.15 per day.
The World Bank’s Poverty & Inequality Platform (PIP) uses over 2,400 household surveys from 172 countries to reach the conclusion that around 3.5 billion people (44 percent of the global population) remain poor by a standard that is more relevant for upper middle-income countries ($6.85 per day).
According to Oxfam’s research, inequality is high or increasing in 25 (54 percent) of the countries that receive funds from IDA. The 2024 Global Multidimensional Poverty Index (MPI) report has pinpointed a strong link between violent conflict and multidimensional poverty – a concept that defines lack of access to health and education facilities as components of poverty. This year’s update of the global MPI database presents data from 112 countries covering 1,359 subnational regions. The results show that 1.1 billion of 6.3 billion people live in acute multidimensional poverty, over half of them children. Poverty markers include a lack of adequate housing, sanitation, electricity, cooking fuel, nutrition and schooling facilities.
It is relevant to mention here that the introduction of the international poverty line in 1990 established a global benchmark that captured the daily cost for a person to meet their basic needs in a low-income country, which at that time was $1. The line has been updated several times since then to reflect changing prices and the costs of meeting basic needs. The most recent update sets it at $3 per person per day.
It is estimated that at the present pace of progress, it would take decades to eradicate extreme poverty.It is now universally accepted that poverty is multidimensional and there are many non-monetary indicators such as access to education, health, sanitation, water, and electricity which deepen deprivation. Different measures of poverty help provide a broader view and can guide policy decisions to improve the lives of the poorest and most vulnerable.
It is said that globally one in five people live in a highly unequal society. A new World Bank indicator tracks the number of economies with high inequality. These are defined as economies with a Gini index greater than 40, based on income or consumption from the most recent household survey for a country. Based on this metric, 49 countries, comprising 22 percent of the world’s population, had a Gini index above 40.These 49 economies with high inequality are concentrated in Latin America and the Caribbean as well as in Sub-Saharan Africa.
In 2024, Sub-Saharan Africa accounted for 16 percent of the world’s population, but 67 percent of its population was living in extreme poverty. This figure rises to three quarters when we include all fragile and conflict-affected countries. Based on the current estimates, 622 million people (7.3 percent of the global population) are projected to live in extreme poverty in 2030. In addition, 3.4 billion people (nearly 40 percent of the world’s population) will likely live on less than $6.85 per day. The World Bank estimates that it will take decades to eradicate extreme poverty and more than a century to lift people above the $6.85 per day poverty line.
The situation demands urgent remedial action by the international community. Countries will need to improve the income level of the working classes by creating more and better jobs and investing in education, infrastructure and basic services. This will enable people living in poverty to benefit more from and contribute to growth, and to enhance their resilience to economic shocks.
Climate change also poses a fundamental risk to poverty and inequality reduction. Today, one in five people are at risk of an extreme weather event in their lifetime. This means they are likely to face severe setbacks in their livelihoods, significantly hindering poverty reduction efforts. People’s risks to climate hazards are expected to increase unless resilience is strengthened and greenhouse gas (GHG) emissions decline.
Average income growth alone is not a sufficient marker of development and poverty reduction. The Global Prosperity Gap, a new indicator of shared prosperity used by the World Bank, tracks how far the world is, on average, from a threshold of $25 per person per day with a specific emphasis on the incomes of the poorest.Progress in reducing the Prosperity Gap has slowed down since the Covid pandemic, highlighting the need to adopt innovative solutions to the problem at hand.
To improve the situation, governments around the world will have to prioritize poverty reduction by delivering economic growth and reducing multidimensional poverty. Middle-income countries will have to aim at income growth that reduces vulnerabilities, while rich countries, which account for four-fifths of global GHG emissions, will need to act fast in transitioning to low-carbon intense economies while managing transition costs. According to experts, greater international cooperation is vital to enable the transition toward more sustainable and resilient economies and create a world free of poverty and deprivation.