Nearly Half The World Lives On Less Than $5.50 A Day

Despite progress in reducing extreme poverty, nearly half the world’s population lives on less than $5.50 a day, with a rising share of the poor in wealthier economies, the World Bank said Wednesday. In a twice-yearly report, the bank took a broader look at poverty to see where countries were lagging, even though the share of those living in extreme poverty — defined as earning less than $1.90 a day — has continued to come down in recent years. Under the expanded criteria for poverty, the report found the number of poor worldwide was still “unacceptably high,” while the fruits of economic growth were “shared unevenly across regions and countries.”

Even though the global growth of recent years had been sluggish, the total count of people in poverty declined by more than 68 million people between 2013 and 2015 — “a number roughly equivalent to the population of Thailand or the United Kingdom.” Despite the improvement, the report said current trends indicated the World Bank’s goal of reducing extreme poverty to less than three per cent of the world’s population by 2030 may be unattainable. “Particularly distressing findings are that extreme poverty is becoming entrenched in a handful of countries and that the pace of poverty reduction will soon decelerate significantly,” the report said.

At the $5.50-a-day threshold, global poverty fell to 46 per cent from 67 per cent between 1990 and 2015. The bank reported last month that extreme poverty had fallen to 10 per cent in 2015. With China’s rise, East Asia and the Pacific saw a 60 point drop in the poverty rate to 35 per cent, but the region is unlikely to continue to achieve that pace going forward as growth has moderated. And poverty is becoming entrenched in Sub-Saharan Africa, where 84.5 per cent of the population still live on less than $5.50 a day, the report said. And while two decades ago, 60 per cent of the global population lived in low-income countries, by 2015, that had fallen to nine per cent. The World Bank also cautioned that in many of those countries, the poor were not sharing equally in economic growth.

The World Bank Group’s mission is carved in stone at our Washington headquarters: “Our Dream is a World Free of Poverty.” This mission underpins all of our analytical, operational, and convening work in more than 145 client countries, and is bolstered by our goals of ending extreme poverty within a generation and promoting shared prosperity in a sustainable manner across the globe. There has been marked progress on reducing poverty over the past decades. The world attained the first Millennium Development Goal target—to cut the 1990 poverty rate in half by 2015—five years ahead of schedule, in 2010. Despite the progress made in reducing poverty, the number of people living in extreme poverty globally remains unacceptably high. And given global growth forecasts, poverty reduction may not be fast enough to reach the target of ending extreme poverty by 2030.

  • According to the most recent estimates, in 2015, 10 per cent of the world’s population lived on less than US$1.90 a day, compared to 11 per cent in 2013. That’s down from nearly 36 per cent in 1990.
  • Nearly 1.1 billion fewer people are living in extreme poverty than in 1990. In 2015, 736 million people lived on less than $1.90 a day, down from 1.85 billion in 1990.

While poverty rates have declined in all regions, progress has been uneven:

  • Two regions, East Asia and Pacific (47 million extreme poor) and Europe and Central Asia (7 million) have reduced extreme poverty to below 3 per cent, achieving the 2030 target.
  • More than half of the extremely poor live in Sub-Saharan Africa. In fact, the number of poor in the region increased by 9 million, with 413 million people living on less than US$1.90 a day in 2015, more than all the other regions combined. If the trend continues, by 2030, nearly 9 out of 10 extreme poor will be in Sub-Saharan Africa.
  • The majority of the global poor live in rural areas are poorly educated, employed in the agricultural sector, and under 18 years of age.

The work to end extreme poverty is far from over, and many challenges remain. The latest projections show that if we continue down a business-as-usual path, the world will not be able to eradicate extreme poverty by 2030. That’s because it is becoming even more difficult to reach those remaining in extreme poverty, who often live in fragile countries and remote areas. Access to good schools, health care, electricity, safe water, and other critical services remains elusive for many people, often determined by socioeconomic status, gender, ethnicity, and geography. Moreover, for those who have been able to move out of poverty, progress is often temporary: Economic shocks, food insecurity and climate change threaten to rob them of their hard-won gains and force them back into poverty. It will be critical to find ways to tackle these issues as we make progress toward 2030.

Credits: Agence France-Presse, 17 October 2018 and The World Bank, 24 September 2018.