The World Bank says the world is unlikely to meet the goal of ending extreme poverty by 2030, according to a new World Bank study.
This is contained in a statement by the World Bank on Thursday.
According to the statement, this is due to absent history-defying rates of economic growth over the remainder of this decade.
It said the study found that COVID-19 dealt the biggest setback to global poverty-reduction efforts since 1990, and the war in Ukraine threatens to make matters worse.
The statement said the bank’s latest Poverty and Shared Prosperity Report provides the first comprehensive look at the global landscape of poverty in the aftermath of the extraordinary series of shocks to the global economy over the past few years.
“It estimates that the pandemic pushed about 70 million people into extreme poverty in 2020, the largest one-year increase since global poverty monitoring began in 1990,” stated the World Bank. “As a result, an estimated 719 million people subsisted on less than $2.15 a day by the end of 2020.’’
The statement added that the new report was the first to provide current and historical data on the new global extreme-poverty line, which had been adjusted upward to $2.15 daily to reflect the latest 2017 purchasing-power-parity data.
“Extreme poverty fell dramatically across the world from 1990 through 2019, the latest year for which official data are available,” it noted. “But progress slowed after 2014, and policymakers now confront a tougher environment: extreme poverty is concentrated in parts of the world where it will be hardest to radical, in Sub-Saharan Africa, in conflict-affected areas and rural areas.’’
According to the report, Sub-Saharan Africa now accounts for 60 per cent of all people in extreme poverty at 389 million, more than any other region, with a poverty rate of about 35 per cent, which is the world’s highest.
“To achieve the 2030 poverty goal, each country in the region would need to achieve per-capita Gross Domestic Product (GDP) growth of nine per cent per year for the remainder of this decade,” it said. “That is an exceptionally high hurdle for countries with per-capita GDP growth averaged 1.2 per cent in the decade before COVID-19.’’
The statement quoted World Bank Group President, David Malpass, saying, “Progress in reducing extreme poverty has essentially halted in tandem with subdued global economic growth. Of concern to our mission is the rise in extreme poverty and decline of shared prosperity brought by inflation, currency depreciations, and broader overlapping crises facing development.”
Mr Malpass added, “It means a grim outlook for billions of people globally. Adjustments of macroeconomic policies are needed to improve the allocation of global capital, foster currency stability, reduce inflation, and restart growth in median income.’’
The bank’s president explained that the alternative was the status quo in many developing countries, which includes slowing global growth, higher interest rates, greater risk aversion, and fragility.
(NAN)
