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Fewer People Than Ever Live in Poverty — But the World’s Poorest People Are Still Screwed

The percentage of people living below the poverty line hit single digits for the first time in history, but the milestone isn’t necessarily cause for celebration.

by Kayla Ruble
Oct 7 2015, 11:05am

Imagen por Amr Dalsh/Reuters

The World Bank announced recently that a mere 702 million people — about 9.2 percent of the global population — now live below the poverty line, the first time on record that rates for the most severe level of poverty have dipped into single digits. But while the milestone has been cause for celebration in some quarters, experts caution that the poorest of the world's poor are still basically screwed for the foreseeable future.

The last time the World Bank released similar figures in 2012, there were more than 900 million people living in extreme poverty, which at the time accounted for about 12.8 percent of the world's population. For the latest figures, these levels were calculated using a new poverty line of $1.90 a day that incorporates recent cost of living figures, up from the $1.25 level at 2005 prices.

Announcing the new figures on Sunday, World Bank President Jim Yong Kim attributed the poverty reduction to a combination of economic growth in the developing world and investments in education, health, and so-called "social safety nets."

"These projections show us that we are the first generation in human history that can end extreme poverty,'' Kim said. "This new forecast of poverty falling into the single digits should give us new momentum and help us focus even more clearly on the most effective strategies to end extreme poverty."

Still, the international monetary organization itself acknowledged that eliminating global poverty by 2030 will be a huge challenge, particularly as global growth overall begins to slow. The extreme poverty rate dipped below 10 percent largely due to economic growth in the developing world, which was less affected by the 2008 global financial crisis, according Philip Schellekens, a lead economist at the World Bank who authored an upcoming report on the subject.

'We are the first generation in human history that can end extreme poverty.'

"Extending to 2015, particularly in low income countries, we have seen a period of sustained economic growth despite the economic crisis," Schellekens said. "The significance is the great progress that has been poor people's income growing up over the last [few] years."

As Schellekens explained, GDP growth in the developing world has translated reasonably well to income growth in these countries. Specifically, Asia saw its poverty rates drop about 3 percentage points to 4.1 percent, and the region now accounts for 12 percent of the world's poor compared to about 50 percent in 1990. Sub-Saharan Africa also saw its extreme poverty rates drop from 42 to 35 percent, but that region is now home to half of the world's poorest people.

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In the same way economic growth in recent years has contributed to decline in global poverty rates, less optimistic expectations in the coming years could create challenges for bringing the final 9 percent of the world out from poverty — something Kim pointed out in a statement this week.

"It will be extraordinarily hard, especially in a period of slower global growth, volatile financial markets, conflicts, high youth unemployment, and the growing impact of climate change," the World Bank president said. "But it remains within our grasp, as long as our high aspirations are matched by country-led plans that help the still millions of people living in extreme poverty."

Schellekens pointed out that 700 million extremely poor people living on less than $1.90 a day is still a high number, particularly as those below the poverty line are "deeply poor" and often reside in conflict zones, which makes them more difficult to reach.

Watch the VICE News interview with World Bank President Jim Yong Kim:

"We should probably stop looking at poverty as a zero-one affair," Schellekens said, adding that we need to instead "pay attention to depth of poverty."

An economic slowdown could also end up pushing people who just crept above the poverty line back below it. Anyone hovering just above the $1.90 per day mark has a higher chance of falling back into extreme poverty, according to Laurence Chandy, a fellow at Brookings' Global Economy and Development program.

"There is this very large concentration of people hovering around that line," Chandy said, explaining that most people when they rise above that mark, they aren't suddenly rising to $10 a day. Instead, they just barely make it over the line.

But perhaps the more problematic factor weighing down the fight against extreme poverty is the uneven distribution of poverty both regionally, as well as its concentration in war zones.

"Poverty has improved — if you look at it in an absolute way it has improved and it has improved over the last few decades, but unfortunately it hasn't improved evenly across all regions," Schellekens said.

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As Chandy explained, the figures show where Asia, for example, has succeeded in bringing its poverty rates down, but this has allowed sub-Saharan Africa to lag behind without bringing down the overall worldwide figures.

"It allows the overachievers to compensate for the underachievers," he said. "When you're trying to end something everyone has to end there can be no compensation."

But the biggest problem with trumpeting the single-digit percentage of people living below the poverty line is the fact that most of the progress in poverty reduction has occurred in stable countries, while virtually none has occurred in nations entrenched in war and conflict, according to Chandy. From his perspective, ending poverty will be dependent on reductions in conflict zones.

"The end of poverty goal requires two things [that are] extremely difficult to pull off," he explained. "One, we end conflict in the world. The other option is that we work out how to end poverty in places despite there being conflict on going and that sounds hard too.

"If you think both of those things sound ludicrously optimistic then suddenly the [idea] of ending poverty becomes ludicrously optimistic too," he said.

Follow Kayla Ruble on Twitter: @RubleKB

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