Who’ll be poor in 2030? New calculations from the World Bank

New income poverty projections from the World Bank were launched last week, along with some interesting stats on its two goals – eradicating extreme poverty and shared prosperity.

It was all part of the new 2014 Global Monitoring Report and the more technical new Policy Research Report.

Or if you’d prefer infographics and an overview, then your thing will be the report cards.

Here are the top headlines of the report.

By 2030, under a business-as-usual scenario, 4.9% of the world – and 5.7% of the developing world – will be living in extreme poverty, defined as less than $1.25 per person per day.

That may sound like it’s close to the 3% poverty target the Bank has set – and that there’s not too much more to do to ‘bend the curve’. But  look a little closer, and you’ll see that almost a quarter of sub-Saharan Africa (23.6%) will be left behind living under $1.25 dollar a day – itself not a very ambitious minimum poverty level.

By 2030 more than 400 million people will still experience this extreme level of income poverty. Over 80% of them will be living in sub-Saharan Africa.

(Figures on fragile states were not presented but can be calculated from PovCalNet.)

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Ending poverty?

So the question is, what would it take to eliminate this extreme form of poverty?

The Bank has tested four different scenarios to see how long it would take to lift 1 billion people out of poverty (and reach its 3% target).

The most positive scenario – and the only one that will reach the target – assumes an annual per capita consumption growth of 4% in every country (with inequality remaining constant).

The worst scenario – and a more realistic one – assumes the country-specific growth rates we’ve seen over the past 20 years. It predicts that by 2030, 7% of the world population will still be living in extreme poverty.

The conclusion is clear – the world wouldn’t meet the 3% target unless growth specifically benefits those at the bottom. Call that what you like – “shared prosperity”, “inclusive growth” or “growth with a reduction in inequality”.

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Tackling inequality

There’s a substantive discussion going on about the World Bank’s ‘shared prosperity’ goal, but I’ll leave that for another blog.

For now, let me just say it’s interesting that these reports feel the need to justify some seemingly arbitrary decisions. Like, why has the Bank chosen to focus on the bottom 40% only? And, even more peculiar, why doesn’t it measure inequality directly?

There’s a growing consensus on inequality. The report’s introductory remarks by the Chief Economist are indicative of this, where he focuses on explaining that this ‘shared prosperity’ goal is ultimately about reducing inequality but that they framed it around the bottom 40% to make it “more communicable” (see the video).

The President of the World Bank is now also saying that the aim of these goals is to reduce inequality. We should expect many more technical and policy discussions in the future on whether growth for the bottom 40% is enough and provides the right policy incentives.

Dimensions of poverty

Interestingly, the Global Monitoring Report also looks at shared prosperity in the MDGs but not much on changes over time (despite fantastic work within the Bank on this).

Fortunately, others are working on it including a report on WASH, inequality in child mortality and education by Kevin Watkins, or Save the Children’s Leaving No One Behind report.

It really matters – we shouldn’t assume income growth in its own will automatically deliver improvements in other dimensions of well-being, especially for children.

Invisible children

Finally, it’s unfortunate – to put it mildly – that children remain invisible. There’s not data disaggregated by age group in the report or available to download in PovCalNet.

So we don’t know, for example, how many children will be living in these extreme economic conditions in 2030, or how many children will be left behind. That’s a peculiar gap given that, in 2013 for the very first time, the World Bank disaggregated their poverty figures, finding that “a third of all the poor in the developing world are children 0–12 years, while children are 20% of the non-poor”.

How is child income poverty distributed this year or how will it be in 2030? Well, we just don’t know because these figures aren’t updated.

Meanwhile, the huge damage that child poverty does to young lives and whole societies continues, even if poorly measured.

Fortunately others are working on it elsewhere – see UNICEF’s research on child poverty and this blog post.

 

 

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Comments

  • Simon Wright

    I am really interested in the issue of relative poverty. People may have more than $1.25 a day to spend but still be very disadvantaged by the society they live in. If hope and aspirations are limited because opportunities are restricted to a few and resources are not shared fairly, then that is poverty too. So far the World Bank has not come up with a way of talking about this, and the focus on “absolute poverty” is not enough to judge global change.

  • Ending poverty and share prosperity is posible,the joney required alot of quality from world bank clints first is trust,monitoring &proper supervision of projects&patience,is not all about the money(world bank funds)what is the mind set of a clint,howfar did her/she really know the needs of the people,what are the step to take to help deal with the virus(poverty) that has eaten deep into the mirrow of our people,how do he/she succeed,somany people see govt money as oppurtunity to enrich themself,poverty is seen clearly at rural communities not for one man/woman who dnt no the road to his village carry pen and peper write report on how he or she has eliminated poverty,MDGs projects most of them end their complition on pepers but the sites are coverd by forest,Ending poverty is posible but trust,supervision/monitoring of project should be top most priority,bless u all.

  • Thanks Simon and Emmanuel – Some words on relative poverty and how to best measure poverty in post2015.

    For a synthesis I recommend a very interesting blog by Emma Samman summarising a heated debate by some experts on this topic (Martin Ravallion, Stephan Klasen, Lant Pritchett and Sabina Alkire): http://oxfamblogs.org/fp2p/how-should-a-post-2015-agreement-measure-poverty/

    A few top comments:

    1.- The poverty line £1.25 is far too low for most contexts and fairly unambitious.

    2.- The methodology to set up the PPP poverty line has plenty of challenges has Angust Deaton have discussed extensively. So there are arguments to wait until post2015 to have a proper discussion and revise the methodology. Stephan Klasen’s proposal is an interesting one: http://www.developmentprogress.org/blog/2013/05/23/right-poverty-measure-post-2015-proposal-internationally-coordinated-national

    3.- A single measure is unlikely to capture every component of poverty, so we certainly need more than one indicator. Some monetary measures with a higher threshold (poverty line, for example $2 $4 $10?), some on relative poverty (with respect to the mean), and certainly some that cover other important dimensions of human wellbeing (more multidimensional one such as MPI, MODA and the like)

    4.- How to provide the right incentive for policy makers? As Amartya Sen has masterly argued a monetary measure by its own is unlikely to capture every component related to poverty. The MDGs include an array of indicators in many dimensions, but the $ a day figures become often the headline indicator of progress which unfortunately often provides the wrong incentive to policy makers. Some argue a multidimensional synthetic measure could be add value to communicate the importance of taking actions that provides improvements across the board (in health, education, protection against violence, etc). I found this a compelling argument, see here: http://www.developmentprogress.org/blog/2013/05/29/why-poorest-poor-need-mpi-20

    5.- Finally, there is the question about inequality. Relative poverty is important, but also looking at inequality more broadly. It is important to look at the whole distribution not only the poor, and understand better the relation between growth, inequality and poverty reduction.