The end of progress against extreme poverty? - Our World in Data
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In the last decades, the world has made fantastic progress against extreme poverty. In 1990, 2.3 billion people lived in extreme poverty. Since then, the number of extremely poor people has declined by 1.5 billion people.<br>This means on any average day in the last 35 years, about 115,000 people left extreme poverty behind.1 Leaving the very worst poverty behind doesn’t mean a life free of want, but it does mean a big change. Additional income matters most for those who have the least. It means having the chance to leave hunger behind, to gain access to clean water, to access better healthcare, and to have at least some electricity — for light at night and perhaps even to cook and heat.<br>Can we expect this rapid progress to continue?<br>Unfortunately, we cannot. Based on current trends, progress against extreme poverty will come to a halt. As we’ll see, the number of people in extreme poverty is projected to decline, from 831 million people in 2025 to 793 million people in 2030. After 2030, the number of extremely poor people is expected to increase.<br>To understand why the rapid progress against deep poverty will not continue into the future, we need to know why the world made progress in the past.<br>Based on current trends, progress against extreme poverty will come to a halt.<br>Extreme poverty declined in the last three decades because, back in the 1990s, the majority of the poorest people on the planet lived in countries that subsequently achieved very fast economic growth. In Indonesia and China, more than two-thirds of the population lived in extreme poverty. But these economies then grew rapidly, so that by today, the share has declined to less than 10%. Other large Asian countries — including India, Pakistan, Bangladesh, and the Philippines — also achieved strong growth, and as a consequence, the share living in extreme poverty declined rapidly. Much of the progress happened in Asia, but conditions in other regions improved too: the share living in extreme poverty also declined in Ghana, Cape Verde, Cameroon, Panama, Bolivia, Mexico, Brazil, and many other countries.
This chart shows the economic change in these countries over the past decades. As incomes increased, the share of people in extreme poverty declined.
What is different today is that the majority of the world’s poorest people are stuck in economies that have been stagnating for a long time. Consider the case of Madagascar. In the long run, the country has not seen any growth at all: GDP per capita in Madagascar is about the same today as it was in 1950. As a consequence, the number of people in extreme poverty increased in line with the country’s population growth. In richer countries, it is possible to reduce poverty by reducing inequality through redistribution, but a country like Madagascar cannot reduce its share of people in extreme poverty through redistribution. This is because the mean income is lower than the poverty line; if everyone had the same income, everyone would be living in extreme poverty.<br>The situation is similar in other countries, as the chart below shows: in the Democratic Republic of Congo, Mozambique, Malawi, Burundi, and the Central African Republic, more than half of the population lives in extreme poverty. As their economies have stagnated, the deep poverty that most people live in has remained largely unchanged for decades.<br>This is why we have to expect the end of progress against extreme poverty based on current trends. If the poorest economies remain stagnant, hundreds of millions of people will continue to live in extreme poverty.
I’m always skeptical when people say that we are at a juncture in history where the future looks much different than the past. But when it comes to the fight against extreme poverty, I fear it is true. Today, the majority of the world’s poorest people are living in economies that have not achieved economic growth in the recent past.<br>The projection below makes this difference clear: the future we can expect looks very different from the recent past.<br>This chart is based on the latest available projection made by the researchers at the World Bank.2 Up to 2030, this projection is based on the latest growth projections from the World Bank and the IMF. From 2031 onward, poverty projections are based on the average growth rates observed from 2015 to 2024.3
These projections show that we cannot expect a continuation of the strong decline of the past. After 2030, the number of people in extreme poverty is projected to increase.<br>Based on current trends, we have to expect the end of progress against extreme poverty.<br>The chart also shows how the geographic distribution of poverty has shifted. Three decades ago, most extremely poor people lived in Asia; today, most are in Sub-Saharan Africa. In the coming years, this trend is expected to continue. Growth in Asia will largely end extreme poverty in the...