Stagnant Progress in Global Poverty Eradication: What are the ways forward?

Achieving prosperity for all would not be possible without tackling the roots of poverty and inequality. For decades, countries have been aiming to elevate people’s welfare, but progress has been significantly dampened by major global events like pandemics and conflicts. In its first integrated report since the COVID-19 pandemic, the World Bank explores current progress, challenges, and opportunities for poverty eradication globally.

Stalled Progress in Poverty Eradication

Poverty limits the window of opportunity for people to thrive in life. It is a structural and multidimensional issue, indicated and influenced by factors such as lack of access to quality healthcare and education.

The efforts to address poverty have been going on for decades, and it has become more urgent now. However, the World Bank’s report reveals stagnant progress between 2019 and 2024. The number of people living on less than $6.85 daily, referring to definitions of poverty adopted in upper-middle-income countries, has remained unchanged since 1990 due to population growth. Beyond that, the report notes the central role of polycrisis in slowing down progress in tackling poverty.

A polycrisis is characterized by multiple and overlapping crises occurring simultaneously, and their interactions amplify the overall impact. Right now, the world is grappling with a climate crisis and geopolitical conflicts, which affect economic growth and people’s overall welfare and wellbeing. 

The compounding impacts of these interconnected crises disproportionately affect low-income countries and their poorest citizens due to their inability to cope with shocks. The report states that around 60–75% of the world’s extremely poor live in Sub-Saharan Africa, where countries are highly vulnerable to climate change and conflicts. 

Pathways for Inclusive Growth and Prosperity

If growth does not accelerate and become more inclusive, it will take decades to eradicate extreme poverty while more people fall through the gaps. The report underscores the importance of tracking average economic growth and inequality gaps within countries. The latter is particularly crucial because a big inequality gap within a country signifies slow economic mobility, which can eventually hinder poverty eradication efforts.

Therefore, countries must take key actions to promote better-functioning labor markets, invest in people’s productivity and capability through education and healthcare, and expand well-targeted social safety nets. These will enable people living in poverty to participate fully in the labor market, thus elevating their income and national economic growth.

Additionally, poverty eradication efforts must also include protecting people from extreme weather events. To a wider extent, it involves addressing the roots of climate change, such as greenhouse gas emissions, to prevent further damage. Eventually, policymakers must find a way to scale up synergistic policies to help advance and accommodate all aspects above.

Priority Actions

Poverty eradication is a global mission, which means that countries worldwide share responsibility for achieving it. As contexts and conditions vary between countries, governments and policymakers must set their priorities straight to find effective and inclusive solutions to this long-standing issue. 

The World Bank’s report provides a guideline for country-specific actions to tackle poverty from a global perspective:

• Low-income and fragile countries need to prioritize poverty reduction by fostering investment in human, physical, and financial capital. To achieve inclusive economic growth and maximum impact on poverty reduction, these countries must create employment opportunities while ensuring that people living in poverty can take advantage of those opportunities through education and health.
• Middle-income countries must prioritize income growth that reduces vulnerability and pursue synergistic actions. While working towards inclusive economic growth, middle-income countries must also reduce their carbon emissions. This will require identifying synergistic policies that can contribute to and scale up all goals.
• High-income and upper-middle-income countries with high emissions must accelerate mitigation to advance the interlinked goals globally while managing transition costs. By ramping up efforts to reduce emissions and implement energy transition, these countries can significantly alter future environmental risks worldwide.

Ultimately, we need everyone’s hands to push progress forward, especially goverments, which bear the brunt of responsibilities for their people. Achieving prosperity for all means opening the door for everyone to create a good life for themselves, without leaving anyone behind.

Read the report here.

Editor: Nazalea Kusuma