Poverty

Almost 700 million people around the world live today in extreme poverty – they subsist on less than $2.15 per day, the extreme poverty line. Just over half of these people live in Sub-Saharan Africa. 

After several decades of continuous global poverty reduction, a period of significant crises and shocks resulted in around three years of lost progress between 2020-2022. Low-income countries, which saw poverty increase during this period, have not yet recovered and are not closing the gap. 

At the mid-point of the SDGs, the world is off track. At current rates of progress, the world will likely not meet the global goal of ending extreme poverty by 2030, with estimates indicating nearly 600 million people will still be struggling in extreme poverty by then. 

Extreme poverty is concentrated in places where it will be hardest to eradicate—parts of Sub-Saharan Africa, conflict-affected areas, and in rural areas. The outlook is also grim for almost half of the world’s population, which lives on less than $6.85 a day – the measure used for upper-middle-income countries. 

Children are more than twice as likely as adults to live in extreme poverty. They comprise more than half of those living in extreme poverty, yet their share of the total population is just 31 percent.   

It is critical to tackle poverty in all its dimensions. Countries cannot adequately address poverty and inequality without also improving people’s well-being, including through more equitable access to health, education and basic infrastructure. 

Inequality remains unacceptably high around the world. 2020 was a turning point, when global inequality rose for the first time in decades, as the poorest people bore the steepest costs of the pandemic. Income losses of the world’s poorest were twice as high as the richest. The poorest also faced large setbacks in health and education which, if left unaddressed by policy action, will have lasting consequences for their future income prospects. 

Inequalities of income, education, and opportunity are all interconnected and must be addressed together. Reducing inequalities of opportunity and of incomes among individuals, populations, and regions can foster social cohesion and boost general well-being.  

Policymakers must intensify efforts to grow their economies, while protecting the most vulnerable. Jobs and employment are the surest way to reduce poverty and inequality. Impact is further multiplied in communities and across generations if we purposefully empower women and girls, and young people. 

Last Updated: Oct 17, 2023

Strategies to reach the least well-off must be tailored to each country’s context, considering the latest data and analysis, and the needs of the population. How the world responds to major challenges today will have a direct bearing on whether the current reversals in global poverty reduction can be turned around.

The World Bank provides recommendations for a complementary two-track approach: responding effectively to the urgent crisis in the short run, while continuing to focus on foundational development problems, including conflict and climate change.

Closing the gaps between policy aspiration and attainment

Too often, there is a wide gap between policies as articulated and their attainment in practice—between what citizens rightfully expect, and what they experience daily. Policy aspirations can be laudable, but there is likely to be considerable variation in the extent to which they can be realized, and in which groups benefit from them. For example, at the local level, those who have the least influence in a community might not be able to access basic services. It is critical to forge implementation strategies that can rapidly and flexibly respond to close the gaps.

Enhancing learning, improving data

From information gathered in household surveys to pixels captured by satellite images, data can inform policies and spur economic activity, serving as a powerful weapon in the fight against poverty. More data is available today than ever before, yet its value is largely untapped. Data is also a double-edged sword, requiring a social contract that builds trust by protecting people against misuse and harm, and works toward equal access and representation.

Investing in preparedness and prevention

The COVID-19 pandemic demonstrated that years of progress in reducing poverty can quickly disappear when a crisis strikes. Prevention measures often have low political payoff, with little credit given for disasters averted. Over time, populations with no lived experience of calamity can become complacent, presuming that such risks have been eliminated or can readily be addressed if they happen. COVID-19, together with climate change and enduring conflicts, reminds us of the importance of investing in preparedness and prevention measures comprehensively and proactively.

Expanding cooperation and coordination

Contributing to and maintaining public goods require extensive cooperation and coordination. This is crucial for promoting widespread learning and improving the data-driven foundations of policymaking. It is also important for forming a sense of shared solidarity during crises and ensuring that the difficult policy choices by officials are both trusted and trustworthy.

Overall, with more than 60 percent of the world’s extreme poor living in middle-income countries, we cannot focus solely on low-income countries if we want to end extreme poverty. We need to focus on the poorest people, regardless of where they live, and work with countries at all income levels to invest in their well-being and their future.

The goal to end extreme poverty works hand in hand with the World Bank Group’s goal to promote shared prosperity, focused on increasing income growth among the bottom 40 percent in every country. Boosting shared prosperity broadly translates into improving the welfare of the least well-off in each country and includes a strong emphasis on tackling persistent inequalities that keep people in poverty from generation to generation.

Our work at the World Bank Group is based on strong country-led programs to improve living conditions—to drive growth, raise median incomes, create jobs, fully incorporate women and young people into economies, address environmental and climate challenges, and support stronger, more stable economies for everyone.

We continue to work closely with countries to help them find the best ways to improve the lives of their least advantaged citizens.

Last Updated: Oct 17, 2023

The World Bank Group works to end poverty in several ways:

• Funding projects that can have transformational impacts on communities.
• Collecting and analyzing the critical data and evidence needed to target these programs to reach the poorest and most vulnerable.
• Helping governments create more inclusive, effective policies that can benefit entire populations and lay the groundwork for prosperity for future generations. 

Some examples:

• Cambodia has achieved remarkable progress in reducing poverty and boosting shared prosperity, but key reforms are needed to sustain pro-poor growth. The World Bank is supporting Cambodia to help address the country’s challenges of limited economic diversification, rapidly increasing urbanization, human capital deficiencies, and infrastructure gaps.

• Mexico has experienced high income inequality and concentration of poverty in a few states. The World Bank Group has supported Mexico’s efforts to develop a more inclusive, effective, and integrated social protection system including relaunching a conditional cash transfer program to help improve access to higher education and formal employment.

• In one of India’s poorest states, Bihar, a program financed by the World Bank has transformed livelihoods by mobilizing almost 10 million rural women into self-help groups and granting them access to finance and markets to start and expand their businesses.

• A pilot program in Ecuador used text messages to relay information and encouragement to caregivers in an impoverished region of the country and saw a significant improvement in the nutrition and health of children.

• Since 2007, a team of experts from the World Bank has been helping Kenya strengthen statistical capacity by reshaping its National Bureau of Statistics. With World Bank’s support, the bureau implemented a range of surveys to update key indicators of official statistics and improved the data ecosystem. The project is funded by $50 million from the World Bank’s International Development Association (IDA).

• In-depth maps in countries such as Afghanistan, Bangladesh, Croatia, Republic of Serbia, and Vietnam show where economic diversity and gaps in services exist within a country. This, as part of the poverty assessment process, helps policymakers better target policies and programs to reach and benefit the poor.

• Yemen’s high malnutrition rates have drawn global attention, highlighting the impact the country’s five-and-half-year civil war has had on its population. The Emergency Crisis Response Project gives pregnant women and women with children under the age of five money to buy food and teaches them about child nutrition. It has been able to reach more than 165,000 pregnant or lactating women and 175,000 children so far.

• Conflict-affected communities in Mindanao are among the poorest in the Philippines, suffering from poor infrastructure and lack of basic services. The World Bank along with other partners have aimed to enhance access to services and economic opportunities and build social cohesion. These projects have help build water systems, community centers, sanitation facilities, access roads, post-harvest facilities, and farming and fishing equipment, benefiting 650,000 people in 284 villages in a decade.

• An innovative series of rapid survey methodologies were pioneered in Somalia, one of the poorest countries in Sub-Saharan Africa. The surveys overcame significant security and implementation obstacles to yield the most comprehensive analysis of the welfare of the Somali people in decades and is now being used in other countries. 

Last Updated: Nov 30, 2022