Poverty

The World Bank Group’s goals are to end extreme poverty and promote shared prosperity. This mission underpins our analytical, operational, and convening work in about 140 client countries.

For three decades, the number of people living in extreme poverty— defined as those who live on less than $2.15 per person per day at 2017 purchasing power parity—was declining. But the trend was interrupted in 2020, when poverty rose due to the disruption caused by the COVID-19 crisis. The number of people in extreme poverty rose by 70 million to more than 700 million people. The global extreme poverty rate reached 9.3 percent, up from 8.4 percent in 2019.

The world’s poorest people bore the steepest costs of the pandemic. Their income losses were twice as high as the world’s richest, and global inequality rose for the first time in decades. The poorest also faced large setbacks in health and education which, if left unaddressed by policy action, will have lasting consequences for their lifetime income prospects.

The recovery since then has been uneven. Rising food and energy prices—fueled in part by the war in Ukraine and by climate shocks and conflict—have hindered a swift recovery. By the end of 2022, as many as 685 million people could still be living in extreme poverty.

The recent setbacks took place when the speed of progress toward poverty reduction was already slowing, in tandem with subdued global economic growth.

The recent crises have pushed the world further off track from the global goal of ending extreme poverty by 2030. Given current trends, 574 million people—nearly 7 percent of the world’s population—will still be living on less than $2.15 a day in 2030. And the challenge is made harder by the fact that extreme poverty is concentrated in parts of the world where it will be hardest to eradicate: in Sub-Saharan Africa, in conflict-affected areas, and in rural areas.

Last Updated: Nov 30, 2022

The COVID-19 pandemic dealt the biggest setback to global poverty in decades. The economic recovery has been uneven, affected by rising food and energy prices—due to the war in Ukraine and climate change, among other factors—and high indebtedness in many countries. In addition, extreme poverty is now more concentrated in places where it will be hardest to eradicate, including in conflict-affected and rural areas.

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 these 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, is reminding 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: Nov 30, 2022

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