Syllabus: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Background
- Extreme poverty fell sharply in recent decades due to strong growth in several low-income countries.
- In 1990, 2.3 billion people lived in extreme poverty; the number has since dropped by 1.5 billion.
- Rising incomes enabled millions to escape hunger, gain clean water, access electricity, and improve basic living conditions.
Projected Trends
- Current trends indicate a slowdown in poverty reduction worldwide.
- Extreme poverty is expected to decline only from 831 million (2025) to 793 million (2030).
- After 2030, the total number of extremely poor people is projected to rise again.
Why Past Progress Was Possible
- During the 1990s, the poorest populations lived in countries that later achieved rapid economic growth.
- Nations such as China and Indonesia saw extreme poverty fall from over two-thirds of the population to under 10%.
- Large Asian countries — India, Pakistan, Bangladesh, the Philippines — experienced strong growth and falling poverty.
- Similar gains occurred in Ghana, Cape Verde, Cameroon, Panama, Bolivia, Mexico, and Brazil.
Why Progress Is Stalling Now
- Today, most extremely poor people live in economies experiencing long-term stagnation.
- Madagascar shows no per-capita income growth since 1950, causing poverty to rise with population.
- In countries such as DR Congo, Mozambique, Malawi, Burundi, and CAR, over 50% of people remain extremely poor.
- Low national income levels make redistribution ineffective, as average incomes fall below the poverty line.
Future Outlook
- World Bank projections (Chart 2) show poverty reduction flattening, then reversing post-2030.
- Sub-Saharan Africa will host a growing share of the world’s extreme poor as Asia approaches near-elimination.
Projections highlight that without growth in the poorest economies, extreme poverty will persist for decades.