Today is “End Poverty Day.” This is an important marker in the fight to end extreme poverty by 2030—a time for us to renew our collective commitment to do more and better to end poverty, and reflect on what the global community has accomplished together.
Since 1960, the International Development Association, IDA, has stood at the frontlines of our work in the poorest countries. IDA investments help spur greater stability and progress around the world by preventing conflict and violence, generating private sector investment, creating jobs and economic growth, preventing the worst effects of climate change, and promoting gender equality and good governance.
—through the creation of jobs, access to schools, health facilities, social safety nets, roads, electricity, and more. Our most recent results show quite simply that IDA works. For example, from 2011-17, IDA helped more than 600 million people receive essential health services, 30 million pregnant women receive prenatal care from a health provider, recruit 8 million teachers, and immunize a quarter of a billion children.
Following a 2009 earthquake in Qingchuan County, Sichuan Province, Alibaba introduced the “Internet + Poverty Reduction” model, with the core concept to boost economic development in the affected areas with a business model that empowers people to move out of poverty using the Internet.
Alibaba announced its rural e-commerce strategy in October 2014, with a plan to invest RMB100 million (about $14.8 million) over the next three to five years in the development of local e-commerce service systems for 1,000 counties with 100,000 villages.
The program provides valuable services in three areas:
- Easy and affordable access to goods and services in poor areas including: delivery of consumer goods to rural areas and farm produce to cities, mobile phone recharge, utility bills payment, booking airline and train tickets, making hotel reservations, as well as microfinance, online medical consultation, and online learning;
- Provision of ecosystem support for sustainable rural development, including raising awareness about the Internet among local officials, building the capacity of local firms to use the Internet for business, Internet skills training for young people and farmers; and
- Infrastructure development for the new economy, including logistics infrastructure, payment systems, financial services, cloud computing and data collection.
Alibaba’s “Internet + Poverty Reduction” features a number of innovations including e-commerce, job creation, access to finance, tourism development, education and healthcare.
China has 128,000 poor villages with 55.75 million registered poor people. There is no one-size-fits-all solution to lift them out of poverty. Typically, people fall into four categories of poverty, requiring different approaches. Unlike some development players, NGOs are more agile and are innovative in solutions, allowing them to provide support sooner.
The first category comprises those who are temporarily incapable of work due to illness or having school-aged children to support. For these people, rehabilitation or bringing back their capability to work to will help reduce their vulnerabilities.
The second category consists of those who have some resources but lack business skills or efficiency. Working with them to develop new business models and use resources more efficiently will help them get out of poverty.
The third category is made up of those who are capable of work but external conditions or resources like jobs are poor. Relocation or employment skills training may be effective solutions.
The fourth category comprises those who are permanently incapacitated, such as the severely disabled. They should be supported by the social protection system.
China has made remarkable progress in poverty reduction by lifting over 700 million people out of poverty in the past three decades. Under sustainable development goal 1, the international community has committed to end poverty in all its forms and everywhere by 2030. An objective that China expects to achieve 10 years earlier of the deadline by lifting the remaining 55 million of extreme poor out of poverty by 2020.
On September 19, China released its national plan for the implementation of the 2030 Agenda for Sustainable Development at the United Nations Headquarters in New York. During his intervention at the event, Premier Li Keqiang confirmed his country’s willingness to participate in international cooperation to contribute to the achievement of the sustainable development goals, to increase investment in South-South cooperation and to share development experiences and opportunities.
Reducing poverty and inequality are two important socioeconomic policy objectives for most countries. While some can kill two birds with one stone, others may achieve either or none of these. In China’s special case, poverty reduction goes together with an increase in income inequality for at least the past 20 years. Here, I address some of the underling factors in this mismatched trajectory.
For quite a long time, economic growth, increase in income inequality and reduction of poverty concurred in China. Since 1980, the country has made remarkable progress in reducing poverty. The head count ratio of poverty by the official poverty line, which is about 21% higher than the line that is set at USD 1.9 per day (2011 PPP), has been reduced by 94% from 1980 to 2015 in rural China (figure 1).
In contrast, the Gini coefficient of income distribution among rural residents in China rose from 0.241 in 1980 to 0.39 in 2011 or by 62% according to the official estimation, though it once declined between 1980 and 1985 and was said to decline slightly after 2012.
Figure 1: Change in Poverty head count ratio and Gini coefficient in rural China since 1980
October 17 was End Poverty Day – and we at the World Bank in Washington had a small celebration and a lively discussion around the new Poverty report: Poverty and Shared Prosperity 2016: Taking on Inequality. Topics ranged from 2 billion people living in countries affected by conflict to the work on social inclusion – which included a two-part definition of social inclusion: “The process of improving the terms for individuals and groups to take part in society” and “The process of improving the ability, opportunity, and dignity of people, disadvantaged on the basis of their identity, to take part in society.”
Then I happened to notice a tweet from Owen Barder on the Sidekick Manifesto (with a cool pop art look) with the apt tagline: In the story of poverty’s end, we can only be sidekicks. I particularly liked the statement: “The poor are not powerless or waiting to be saved.”
It seemed to be a good reminder that economic development is a complex and costly process, which requires political buy-in from a broad range of actors, including the local community. Progress is built over time, and there are no quick wins. In the larger scheme of things, the poor are the main actors, we’re just the sidekicks for development.
On this bright, sunny Saturday, a Moldovan charity held its traditional fall soccer tournament for local and international organizations, businesses, and diplomatic missions. The purpose of the tournament is a noble one – to collect funds for palliative care services to children and adults suffering from incurable and life-limiting illnesses.
And so the World Bank Moldova soccer team turned up, eager to display our dazzling foot work and dribbling skills (OK, a slight exaggeration, I admit!) A handful of injuries and business trips meant a reduced overall capacity, but that did not deter the rest of us from being determined to win.
Share your support today for End Poverty Day, October 17
All day, every day, ending poverty is our collective goal. We all want to make sure that everyone has access to jobs, education, food, protection from violence – the list goes on. A few weeks ago, global leaders and policymakers agreed on 17 Sustainable Development Goals (SDGs or Global Goals). No. 1 is ending poverty. So it seems fortuitous that Oct. 17 is International Day for the Eradication of Poverty – a day dedicated to raising awareness about what each of us can do to solve this global issue.
We’re asking everyone who wants to end poverty to show support. Change your profile pic on your social media channels to one of the eight End Poverty logos below. Share your vision of what must happen for a better world, whether it’s clean water or gender equality. Use the power of social media, using the hashtag #EndPoverty, to invite your family and friends to join the #EndPoverty movement. We have just the one world, let’s make it great.