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It takes more than just money to escape poverty

Oscar Calvo-González's picture
Members of Wayuu community in the colombian region of Guajira. Jessica Belmont/WorldBank


The other day I asked my five-year-old daughter if she knew what being poor was. She hesitated at first but soon she was on a roll. She mentioned that being poor was not having enough to eat, not living in a “germ-free” house, and – my favorites –  not having gummy bears or a blanket. All this within the first couple of minutes of possibly her first time ever thinking about what being poor meant. The idea of poverty is very intuitive – even for a five-year-old – but equally hard to put boundaries around. It is common to say that poverty doesn’t mean the same thing in different contexts or that it goes beyond monetary dimensions. But what do we mean by that?

Finishing the job of ending poverty in South Asia

Hartwig Schafer's picture
This Bangladeshi woman was born in poverty. With the right kind of education, life in poverty quickly became a story from the past for her. Credit: World Bank

"I have a four-year-old son back in my village. I want to make a better life for him,” says Sharmin Akhtar, a 19-year-old employee in one of Dhaka’s many flourishing garment factories.

Like thousands of other poor women, Sharmin came down to Bangladesh’s capital from her village in the country’s north to seek a better job and create a more prosperous future for her family—leaving behind a life of crushing poverty.

Today, as we mark End Poverty Day 2018, it’s important to note that Sharmin’s heartening story is one of many in Bangladesh and the rest of South Asia, where economic growth has spurred a dramatic decline in extreme poverty in the last 25 years.

And the numbers are striking: In South Asia, the number of extreme poor living on less than $1.90 a day dropped to 216 million people in 2015 from 275 million in 2013 and 536 million in 1990.

Even more remarkable, South Asian countries experienced an increase in incomes among the poorest 40 percent of 2.6 percent a year between 2010-2015, faster than the global average of 1.9 percent.

On a global scale, the highest concentration of poor shifted from South Asia to Sub-Saharan Africa in 2012. And India is likely to be overtaken, if it has not already been, by Nigeria as the country with the most people living in extreme poverty.

It’s worth thinking about how far South Asia has come – but remaining clear-eyed about how far we must go to finish the fight against extreme poverty.

Indeed, it is increasingly clear that poverty is more entrenched and harder to root out in certain areas, particularly in rural areas and in countries burdened by violent conflict and weak institutions.

Estimates for 2015 indicate that India, with 176 million poor people, continued to have the highest number of people in poverty and accounted for nearly a quarter of the global poor.

True, the extreme poverty rate is significantly lower in India relative to the average rate in Sub-Saharan Africa. But because of its large population, India’s total number of poor is still large.

And while there has been a substantial decline in the numbers and rate of people living below $1.90 in South Asia, the number of people living on less than $3.20 has declined by only 8 percent over 1990-2015 because of the growing population.

In 2015, 49 percent of the population of South Asia were living on less than $3.20 a day, and 80 percent were living on less than $5.50 a day.

What’s behind the slowing pace of poverty reduction in Tajikistan?

Alisher Rajabov's picture


Tajikistan achieved high rates of economic growth during the 2000s (about 8% per year, on average), which doubled GDP per capita and helped reduce poverty by almost half between 1999 and 2009. But over the following decade, the rate of poverty reduction began to slow – between 2012 and 2017, poverty fell by about 7.5 percentage points.
 
While employment and growing income levels continued to slowly drive poverty reduction, a fall in the value of remittances in 2014 began weighing on the country’s performance. Since then, the poverty rate has fallen by about just 1 percentage point per year.
 
So, despite continued growth, why has the pace of poverty reduction slowed in Tajikistan?

IDA: On the Frontlines of Ending Extreme Poverty

Axel van Trotsenburg's picture


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.
 
With IDA’s help, hundreds of millions of people have escaped poverty—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.

Blog post of the month: A sidekick for development

Maya Brahmam's picture

Each month People, Spaces, Deliberation shares the blog post that generated the most interest and discussion.
For October 2016, the featured blog post is "A Sidekick for Development" by Maya Brahmam.

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.”

Ending Poverty in China: Small projects bring big benefits

Sitie Wang's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here. 
 

An example of how private corporations can help end poverty in China: Alibaba and the “Internet + Poverty Reduction”

Ruidong Zhang's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here. 

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:
  1. 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;
  2. 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
  3. Infrastructure development for the new economy, including logistics infrastructure, payment systems, financial services, cloud computing and data collection. 
By mid-2016, Alibaba’s Rural Taobao Program established “Internet+” service systems in 18,000 villages in 400 counties (including about 200 poorest counties) in 29 provinces, and recruited more than 20,000 Taobao partners and helpers. In July, Rural Taobao launched its service-based 3.0 model, upgrading partners to rural service providers and village service stations to local service centers, business incubators and public-benefit cultural centers.
Alibaba’s “Internet + Poverty Reduction” features a number of innovations including e-commerce, job creation, access to finance, tourism development, education and healthcare.

Ending Poverty in China: How NGOs can play a role

Wenkui Liu's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here. 
 
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.   
  

Ending poverty in China: The role of knowledge exchange in poverty reduction

Gladys H. Morales's picture
 This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here.
 

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.
 

Ending poverty in China: What explains great poverty reduction and a simultaneous increase in inequality in rural areas?

Guobao Wu's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2030. Read this blog series.
 
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
Sources: China National Bureau of Statistics (2015), Poverty Monitoring Report of Rural China, China Statistics Press; the data for poverty by USD 1.9 per day is from PovcalNet: the online tool for poverty measurement developed by the Development Research Group of the World Bank.


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