In October, the World Bank released a new report called Poverty and Shared Prosperity 2016: Taking on Inequality, which provides the latest global poverty figures. This is the first in a series that the organization plans on releasing annually. According to the World Bank, the report is intended to provide “the latest and most accurate estimates and trends in global poverty and shared prosperity.”
Current Global Poverty Figures
The latest data on global poverty from 2013 estimates that 767 million people are living below the international poverty line, which is $1.90 per person per day. While this represented a 1.7% decrease compared to 2012, nearly 800 million people is still an unacceptable number.
World Bank Goals
Determined to drastically lower this number, in April 2013, the World Bank set two goals. The first was to reduce the percentage of people living in extreme poverty worldwide from 10.7% to three percent by 2030. The second goal was to “promote shared prosperity in every country in a sustainable way” by encouraging income growth of the bottom 40% of the population in each country.
The World Bank’s two goals go hand in hand with two of the United Nations’ Sustainable Development Goals (SDGs), which were adopted in September of 2015. SDG 1 is to end poverty in all its forms, and SDG 10 is to reduce inequality within and among countries. Accomplishing the World Bank’s two goals puts the United Nations’ goals within sight.
Poverty and Shared Prosperity
The purpose of the Poverty and Shared Prosperity report is to track the progress of these goals. It will be a resource for identifying solutions that are working, as well as those that are not. Each annual edition of the report will have a focus area, and this year’s theme was inequality. The report offers evidence that reducing income inequality is the key to ultimately bringing an end to extreme poverty.
In an economic simulation using the average global economic growth rate of the last 10 years, the report illustrates how the only scenarios where the World Bank’s goal of reducing extreme poverty is reached are those in which income inequality is reduced; that is “if the incomes of the poorest 40% of people grow faster than average incomes.” This explains why the organization’s second goal is to promote shared prosperity.
Reducing Global Poverty Figures
The Poverty and Shared Prosperity report identifies six areas that future policies should focus on, as they have proven to be effective in countries that have already reduced inequality. These include early childhood development and nutrition, universal health care, universal access to quality education, cash transfers to poor families, rural infrastructure and progressive taxation. In order to reduce global poverty figures, lawmakers should take notice of those policies that have worked in the past as this will lead the way toward ending poverty.
– Kristin Westad