World_Bank

The World Bank has released a report showing improving economic conditions for the world’s poor. Income inequality, however, continues to be a threat to progress.

The most recent report on gross national income (GNI) per capita shows the number of countries considered to be “low-income” have been halved over the last 20 years. In 1994, there were 64 low-income nations, whereas today there are 31.

Most of today’s low-income countries can be found in Sub-Saharan Africa. Among the poorest are Central African Republic, the Democratic Republic of the Congo and Malawi. Some countries, including Somalia and Syria, are not included because data is incomplete.

To be considered low-income, a country must have a GNI of $1,045 or less. In the last 20 years, several countries graduated into the $1,046 to $12,736 range of “middle-income.”

At the other end of the spectrum were high-income countries: small, wealthy countries like Qatar, Singapore and Norway.

Gross national income is a common way of measuring the prosperity of a nation. When divided by a country’s population, it yields GNI per capita. The data is based on purchasing power parity and is adjusted for inflation.

The report demonstrates rising economic tides for the world’s poorest countries, largely driven by rapid growth in the last two decades. However, with growth often comes rising inequality.That’s why the World Bank says it will take more than growth to end world poverty.

In a paper released in 2014, the World Bank noted the importance of monitoring income inequality; “In countries with rising income inequality, the effect of growth on poverty has been dampened or even reversed,” the paper reported.

To address this concern, the World Bank recommended social protection programs that protect those left behind by growing economies.

“We need a laser-like focus on making growth more inclusive and targeting more programs to assist the poor directly if we’re going to end extreme poverty,” explained World Bank Group President Jim Yong Kim in a press release.

This echoes a concern held by many development agencies. Jobs alone are not enough to end extreme poverty and economic growth is often unequally distributed, leaving millions behind.

While the results of the latest GNI index are promising, there are still 31 low-income nations remaining. As more countries enter middle-income territory, the needs of those left behind by growth will need to be addressed.

Kevin McLaughlin

Sources: World Bank GNI Index, World Bank Press Release, The Guardian
Photo: The Guardian