- 10% of the world’s population is living in extreme poverty (living on less than $1.90 a day).
- This number doubles when considering multidimensional poverty, which includes health, education, and nutrition.
- It’s vital that the world comes together to truly end world poverty, something that could be achieved with a new, scaled financial commitment to development, writes Professor of International Development, Andy Sumner.
Richer countries are currently committed to spending 0.7% of their gross national income (GNI) on international development aid. This target was established by the Pearson Commission in 1969, and approved in a United Nations General Assembly resolution the following year. Countries reached this agreement a half-century ago in a world in which global poverty was at very high levels. At the time, the world was justifiably perceived in binary terms: The North was wealthy, and the South was poor.
Much has changed in the intervening 50 years. Some countries have met the 0.7% target, but many others have yet to do so. Many developing countries experienced rapid economic growth in the 2000s – not only China and India, but also a number of African countries. Although all gains are currently in jeopardy, prior to the pandemic, at least, the world had entered a new era, with fewer low-income countries. At the same time, the higher global ambitions set out in the UN’s Sustainable Development Goals (SDGs), committed countries to end poverty in all its forms by 2030.
A new era needs a new approach. The COVID-19 pandemic makes this need even more urgent. My colleagues and I propose a scaled financial commitment to development, with a twist: it should be universal across all countries, rich and poor.
Before describing the proposal, it is necessary to ask what has changed since the 0.7%-of-GNI target was adopted. During this period, two “new middles” emerged. The first is an increase in the number of middle-income countries – now home to much of the developing world’s population. In many of these countries, aid levels are already low relative to domestic resources and non-public international flows. At the other end of the spectrum, about 30 countries remain “stuck” in terms of growth. These highly aid-dependent states are home to approximately 10% of the population of developing countries – not a “bottom billion,” but a bottom half-billion.
The other “new middle” comprises those who have escaped poverty, but remain vulnerable to falling back into it. This group, as we show, represents more than two-thirds of the developing world’s people.
If measured using the World Bank’s definition of extreme poverty – living on $1.90 or less per day – global poverty has fallen (although the decline is more modest when China is excluded), and income has grown among many of the world’s poorest. Extreme poverty now affects only some 10% of the population in developing countries, down from around 50% 40 years ago.
But poverty remains at startling levels when measured at the World Bank’s poverty thresholds of $3.20 and $5.50 per day. It is sobering to note that every 10 cents added to the poverty line increases the glob