Ending Extreme Poverty

The World Bank has embarked on an ambitious target of eliminating extreme poverty by 2030. This means that the World Bank is looking to bring the proportion of people who live below the $1.25 poverty line from 18 percent in 2010 to 3 percent in 2030. Currently, there are about 1 billion people in the world who live below the $1.25 poverty line and a third of them live in India. In fact, around 60 percent of the extreme poor live in just five countries – India, China, Nigeria, Bangladesh and the Democratic Republic of Congo. Thus focusing on reducing extreme poverty will require targeted approach to assist the poor in a few countries.

Although the world made some impressive progress in reducing the proportion of extreme poverty since the 1990s, extreme poverty has actually increased in absolute numbers in Africa. The number of people in extreme poverty has increased from 358 million in 1996 to 415 million in 2011. Some of the reasons given in a Brookings report are: high population growth, high inequality, and mismatch of where growth is happening and where the poor live in Africa. Africa’s reliance on commodity exports also can make it vulnerable to fluctuations in world’s commodity prices. Thus, special focus needs to be placed on Africa to achieve this goal.

Some of the steps that will be promoted by the World Bank to reach this goal are: making the world economy grow faster, invest more in health and education, provide social safety nets to the poor, increase agriculture productivity, build infrastructure and promote trade.

Such large-scale development projects can help to lift millions out of poverty. However, to ensure that the extreme poor permanently leave their extreme poverty status, development institutions and national governments should partner with local NGOs to promote inclusive growth and shared prosperity. Local NGOs can tailor development projects according to the needs of the local regions, and their expertise about local culture and environment can be a valuable resource to development agencies in implementing their goals. 

Development institutions can also promote the use of mobile technology to bridge the communication gap, and to expand mobile banking to the remotest parts of the world. This can increase financial inclusion, which could help the poor in saving and in carrying out transactions. Finally, providing the poor with access to microfinance can help to improve their living conditions.