The World Bank report on Poverty says that poverty and inequality have declined after the global financial crisis. Bank’s new report – ‘Poverty and Shared Prosperity’ says that though poverty has come down, high growth is needed to end extreme poverty by 2030.
The Report observes that three countries – China, Indonesia and India were the main actors in reducing global poverty. Progress on reducing absolute poverty was driven by East Asia and Pacific.
The report says that nearly 800 million people lived on less than US $ 1.90 a day in 2013. Half of the world’s poor lives in Sub Saharan Africa and a third in South Asia. East Asia and South Asia were able to reduce poverty significantly. Decrease in poverty in South Asia was driven by growth in India.
India, Nigeria, Bangladesh and China accounts for bulk of the poor people.
“India is by far the country with the largest number of people living under the international US$1.90-aday poverty line, 224 million, more than 2.5 times as many as the 86 million in Nigeria, which has the second-largest population of the poor worldwide. Thus, Sub-Saharan Africa has one in two of the poor worldwide, while India accounts for one in three”
World Bank says that fighting inequality is important to reduce poverty. President Jim Yong Kim highlights growth and inequality reduction to eliminate extreme poverty by 2030.
“Unless we can resume faster global growth and reduce inequality, we risk missing our World Bank target of ending extreme poverty by 2030. The message is clear: to end poverty, we must make growth work for the poorest, and one of the surest ways to do that is to reduce high inequality, especially in those countries where many poor people live”- the President observed.
On inequality, the report brings out a surprising observation. It says that inequality has come down after 1990 and it is clearly visible after the 2008 crisis.
“Contrary to popular belief, inequality between all people in the world has declined consistently since 1990. And even within-country inequality has been falling in many places since 2008—for every country that saw a substantial increase in inequality during this time period, two others saw a similar decrease.”
At the same time, the report warns against the trend of concentrating the wealth at the hand of the very rich.
The Bank put forwards six high-impact strategies for fighting poverty in future. These includes: policies with a proven track record of building poor people’s earnings, improving their access to essential services, and improving their long-term development prospects, without damaging growth. According to the Bank, “these policies work best when paired with strong growth, good macroeconomic management, and well-functioning labor markets that create jobs and enable the poorest to take advantage of those opportunities”.