Global Extreme Poverty: A Reversal of Progress

At the turn of the millennium, approximately 2.2 billion people worldwide lived in extreme poverty, defined as surviving on less than $3 per day (adjusted for today’s monetary value). Remarkably, over the subsequent two decades, this number more than halved, largely due to economic growth in East and South Asia. But, this progress is now facing a significant threat, with projections indicating a potential reversal of these gains.

The Decline and Disparities

The substantial reduction in global extreme poverty between 2000 and 2020 was primarily driven by rising incomes and targeted poverty alleviation programs in East and South Asia. However, Sub-Saharan Africa experienced a different trajectory. While the share of the population living in extreme poverty decreased, the total number of people in this condition actually increased during the same period.

A Looming Reversal

Recent projections from the World Bank suggest that the decline in global extreme poverty is likely to stall, and may even reverse. Estimates indicate that the number of people living in extreme poverty in 2040 could be higher than it is today. This concerning forecast is largely attributed to the fact that a significant proportion of the world’s extremely poor reside in countries with economies that have experienced limited growth.

The Role of Economic Growth

If countries with stagnant economies do not achieve substantial economic growth, the world could see nearly one billion people living in dire poverty for decades to come. These projections are based on the latest growth forecasts from the World Bank and the International Monetary Fund (IMF). Specifically, poverty projections from 2031 onward are based on average growth rates observed between 2015 and 2024.

Regional Definitions

Understanding regional classifications is crucial when interpreting poverty statistics. The World Bank defines seven world regions: East Asia and Pacific, Europe and Central Asia, Latin America and Caribbean, Middle East, North Africa, Afghanistan and Pakistan, North America, South Asia, and Sub-Saharan Africa . The United Nations Statistics Division (UNSD) also provides a geoscheme dividing the world into six continental regions and 22 geographical subregions . These definitions can vary between organizations, impacting data analysis.

Further Reading

For a more in-depth analysis of this issue, refer to Max Roser’s article, “The end of progress against extreme poverty?”