Paper: GS – II, Subject: International Relation, Topic: Global Issues, Issue: Global Poverty Reduction.
Context:
Global extreme poverty has fallen sharply since 1990, mainly due to rapid Asian growth, but projections show this progress slowing and potentially reversing as poverty becomes concentrated in stagnant Sub-Saharan African economies.
Key Highlights:
Significant Progress Until Now:
- From 1990 to the present, the world has witnessed substantial progress in reducing extreme poverty.
- The number of people living in extreme poverty decreased by 1.5 billion, from 2.3 billion in 1990.
- This progress has allowed many to escape hunger, gain access to clean water, healthcare, and basic amenities like electricity.
Reasons for Past Success:
- The primary driver of poverty reduction was rapid economic growth in countries with large populations of extremely poor people.
- Countries like China and Indonesia experienced significant economic expansion, leading to a sharp decline in the percentage of their populations living in extreme poverty.
- Other Asian countries, such as India, Pakistan, Bangladesh, and the Philippines, also contributed to this trend through strong economic growth.
- Improvements were also observed in various countries across other regions, including Africa and Latin America.
The Looming Stagnation:
- The majority of the world’s poorest people now reside in countries with stagnant economies.
- In countries like Madagascar, GDP per capita has remained virtually unchanged for decades, resulting in a persistent high rate of extreme poverty.
- Redistribution strategies, which can be effective in wealthier nations, are insufficient in these contexts because the average income is below the poverty line.
- Similar conditions prevail in countries such as the Democratic Republic of the Congo, Mozambique, Malawi, Burundi, and the Central African Republic, where a significant portion of the population lives in extreme poverty.
Future Projections of Extreme Poverty:
- The Need for Economic Growth in Poorest Economies: The continuation of progress against extreme poverty hinges on economic growth in the world’s poorest economies. Without such growth, the gains made in recent decades could be reversed, leaving a substantial portion of the global population trapped in extreme poverty.
Global progress against extreme poverty has slowed, with about 800 million still affected. Without sustained economic growth in the poorest, especially African countries, poverty reduction may stall or reverse after 2030.
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