Extreme poverty

The past two years have dealt a severe blow to global poverty reduction efforts. As if the Covid-19 pandemic was not devastating enough, natural calamities have further aggravated the situation. According to the World Bank, the world’s poor have received one setback after another since 2020 and global poverty is unlikely to reduce in intensity anytime soon. The World Bank considers it the biggest setback in over a decade which will result in an inability to eradicate extreme poverty by 2030. The pandemic that has been raging for over two years – albeit with some reduced casualty rate now – has contributed to a sharp increase in poverty the world over. Estimates show that about 70 million people were pushed into extreme poverty in 2020, making it the worst one-year spike since monitoring began over 30 years ago in 1990. The World Bank report is a damning indictment of the rich who have been unable or unwilling to do much to help those who have been struggling to live on less than $2.15 a day. This is the new global definition of extreme poverty which brings into its fold many who were previously out of this ‘extreme’ condition. That poor nations are being left behind by the rich countries is a sad reality of today’s world that is witnessing unprecedented differences in income levels.

In addition to pandemics and natural disasters, it is also wars of attrition such as in Ukraine that have resulted in rising inflation the world over. The World Bank had earlier warned that as many as 95 million people would fall back into extreme poverty by the end of the year but then the war in Ukraine has further exacerbated the situation. As global growth has come under pressure, the efforts to lift people out of poverty are lagging behind. Those who were already finding it difficult to eke out a meagre living are now on the verge of starvation. Currency depreciations have also played a significant role in inflation of even basic commodities. World Bank President David Malpass has been fairly vocal in his assertions about this impending crisis of extreme poverty especially targeting countries that are undergoing acute economic crunch. Perhaps work on multiple fronts led by the rich and the wealthy can help stem the downward flow of poverty.

It is a known fact now that unless global economic growth picks up, all efforts to eradicate extreme poverty will not bring any substantial results for the rest of the decade. The definition of extreme poverty itself is misleading as it leaves hundreds of millions of poor people out of its fold who may not be suffering from extreme poverty but languishing on the verge of it. For example, if somebody is earning just $2.2 a day they will not be counted as extremely poor, even though this amount is hardly enough for them to survive. While sub-Saharan Africa accounts for nearly 60 per cent of all people in extreme poverty, if you just change the definition of extreme poverty from $2.15 to $2.2 a day, many people from Asia and Latin America would fall in that category. Wealthy countries conveniently have been ducking the question of their responsibility in increasing the poverty rate. They have the resources to cushion the economic blow from the pandemic and other natural disasters, but the same cushion is not available to the poor nations. And that is the crux of the matter: the Global South and developing economies need help and support to get out of the poverty trap – this help must come from the exploitative richer nations around the world.