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Can we really end poverty?

29 November 2013
poverty debate

Click to find out more about the debate

Development issues are often shrouded in a fog of jargon – “institutional capacity building”, “accountability”, “concessional lending”. The list goes on (and on and on …). But, occasionally, an idea emerges that is strikingly clear. The latest is this: End extreme poverty by the year 2030.

OK, so there’s one word in there that might need explaining – extreme. To explain, extreme poverty is usually defined as people living on less than $1.25 a day, although it also carries a sense of people lacking the most basic resources in terms of food, shelter, access to healthcare and so on. Understand that, and the fact that perhaps around 1.3 billion people worldwide live on less than $1.25 a day, and the ambition of the goal of eradicating such poverty becomes clear.

Can it be done? Growing numbers of people believe it can, including no less than President Barack Obama who, in his 2013 State of the Union speech, declared that the U.S. would join the effort to end “extreme poverty in the next two decades”.

The idea is also at the core of the latest edition of the OECD’s Development Co-operation Report, which carries the simple subtitle “Ending Poverty”. And it’s the topic of a special debate in London next week, organized by the OECD and Intelligence Squared, where speakers like Homi Kharas of the Brookings Institution and Priyanthi Fernando of Sri Lanka’s Centre for Poverty Analysis will discuss the prospects for, and challenges of, ending extreme poverty (more details below).

Despite the ambitiousness of this goal, the prospects for achieving it look reasonably encouraging. As we’ve noted before on the blog, the long-term trend of extreme poverty is downwards. In 1820, it’s estimated that around 84% of people on the planet were living in extreme poverty. In other words, only around three in 20 people weren’t poor. More recently, it’s now generally believed that the Millennium Development Goal of halving extreme poverty has already been met, ahead of the 2015 deadline (although much of this fall is attributable to large-scale poverty reduction in China).

So what’s to stop us going all the way and finally eradicating extreme poverty, possibly as part of the next round of Millennium Development Goals?

Writing in the upcoming Development Co-operation Report, Andy Sumner of King’s College, London says it’s “entirely feasible” to meet this goal, or come very close, by 2030, but only under the right conditions. One of those conditions is strong economic growth; the other is a fall in income inequality within countries.

That last point is interesting: As we’ve noted before, Andy Sumner has done some fascinating work to explain where exactly the poor live. In the 1990s, this wasn’t an issue: The poor lived in poor countries. Today, the picture is less clear-cut. Around half of the world’s poor live in China and India, both of which are now classed as middle-income countries. What happens in these countries – especially in terms of income distribution – will go a long way to determining the world’s success in eliminating poverty.

But as Andy Sumner also points out, eradicating extreme poverty won’t mean the end of poverty. The $1.25-a-day figure is just one of several poverty indicators, and a very low one at that. “Poverty does not end above one or two dollars a day,” he writes, “the risk of falling into poverty may only diminish when people reach about $10 a day.”

That point is echoed by another contributor to the Development Co-operation Report, Andrew Shepherd of the UK’s Overseas Development Institute, who focuses on the poor living in fragile states. He argues that it’s important not just to help people out of long-term poverty, but to ensure they stay out of it. Doing that, he says, requires bold action, including “unthinkable” steps like providing families with conditional cash transfers and rethinking approaches to agriculture, education, energy and employment. Policy makers, he writes, “must be prepared to borrow ideas and experiences from other societies, and to take some risks on behalf of the poorest.”

Can We Really End Poverty?, an OECD/Intelligence Squared debate, takes place on Thursday 5 December, 2013, at the Royal Institute of British Architects in London. The event is sold out, but you can join the waiting list for tickets by contacting [email protected]. The event will be streamed live starting at 7pm London time (that’s 1900 GMT, 2pm in New York, 8pm in Paris and 4am in Tokyo). You can also follow the run up to the debate on Twitter using the hashtag #PovertyDebate.

Useful links

Development Co-operation Report

OECD Insights: From Aid to Development

3 Responses leave one →
  1. November 29, 2013

    Poverty, disease has a cure. But without substantial means it is impossible to eliminate poverty in Egypt

  2. ESTEBANAGOSTOREID777 permalink
    November 30, 2013

    Yes, extreme poverty can be alleviated, but the entire global community has to work assiduously at this objective, to effectively reduce the high incidences of poverty that currently exists within and among nations! Only a global effort can solve this vexing problem!

  3. Srinivasa Murty permalink
    December 1, 2013

    Poverty eradication is a goal that human society has set itself. No one could undervalue its significance. Governments have plans to eradicate poverty by improving education, health, spending on housing and infrastructure building and also direct money transfers to the needy poor. However, over the past few decades, we have the following experiences in this context.

    1. Certain governments have implemented schemes for promoting low cost housing and mortgage insurances and packaged offering of mortgage holdings to an agency and created another agency to insure the repayments and so on. Finally, the poverty eradication measures have been converted into private businesses where profit is ensured by the state. The taxpayer’s money is indirectly transferred through a circuitous manner to the beneficiary after filling the pockets of the privatized agencies involved.

    2. Certain other governments have attempted to provide low cost housing by directly handling the activity of construction work through public tendering of work contracts. The houses so built have been found to be of very substandard quality with respect to the price paid by government to the contractors. In this case also the beneficiary could get only a fraction of the money paid out of taxpayer’s money.

    3. Certain other governments have implemented welfare measures such as subsidized distribution of food and essential items through public distribution systems that are managed by registered dealers. In such methods of implementation, the delivery system could convey only about 14% to 20% of the total cost incurred by the state, to the recipients.

    4. If a person P earning X amount per day is considered as poor and another person Q earning Y amount per day is considered as not poor and if politicians promised state sponsored aid to the poor which is more than (Y-X). It has lead to various creative ways of corrupt practices. It amounts making P richer by the state than the actively and economically contributing Q.

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