One Billion at Risk of Extreme Poverty

Joe DeCapua
March 10,2014

Climbing out of extreme poverty -- and staying there – can be very difficult. A new report warns up to one billion people are at risk of extreme poverty by 2030 unless more is done to support them in hard times.

Unemployment, poor health, high food prices, conflict and natural disasters – these are some of the things that can drive people below the poverty line of $1.25 a day.


The Overseas Development Institute and the Chronic Poverty Advisory Network have released the Third Chronic Poverty Report. Network Director Andrew Shepard -- the lead author -- warns of poverty’s “revolving door.”

“People fall into poverty as well as escape it. And once they’ve escaped it they can fall back in again.”

He said there are three legs of poverty that must be addressed.

“You can be poor the whole of your life, chronically poor. And policies, generally speaking, don’t deal very well with that. You can become poor. You can be impoverished. Policies are beginning to address that a little bit better than they did 10 years ago, but there’s still a long way to go on that, especially in Africa, and actually also in Asia. And then once you escape poverty, you need to keep on in an upward trajectory. You need to keep on moving away from poverty because you can easily fall back in again,” he said.

It’s estimated there were 1.2 billion people in extreme poverty in 2010. That’s a decline of 700 million since 1990. Shepard says that’s good news, but the trend may not continue.

“People who are chronically poor, they’re poor over their lifetimes for reasons and those reasons can be quite hard to tackle. For example, they might be discriminated against. And some countries now have good policies against discrimination, buy many countries don’t yet or they don’t implement them.”

Shepard said that the most frequent cause for falling back below the poverty line is ill health.

The report recommended three approaches to – what it calls -- zero poverty.

“The first of these is providing some sort of cash relief, if you like -- cash transfers or an employment guarantee. Something which provides a safety net. The second thing is a massive investment in education because education works to help people out of poverty – to keep them going in the right direction. And education, of course, works to sustain peoples’ escapes out of poverty provided that you can get them up to a high enough level,” he said.

Primary and secondary education levels are a must, he said.

The third step to reduce poverty is called “pro poorest economic growth.”

Shepard said, “You need jobs, of course. And those jobs can be agricultural, non-agricultural, but jobs also need to be decent. They need to pay some kind of minimum wage. That can be underpinned by an employment guarantee. And you need health and safety provisions.”

The report called on all countries to have universal health coverage and good disaster risk management to deal with the weather extremes of climate change.

It also said international aid “will continue to be extremely important in low-income countries.” However, it adds, “few donors have displayed real interest in tackling chronic poverty.”

“The report does an analysis, which shows that there are about 44 countries which spend a total of less than $500 per person per year. That’s on everything. And the report also indicates that quite a few of those countries – I think it was 19 – won’t be doing very much better by 2030,” he said.

Shepard said countries also can find more money to help tackle poverty by doing a better job of collecting taxes.

He said some of the success stories in reducing poverty in recent years include China, Vietnam, Brazil, Ethiopia, Nepal and Bangladesh.

The issue of chronic poverty is expected to be addressed as the international community decides how to replace the Millennium Development Goals. They come due next year.

Last October, the World Bank reported the number of people living in extreme poverty had declined sharply in the past three decades. But it warned about 400-million children continue to live in “abysmal conditions.”

Bank President Jim Yong Kim said the goal of ending poverty -- and boosting shared prosperity -- can be achieved, but only if nations “work together with new urgency.” Those efforts, he said, must include education and health care for children.