World Bank Warns of Stalled Progress in the Fight Against Poverty

 

The World Bank has issued a stark warning about the setbacks in the global fight against poverty, attributing the lack of progress to a combination of wars, rising debt, the climate crisis, and the ongoing impacts of the pandemic. In its latest report, Poverty, Prosperity and Planet, the organization revealed that under current trends, it could take more than 30 years to lift the nearly 700 million people living on less than $2.15 (£1.64) a day out of extreme poverty.

The report highlights that the United Nations' goal of eradicating extreme poverty by 2030 is already unachievable. While global poverty rates fell dramatically from 38% in 1990 to 8.5% in 2024, primarily due to significant economic growth in China, the rate of improvement has stagnated since 2019. It is projected to only decline modestly to 7.3% by 2030.

Extreme poverty continues to be prevalent in countries with historically low economic growth and high levels of instability, particularly in sub-Saharan Africa. Axel van Trotsenburg, the World Bank’s senior managing director, remarked, “After decades of progress, the world is experiencing serious setbacks in the fight against global poverty, driven by interconnected challenges such as slow economic growth, the pandemic, high debt, conflict, fragility, and climate shocks.” He emphasized the need for a "fundamentally new development playbook" to improve the lives and livelihoods of people worldwide and protect the planet.

The report also indicates that achieving a more ambitious target of raising incomes above $6.85 a day, the threshold for upper middle-income countries, would take over a century. Upper middle-income economies are defined as those with annual per capita incomes between $4,466 and $13,845, which includes countries like Argentina, Botswana, and China.

Currently, about 3.5 billion people—nearly half of the global population—live on less than $6.85 a day. The World Bank's findings suggest that population growth has barely changed the number of people living in poverty since 1990. Moreover, progress in reducing inequality has been minimal. Although the number of countries with significant wealth gaps has decreased from 66 to 49 over the last decade, the proportion of people living in countries with high inequality remains at 22%. This inequality is particularly concentrated in regions like Latin America, the Caribbean, and sub-Saharan Africa.

Max Lawson, head of inequality policy at Oxfam, expressed concern over the growing wealth disparity, stating, “With the richest 1% capturing more wealth than the bottom 95%, it is little wonder that it will take a century to end poverty. Rapidly and radically reducing inequality in every country should be the absolute top priority of the World Bank.” He further noted that while ordinary people are facing a "lost decade" that will impact an entire generation, the wealthiest are experiencing unprecedented gains, linking these two trends.

Additionally, the World Bank warned that nearly one in five people globally will likely encounter severe weather shocks that could hinder their recovery. Those most vulnerable, particularly in sub-Saharan Africa, are at significant risk of experiencing detrimental impacts on their well-being due to extreme weather events.