Tackling inequality vital to ending extreme poverty by 2030 – World Bank

A new World Bank study on "Poverty and Shared Prosperity" indicates that extreme poverty worldwide continues to fall despite the lethargic state of the global economy.

But it warned that given projected growth trends, reducing high inequality might be a necessary component to reaching the world’s goal of ending extreme poverty by 2030.

“Inequality reduction increasingly important to continued progress in helping the world’s poorest,” an official statement from the World Bank and copied the Ghana News Agency in Accra said.

It said according to the inaugural edition of “Poverty and Shared Prosperity”, a new series that would report on the latest and most accurate estimates and trends in global poverty and shared prosperity annually, nearly 800 million people lived on less than 1.90 dollars a day in 2013.

This, the statement said, was around 100 million fewer extremely poor people than in 2012.

“Progress on extreme poverty was driven mainly by East Asia and Pacific, especially China and Indonesia, and by India. Half of the world’s extreme poor now live in Sub-Saharan Africa, and another third live in South Asia.

“In 60 out of the 83 countries covered by the new report to track shared prosperity, average incomes went up for people living in the bottom 40 percent of their countries between 2008 and 2013, despite the financial crisis. Importantly, these countries represent 67 percent of the world’s population,” it added.

The statement quoted the World Bank Group President, Jim Yong Kim, saying, “its remarkable that countries have continued to reduce poverty and boost shared prosperity at a time when the global economy is under performing but still far too many people live with far too little”.

“Unless we can resume faster global growth and reduce inequality, we risk missing our World Bank target of ending extreme poverty by 2030. The message is clear: to end poverty, we must make growth work for the poorest, and one of the surest ways to do that is to reduce high inequality, especially in those countries where many poor people live,” he added.

The statement said: “contrary to popular belief, inequality between all people in the world has declined consistently since 1990. And even within-country inequality has been falling in many places since 2008 for every country that saw a substantial increase in inequality during this time period, two others saw a similar decrease. “

It said inequality was still far too high, however, and important concerns remain around the concentration of wealth among those at the top of the income distribution.

“Noting no room for complacency, the reports said in 34 of 83 countries monitored, income gaps widened as incomes grew faster among the wealthiest 60 percent of people than among the bottom 40. And in 23 countries, the bottom 40 saw their incomes actually decline during these years: not just relative to wealthier members of society, but in absolute terms.

“By studying a group of countries including Brazil, Cambodia, Mali, Peru, and Tanzania, which have reduced inequality significantly over recent years, and examining a wide body of available evidence, Bank researchers identified the following six high-impact strategies: policies with a proven track record of building poor people’s earnings, improving their access to essential services, and improving their long-term development prospects, without damaging growth.

“These policies work best when paired with strong growth, good macroeconomic management, and well-functioning labour markets that create jobs and enable the poorest to take advantage of those opportunities,” it added.