Today is the International Day for the Eradication of Poverty – it’s hard to think of any occasion that is more bitter-sweet. To mark it ODI is launching three publications suggesting ways to speed up our progress to a world without extreme poverty.
Extraordinary strides have been made in reducing the proportion of poor people around the world. Extreme poverty incidence has fallen below 10% of people globally for the first time in history – progress that was unthinkable 25 years ago. But there are two serious spoilers.
Changing demographics
Firstly, demographic trends in the poorest parts of the world mean that hundreds of millions more people risk being born into poverty and staying there unless the right policies are financed and put in place today.
A new ODI paper published today illustrates the tremendous power of demography as a driver of change. It draws on evidence that over half of the increase in the world’s population to 2050 will be in Africa, along with over one-third of global births. In 2050, on average, there will be about 1.6 times as many under-fives in sub-Saharan Africa (SSA) as there were in 2015. If this population growth takes place in the absence of improvements in education, skills and job creation, already-low incomes could fall, and marginalised young people could provoke social dislocation and political destabilisation.
However, effective human development investments for the younger generation could produce powerful multiplier effects that generate returns over time. If policies can target the most disadvantaged groups within countries, the potential gains are higher still.
As the paper highlights, the prospect of 90 million new labour market entrants by 2030 is one that finance ministers and planners across SSA should take seriously; their productive employment will be key to converting a youth bulge into a demographic dividend. It is estimated that 18 million high-productivity jobs will be needed each year in SSA through 2035 to absorb the influx, around six times the number that are currently created in the continent each year.
Millions of people have seen little improvement in their lives
Secondly, a 10% incidence of extreme poverty worldwide is far too high. While progress in poverty reduction needs to be recognised, it must not overshadow the enduring daily reality faced by the millions of people who have seen little improvement in their lives.
Leave no one behind – a new approach in policy-making
As well as policies to turn the demographic bulge into a dividend, a new approach in policy-making is needed – and countries have already signed up for this.
‘Leave no one behind’ is a vital approach for policy-makers at the coal-face of confronting the challenge of current – and future – poverty and inequality. Alongside our demography paper, we’re also launching two publications that set out with crystal-clarity what the concept entails and why it’s so important.
Our definitions paper gives a succinct overview of what the approach means, with its radical razor-like focus on putting the worst-off first – a concept borrowed from the health sector where it is known as progressive universalism. If instead, policy is implemented among better-off groups first and worst-off groups later, the existing gap between them is likely to increase.
The paper also makes the point that ‘leave no one behind’ goes well beyond an anti-discrimination agenda; it is a recognition that expectations of trickle-down progress are naïve. As ‘10 things to know on leave no one behind’ illustrates, explicit laws and policies – as well as universal ones – targeted at the worst-off (in all senses of the term) will be needed.
For instance, achieving universal birth registration in South Asia by 2030 would require three times more progress among the poorest households, compared with the wealthiest. It may be that the left behind are the most expensive to reach. However, such investments may also deliver the best value for money. A recent UNICEF report shows that investments that increase access to high-impact health and nutrition interventions by poor groups cost 1.5 times more than those to non-poor groups, but they saved almost twice as many lives.
The kinds of shifting demographics highlighted above have been estimated to account for around one-third of East Asia’s ‘economic miracle’. In the case of sub-Saharan Africa, one estimate puts the potential benefit of a demographic transition at $500 billion annually, or around one-third of regional gross domestic product (GDP), while International Monetary Fund estimates suggest that GDP per head could be between 25% and 50% higher by 2050 if supportive policies are put in place.
In other words, governments cannot afford to leave people suffering in extreme poverty. We know the policies and approaches needed to reach them. Now governments will need to act fast, and intentionally, to end extreme poverty.
