Poverty, Prosperity and Planet Report 2024

Why in News?

World Bank has recently released the ‘Poverty, Prosperity and Planet: Pathways out of the Polycrisis’ report.

What is the global poverty situation ?

• Pathways out of the Polycrisis – The report released by World Bank provides the first post-pandemic global assessment of poverty and shared prosperity.

Polycrisis a complex situation where multiple, interconnected crises converge and amplify each other, resulting in a predicament which is difficult to manage or resolve.

• Global Poverty Level - Almost half the global population(44%) – around 3.5 billion people – live today on less than $6.85 per day, the poverty line for upper-middle-income countries.
• Global Extreme Poverty - 8.5% of the global population  (almost 700 million people) live today in extreme poverty, on less than $2.15 per day.

According to World Bank, the people in extreme poverty is who live on less than $2.15 per day.

• Global Poverty Concentration - Extreme poverty in Sub-Saharan Africa and fragile countries is increased.
• In 2024, Sub-Saharan Africa accounted for 16 % of the world’s population, but 67 % (2/3^rd) of the people living in extreme poverty.

• Poverty Level in India - More Indians are living below the poverty line in 2024 than in 1990, primarily driven by ‘population growth’.

Poverty threshold  standard for middle-income countries is  $6.85 (about Rs 576) per day.

• Extreme Poverty in India - 129 mn Indians living in extreme poverty in 2024 down from 431 million in 1990.
• Cessation of Poverty Reduction - Global poverty reduction had slowed to a near standstill, with 2020–2030 set to be a lost decade.
• Poverty Forecast - At the current pace of progress, it would take decades to eradicate extreme poverty and more than a century to lift people above $6.85 per day mark.
• Based on the current trajectory, 622 million people (7.3 % of the global population) are projected to live in extreme poverty in 2030.

Global poverty reduction target is  3 % by 2030.

• Projection for India - India’s contribution to global extreme poverty was projected to decline significantly over the next decade.
  • Extreme poverty rate in India will be 2030 to zero.
• Causes of Stagnant Poverty - Interconnected Crisis  of slow economic growth, conflict and fragility, and climate-related shocks.
• Recommendation - It is critical to promote sustainable investments, mitigate climate risks, and create opportunities that foster inclusive growth.

What is the Global Prosperity Gap ?

• Shared prosperity – It is  a measure of the inclusiveness of growth.
• Global Prosperity Gap – It is a new indicator of shared prosperity used by the World Bank.
• It tracks how far the world is, on average, from a threshold of $25 per person per day with a specific emphasis on the incomes of the poorest.
• Slowdown in Inclusive Growth - Progress in reducing the Prosperity Gap stalled since the pandemic, highlighting a slowdown in inclusive income growth over this period.
• Impact - High inequality can reflect a lack of opportunities for socioeconomic mobility, which can further hinder prospects for inclusive growth and poverty reduction over time.
• Level of Inequality - Around one-fifth of the world’s population lives in countries with high inequality.
• High levels of income or consumption inequality are concentrated among countries in Sub-Saharan Africa and in Latin America and the Caribbean.
• Forecast - At current growth rates, a typical upper-middle-income country will need 100 years to close the Prosperity Gap.
• Recommendation - Faster and more inclusive growth is needed to accelerate progress in achieving shared prosperity.

What are the climate change risk to poverty and inequality reduction?

• Climate Risk - One in five people are at risk of an extreme weather event in their lifetime and  faces severe setbacks in their livelihoods, significantly hindering poverty reduction efforts.

• Increasing threat - People’s risks to climate hazards are expected to increase unless resilience is strengthened and greenhouse gas (GHG) emissions decline.
• Protecting people from extreme weather events requires acting on two fronts
  • Lowering vulnerability by enhancing risk management
  • Preventing the escalation of future climate hazards by accelerating transformations to reduce the emissions intensiveness of growth.
• Trade-offs - Eradicating poverty and boosting shared prosperity requires managing trade-offs between growing incomes and lowering GHG emissions.
• Recommendations
  • Low-income Countries - Prioritize poverty reduction by delivering economic growth and reduce multidimensional poverty.
  • Middle-income countries - Prioritize income growth that reduces vulnerability and synergies to reduce the carbon intensity of growth.
  • Upper-middle- and high-income countries - They account for four-fifths of global GHG emissions.
  • These countries need to act fast in transitioning to low-carbon intense economies while managing transition costs.

What lies ahead?

• Faster and more inclusive growth is needed to accelerate progress in achieving shared prosperity.
• Fostering international cooperation and closing financing gaps for sustainable development is critical to enable the transition toward more sustainable, low-carbon, and resilient economies.
• Achieving a world free of poverty on a liveable planet is possible but requires serious and immediate efforts.

References

1. Business Standard | 129 mn Indians living in extreme poverty in 2024
2. World Bank | Poverty, Prosperity, and Planet Report 2024