Making strides

  • Perhaps the SDG aim to end poverty by 2030 is unattainable, but great strides can still be made toward poverty reduction
- Pratistha Koirala

Sep 24, 2017-

With the adoption of Sustainable Development Goals (SDG), the world’s countries aim to end poverty by 2030. Extreme poverty rates have been cut by more than half since 1990. While this is a remarkable achievement, one in five people in developing regions still live on less than $1.25 a day, and there are millions more who make little more than this daily amount, plus many people still risk sliding back into poverty. 

Poverty is understood as more than just a lack of income and resources to ensure a sustainable livelihood. Its indices are not only monetary, they also include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion as well as the lack of participation in decision making. About one in five people in developing regions lives on less than $1.25 a day.

The global poor

In this scenario, SDG 1 targets the eradication of extreme poverty for all people everywhere, which is currently measured as people living on less than $1.25 a day. By 2030, the target is to halve the number of men, women and children living in extreme poverty. Accordingly, all countries, and in particular least developed countries, are to implement programs and policies to end poverty in all its dimensions. They also have to create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies to support accelerated investment in poverty eradication actions.

According to the World Bank, an extremely poor person lives on less than $1.25 a day in 2005 purchasing power parity (PPP) adjusted international dollars. Poverty reduction at the $1.25-per-day line has been rapid over the last two decades, at least in relative terms. Extreme poverty rates in the developing world fell by about one percentage point per year. While about 43 percent of the people in the developing world were “poor” in 1990, this rate had fallen to around 20 percent by 2010. So, does this reflect the ending of poverty? 

Facts presented by various papers and experts in the past could be a point of optimism supporting the idea that poverty will actually end by 2030. But there are always two sides of a coin, so let me put forward both perspectives. First, if we ignore progress in China and India, then the rest of the developing world lifted only about 150 million people out of poverty between 1990 and 2012. In fact, there are 120 million more poor people in Sub-Saharan Africa today than in 1990. Second, if per capita consumption in the entire developing world would grow at about 4.5 percent per year, the new target could be reached. But this is unlikely to happen for a number of reasons. Much of world poverty is now concentrated in Sub-Saharan Africa and South Asia.

Richard Bluhm, in his paper Can we end poverty by 2030?, claimed that while consumption growth in Sub-Saharan Africa has been faster since 2000 than in the 1980s and 1990s, it still lags behind growth in other developing countries. And though per capita consumption in the developing world rose by about 4.5 percent per year from 2000 to 2010, it grew by only about 2.4 percent per year in Sub-Saharan Africa (with poverty increasingly concentrated in fragile states). It can hence be derived from his analysis that maintaining the current pace of poverty reduction requires ever-faster growth in countries that have yet to show that they can grow quickly for a sustained period of time and not lose those gains in the next crisis.

Nepali scenario

My generation has grown up learning that Nepal is one of the poorest countries in the world. Almost 30 years have passed since I was a kid, and the scenario has not changed. Our children today are taught the same thing. According to the International Monetary Fund World Economic Outlook, Nepal currently ranks in the 18th position among the poorest counties in the world, with GDP per capita less than $750. Our National Planning Commission’s Sustainable Development Goal baseline draft report clearly states that Nepal intends to graduate from the LDC status to a developing country by 2022 and further to a middle income country by 2030. 

So what can we expect regarding SDG 1? A recent United Nations merit working paper suggests that about 8 to 9 percent of the developing world’s population will still be poor in 2030, even under very optimistic growth assumptions. In the context of Nepal a recent study by Save the Children has stated that Nepal cannot achieve elimination of poverty even by the year 2112. 

Reviewing the past data of poverty reduction shows that the aim of poverty elimination is something unachievable, however reducing poverty is real. Poverty elimination is an abstract goal. The National Planning Commission Nepal is determined to eradicate poverty by commencing a two-pronged strategy—putting credible macroeconomic policies in place for higher economic growth and affecting distribution of income through policy interventions in the labor market along with expanding social protection. Unlocking the economic growth potential requires that enabling fiscal, monetary, external trade, investment and labor market policies are in place, and are providing an environment for private investment—domestic and foreign.

There is more to SDG 1 than can be discussed here. In the context of reducing poverty, the UN and international community want to expand access to social protection, ensure equal access to economic resources, and much more.

There is nothing wrong with setting very ambitious goals, but we can only hope policymakers realise that achieving these goals requires a large concentration of development efforts on the African and of course Asian region. Without strong growth that benefits the poor more than the rest, many people in poverty laden countries are still likely to be left behind.

The benefit is that extreme poverty will be much less evident in the rest of the developing world by 2030. But as the outcomes of Millennium Development Goals suggest, even with global goals in place in 15 years, more than 1 billion people will still be living on less than $2 a day. So while 2030 will not mark the end of poverty on any sensible measure, we have the potential to make great strides until then. The question still remains whether the “great generation”, in Mandela’s words, will successfully overcome the challenge of ending the “most awful offence against humanity” that extreme poverty represents. 

- Koirala is a Development Advocacy Coordinator for World Vision International

Published: 24-09-2017 08:13

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