By Victoria Kwakwa, World Bank Vice President for East Asia and Pacific
October 17 is the international day to end poverty. There has been much progress toward this important milestone: the World Bank Group’s latest numbers show that since 1990 nearly 1.1 billion people have escaped extreme poverty. Between 2012 and 2013 alone, around 100 million people moved out of extreme poverty. That’s around a quarter of a million people every day. This is cause for optimism.[restrict]
The role East Asia and Pacific played in this success story is crucial: From 1990 to 2013, the number of extreme poor fell from half of the global total to just 9.3 percent in the region, mostly thanks to China and Indonesia. Income inequality also decreased in most of the region, due in part to reforms undertaken in the 1990s that initially worsened inequality but now are helping to reduce it.
But extreme poverty and the wrenching circumstances that accompany it persist. Worldwide, nearly 800 million people were still living on less than $1.90 a day in 2013, the latest year for which we have global numbers. Half of these people are children. Most have nearly no education. In a world where so many have so much, it is unacceptable that so many have so little.
The international community has laid out a clear vision of what the world looks like in 2030 – it is a world free from extreme poverty, with more opportunity for all. Everyone should have a chance for a better life — and we know it’s possible. This is why the World Bank Group has committed to two clear goals: ending extreme poverty by 2030 and boosting shared prosperity for the poorest 40 percent of people in every country.
But we have much further to go in our fight against extreme poverty and toward better opportunity for the poorest everywhere, and we know that this battle will not be easily won. Our most recent flagship report pointed toward inequality as a persistent barrier to progress — and one that we will have to tackle if we want to achieve our goals.
The global story on inequality is mixed. The gap between all people in the world has been shrinking consistently since 1990, mostly due to populous countries such as China and India catching up to richer countries. And even within countries, inequality has been falling in many countries since 2008—for every country that saw a substantial increase in inequality during this time period, two others saw a similar decrease.
However, inequality is still far too high across the world, and important concerns remain around the concentration of wealth among those at the top of the income distribution—an issue on which we need to know much more. In China, for example, income inequality seems to have peaked, but more can be done to further its recent decline. In Papua New Guinea and Timor-Leste, the income share held by the lowest 20 percent is on the rise, but work needs to continue on this path.
At the World Bank Group, we see three clear ways to achieve these goals. Together with our partners, we can promote sustainable and inclusive economic growth, especially through boosting private investment in infrastructure. Together with our partners, we can invest in human capital starting from a child’s early years, because people with better skills, education, health, and training will make the biggest difference to countries’ ability to grow and compete. And together we can foster resilience to global shocks, including forced displacement, climate change and pandemics, which threaten to roll back our hard-fought development gains.
We cannot rely solely on economic growth to change the situation. A country’s growth must benefit the poorest the most, and unlock opportunities for today’s extreme poor to get better jobs, access better quality services, and lay the foundations for the next generation to escape the confines of extreme deprivation. [/restrict]