That’s the current goal of the World Bank, and its expected that the United Nations will adopt that same target later this year.
In 1990, the UN’s Millennium Development Goals included a target of halving poverty by 2015. That goal was achieved five years early. In 1990, more than one-third (36 percent) of the world’s population lived in abject poverty; by 2010 the number had been cut in half (18 percent). Today, it is 15 percent.
Extreme poverty is defined as living on less than $1.25 a day. The new goal is to move almost all the world’s population about that line by 2030. Is that even possible?
While the ambitious goal is theoretically achievable, it’ll be difficult. Most of the reduction in poverty since 1990 has been because of the economic growth of India and China. In 1990, 51 percent of the population of India lived in extreme poverty. Today, it is only about 22 percent. Improvements in China have been even more stunning. In 1981, 65 percent of the Chinese population lived in abject poverty. By 2007, the number had been reduced to 4 percent.
Increases in free trade and a shift toward market-oriented economies transformed China and India. Unfortunately, that isn’t as likely to happen in the areas of the world that currently have the highest rates of poverty. Sub-Saharan Africa, for instance, is plagued by corruption, armed conflict, and has become dependent on foreign aid. The result, as the BBC notes, is that sub-Saharan Africa is the only region where the number of poor people has increased during the past three decades. (Although the percentage of the African population living in extreme poverty is slightly lower than in 1981, population growth has caused the total number to double.)
Even if the UN and World Bank target is reached, though, it won’t mean that no one is living in poverty. Just as “frictional unemployment” (about 4 percent) exists when there is full employment, “frictional poverty” (around 3 to 8 percent) will continue even when extreme poverty has been “ended.” That works out to be about 664 million people still living in poverty out of an estimated 8.3 billion people on the planet, notes the BBC.
The idea that extreme poverty could “end” and yet twice the current U.S. population be living on less than $1.25 a day may sound strange. Yet for most of history everyone lived in extreme poverty. Reducing the number to 8 percent of the global population would be an astounding achievement.
Meeting the goal by 2030 will take an unprecedented level of innovation and entrepreneurialism. But if it succeeds, we will be witness to one of humanity’s greatest accomplishments.