COVID-19 is threatening to undo decades of progress in alleviating extreme poverty. If we are to get back on track and achieve the UN’s Sustainable Development Goals, social inclusion and inclusive growth must be at the centre of response and recovery plans, writes Arjen Sterk.
We are at a critical point in the world’s quest to eradicate extreme poverty.
The number of people living on less than US$1.90 a day and struggling to fulfil the most basic needs, such as access to health, education, clean water and sanitation, has declined steadily since 1990 – until now.
Research published by the World Bank projects that an additional 150 million people, mostly in Sub-Saharan Africa and Southern Asia, will be pushed into extreme poverty as a result of COVID-19 by the end of 2021.
A new study by the United Nations Development Programme finds that, in an alarming worst-case scenario, we could see 251 million more people driven into extreme poverty by the pandemic, bringing the total number to 1 billion by 2030.
Urgent response and recovery plans are needed to accelerate out of the coronavirus crisis and prevent the rise in the number of people living in extreme poverty.
The situation demands new, more ambitious interventions and renewed commitments towards achieving the UN’s Sustainable Development Goals – and the prerequisite for sustainable development is inclusivity.
Inclusive growth through shared prosperity
A more inclusive approach to development and growth will seek to combine a more prosperous economy with greater equity in society.
Accordingly, we must measure progress and performance in terms of inclusivity, rather than raw growth.
The focus is too narrow with conventional metrics such as gross domestic product. We need to look through a wider, more inclusive lens to understand how economic benefits might be distributed and experienced by different sections of society.
One way to do this is using the concept of shared prosperity, an increasingly important indicator to measure progress on social inclusion and wellbeing.
It is defined as the growth rate in the average income of the poorest 40 per cent of a country’s population. Data from 91 economies for the period 2012-17 shows that positive shared prosperity is correlated with poverty reduction.
The thinking behind shared prosperity is to ensure the benefits of growth are shared by more people, and not only those below the poverty line, but marginalised groups just above it who are often overlooked – the young, older and disabled people, and ethnic minority communities.
This requires us to reimagine the scope and scale of projects.
Poverty-reduction programmes in the world’s least developed countries are mainly targeted at specific cohorts or communities, and at the very poorest nations.
We should look more at the bigger picture, beyond the ‘bottom billion’ poor people, and include those living in middle-income as well as low-income countries. The pandemic has highlighted how poverty persists in even relatively wealthy countries.
It calls for projects in all countries to be more radical and address long-term inequalities, effecting transformative social change that contributes to shared prosperity, inclusive growth, and increased resilience against future shocks.
Meeting the needs of the old and new poor
When developing responses to COVID-19, we need to understand two things about the pandemic: it is not the only reason why poverty is increasing; and it is changing the profile of the poor.
Extreme poverty rates nearly doubled between 2015 and 2018 in the Middle East and North Africa as a result of conflicts in Syria and Yemen.
Meanwhile, new estimates indicate that up to 132 million people may fall into poverty by 2030 due to the effects of climate change.
The people impacted the most by war and most vulnerable to natural disasters, such as flooding and extreme weather, are the chronic poor: predominantly rural groups, children and undereducated adults.
By contrast, there is growing evidence that people forced into poverty by coronavirus differ in that they are more likely to live in congested urban settings, work outside agriculture and be better educated.
The emergence of the ‘new poor’ underlines how poverty is experienced differently by different groups for different reasons.
While there is no uniform panacea to extreme poverty, the social inclusion aspects of sustainable development should be fully integrated into the design and delivery of every project.
If developed from the outset to be inclusive, projects will reflect the different drivers of poverty, and better meet the diverse needs of the poor, be they ‘old’ or ‘new’.
Ultimately, they will be more effective in delivering lasting social outcomes that reduce poverty and improve people’s lives.
Leaving no one behind
Even before the pandemic, the world was off track to end poverty by 2030. Forecasts suggest that most economies will record substantially lower shared prosperity for 2019-21.
Unless global efforts are stepped up in response to coronavirus, conflict and climate change, more people will be poor, and already poor people will be poorer.
It’s more important than ever to remember the key principle underpinning the sustainable development agenda: leave no one behind. It is a human right that applies not just to individuals and communities, but to whole countries.
If we stay true to this aspiration – by implementing development and infrastructure projects with social inclusion and inclusive growth at their heart – we can still turn the tide against extreme poverty.