Status quo won’t end extreme poverty by 2030, think tank says

A man and his son eke out a living picking through garbage in Honduras. AP

At the current pace, the elimination of extreme poverty will not happen by 2030. Somewhere between 200 million and 600 million people will make less than $1.25 per day (the income line used to determine extreme poverty) in 15 years. And that is assuming that the world’s poorest countries will continue to experience the same levels of economic growth seen today.

The goal to eliminate extreme poverty, set forward by leaders from U.K. Prime Minister David Cameron to World Bank President Jim Kim, is only possible if the way development is done changes, according to a report from the U.K.-based think tank the Overseas Development Institute.

The report says that the key to changing the way development is done starts with providing enough money to finance basic social services including health care, education and income support. Achieving the goals of universal access to education and health, plus social protection, will cost $73 billion in extra financing per year for poor countries, the report says.

To put that big number in context, $73 billion represents 5 percent of total global military spending each year. The message from the report is simple, global investments in the world’s poorest countries can help make extreme poverty a problem of the past.

“Aid isn’t the answer to eradicating poverty – but it is an incredibly important part of the solution. Without more aid delivered in the right way, in the right places, the goal of eradicating poverty will be out of reach,” said Paddy Carter, co-lead author of the report, Financing the Future.

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One difference set forth is that leaders should stop looking to donors like the United States, instead they should appeal to the low- and middle-income countries that are trying to eliminate extreme poverty within their own borders. If taxes are collected with half of resources spent on the social sector, these countries could contribute nearly half of the $148 billion needed each year. By aligning the spending priorities of donors and developing countries, the ambitious goal to end extreme poverty is suddenly possible.

All of this comes ahead of July’s Financing for Development conference in Addis Ababa, Ethiopia. While the September U.N. meetings about the Sustainable Development Goals get a lot of buzz, it is the funding meeting that precedes the September meetings that will help determine the finance commitment of every country.

The main recommendations build on already-accepted ideals – a need for universal health coverage and universal primary and secondary education. The report recommends that the Global Fund to Fight AIDS, TB and Malaria should transition to a Global Fund for Health in order to serve as the “vehicle for the acceleration of progress towards universal health coverage.” On education, roughly half of all are children out of school because of conflict and humanitarian emergencies. A fund dedicated to supporting education during a humanitarian emergency can help address the problem, the authors say.

And the final recommendation is one that is building a bit of momentum based on increasing evidence that it works. Countries need to implement social protection programs for the poorest people. Giving money directly to the poor, as seen in Mexico, Kenya and Brazil, can help people escape poverty. Donors can help fund a global plan that provides social protection to people in countries where governments may have trouble delivering support.

Together, investing in the three areas would spur on prosperity. But that is not enough. The poorest countries have to be the primary targets so they to not fall further behind.

“The international community must be involved, at scale, in every low-income fragile state, and take a long-term perspective,” the report says.

And maybe, just maybe, there could be an end to extreme poverty in the next generation. But as report co-author Chris Hoy said, that does not mean the finish line will be crossed.

“While eliminating extreme poverty by 2030 would be an amazing milestone for humanity, it is important to keep in mind that development doesn’t stop there. The extreme poverty definition only provides a very limited snapshot of people’s standard of living through the lens of changes in consumption,” wrote Hoy in the DevPolicy blog.

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.