All news
There are many troubles, but only one compromise
The World Bank’s annual Poverty Reduction Report 2024 is titled “Pathways to Multiple Crises” and focuses on “humanity’s complex need to address poverty, inequality, climate change, and more simultaneously, amid geopolitical tensions.” We seek to diagnose “trauma.” Supply is becoming more complex and prices are rising. Despite some progress in reducing extreme poverty, the number of people living on less than $2.50 a day has fallen below 8.5% of the world’s population for the first time (the previous low of 8.8% was reached before COVID-19). Solutions to all three problems are interconnected, costly, and require a series of trade-offs, which the World Bank is demanding.
Escalating interstate conflicts and geopolitical tensions, a loss of momentum in reducing extreme poverty, and a widening gap between countries in reducing inequality as poverty becomes concentrated in the least developed countries prompted the World Bank to prepare its annual thematic report for 2024. We recognize the need for significant trade-offs and adjustments in priorities for social progress.
The report, Pathways to Multiple Crises, shows how the planet’s many crises intersect and explains why tackling poverty, inequality and climate change are separate problems that require complex solutions. It’s a page-long document. In explaining how humanity got into such a predicament, the authors cite the COVID-19 pandemic. It “reversed the downward trend in poverty since the 1990s” as it rose in the poorest countries, which responded worse to the coronavirus and accumulated debt. Because reserves are scarce (see Kommersant, April 15, 2020 and July 20, 2023).
The world has failed to recover from Covid-19 as conflicts in Ukraine and the Middle East have “disrupted food and fuel supplies.” In 2022, the World Bank recorded a global increase in extreme poverty (the number of people living on less than $2.50 a year). 1) This is the first time in 30 years.
This makes the goal of reducing the share of “extremely poor” to 3% of the world’s population by 2030 unachievable. At the current rate, it will take “at least 30 years.” It will take about 100 years to break the poverty line of a middle-income country ($6.85 a day, with half of humanity living below that level).
Adding to this complexity is the need for massive investment in the transition to a green global economy. As a result, “sustainable progress toward one of the three goals (reducing poverty, creating prosperity, and preserving the planet) requires progress toward the others. “Both are important,” the World Bank said. “This will not be easy to achieve in an era of economic populism, rising debt, and an aging global population,” and suggests that without a strong policy framework, progress in one direction may be achieved by: making. Regressing the others. The World Bank report aims to explain “trade-offs that will achieve the best results on all three fronts.”
The author calls the news that the reduction in poverty after Covid-19 has continued into 2024 “significant” news. The share of the poorest people is estimated at 8.5% of the world's population.
The World Bank sees a “cathartic lesson” in the fact that “economic recovery is being neglected where it is needed most.” In the poorest countries, extreme poverty is still 1 percentage point higher than in 2019. The same is true in the fight against inequality. The number of highly stratified countries in 2024 was the lowest in 24 years, down by a third since the turn of the century, but concentrated in Africa, Latin America, and the Caribbean. Home to 1.7 billion people, or 20% of the world’s population.
The World Bank says climate change does not follow this pattern. “Since 2010, the number of people exposed to extreme weather events has increased only in the poorest countries that are members of the International Development Association. Not just in the World Bank Group, but globally.” But the poorest countries suffer the most from climate change. Because of their poverty, their governments can only support half the affected population, compared with full protection in developed countries.
The “trade-offs” outlined in the World Bank report include prioritizing climate resilience financing in sub-Saharan Africa’s poorest countries for long-term sustainable economic growth, but not focusing on prohibitively expensive technologies. To address inequality, their development should be left to developed countries. These investments are expected to provide future income growth for the half of humanity that currently earns less than $6.85 a day. Alternatively, productivity growth without climate technologies would increase global greenhouse gas emissions by 50% above 2019 levels.