Number of people predicted to be living in extreme poverty by 2030 on the rise – new report

17 September 2019

At least 430 million people are predicted to be living in extreme poverty by 2030, new research from the Overseas Development Institute (ODI) has found – an increase of 7.5% on previous projections.

In a worrying sign that global efforts to reduce extreme poverty are failing, new ODI calculations find that, compared to figures released last year, an additional 30 million people will be living on less than $1.90 a day by the end of the next decade.  

In a new paper, Financing the end of extreme poverty: 2019 update, researchers make clear that extreme poverty could be eradicated if governments in poor countries increased their tax revenues by a quarter and all donors met the UN 0.7 aid spending target.

Lead author Marcus Manuel, senior research associate at ODI, said: ‘We know that extreme poverty could be eliminated but this research shows that without major change hundreds of millions of people will remain living on less than $1.90 a day by 2030.

‘While economic growth will continue to help lift millions of people out of extreme poverty, many are being left behind. This does not have to be the case.

‘The key challenge for countries and donors is whether they are willing to increase their financial effort and better target their spending in order to meet their commitment of ensuring nobody has to live in extreme poverty.’

The paper, published ahead of a key UN summit next week, sets out how investments in education, health nutrition and social protection could end extreme poverty by 2030.  Researchers found that most countries could afford this investment if they maximised tax revenues and better targeted their spending. However, there are still 46 countries that cannot.

These countries face a funding shortfall of $222 billion each year. Almost half of this shortfall could be filled if these countries increased their tax revenues and targeted their spending better.

The other half needs to be financed through additional aid of $131bn a year. However, this is six times the current $22bn of aid provided each year for human development in these countries.

The paper sets out how this could be achieved if all donors the UN target of providing 0.7% of GNI in aid and ensured that at least half of it went to the poorest countries.

Mr Manuel said: ‘Not only are the majority of donors not meeting the 0.7 target, but aid is not being directed towards those countries less able to generate resources through tax.’

The report makes key recommendations for governments and donors to end extreme poverty by 2030.

Governments in the poorest countries should:

  • Increase their tax revenues by a quarter, to the maximum level that is economically feasible
  • Allocate half of their public spending to health, education and social protection, as Ethiopia and Tanzania have come close to doing

Donors should:

  • Ensure all donors meeting the UN target for ODA, following the example of other major donors the UK, Sweden, Norway and Denmark
  • Double the share of collective aid given to the poorest countries from one quarter to a half, following the example of Ireland

Notes to editors

  • The paper ‘Financing the end of extreme poverty: 2019 update’ will be published on Tuesday 17 September
  • The UN’s Sustainable Development Goals Summit will take place in New York on 24 and 25 September
  • Poverty projections based on past economic growth and trends in inequality, using World Bank approach (2014) ‘A measured approach to ending poverty and boosting shared prosperity: concepts, data and the twin goals’ Policy Research Report Washington DC: World Bank
  • Maximum tax figures calculated using IMF and World Bank research that takes into account the economic and structural characteristics that limit a country’s tax potential
  • Share of OECD DAC donor aid to least developed countries has fallen from 33% in 2011 to 26% in 2017 (latest figure)

For more information or to arrange an interview with ODI researchers, contact James Rush on [email protected] or +44 (0)7808 791265

ENDS