The upcoming semi-annual IMF/World Bank meetings will no doubt be calling attention to a slew of recent reports that suggest that we are winning the war on global poverty. The latest, from the Oxford Poverty and Human Development Initiative, found that a multi-dimensional index of widespread poverty declined significantly in 18 of 22 developing countries, which contain over two billion people. This is good news for the World Bank President, Jim Yong Kim, who declared just a year ago, that the world could end poverty by 2030, if the right mix of development and aid policies is adopted by the international community.
However, as I pointed out in a policy paper, also written for the World Bank, the renewed optimism over “ending” global poverty will be short-lived, unless the world is prepared to address an important, and seemingly intractable, “hidden” dimension to this problem.
Since 1950, the estimated population in developing economies on “fragile lands” has doubled. These fragile environments are prone to land degradation, and consist of upland areas, forest systems and drylands that suffer from low agricultural productivity, and areas that present significant constraints for intensive agriculture. Today, nearly 1.3 billion people – almost a fifth of the world’s population – live in such areas in low and middle income economies. Almost half of the people in these fragile environments (631 million) consist of the rural poor, who throughout the developing world outnumber the poor living on favored lands by 2 to 1.
In addition, around 430 million people in developing countries live in remote rural areas. These are locations with poor market access, requiring five or more hours to reach a market town of 5,000 or more. Of the rural populations in such remote regions, nearly half are found in less favored areas, which are semi and semi-arid regions characterized by frequent moisture stress that limits agricultural production. Again, people in remote rural regions tend to be some of the poorest in the developing world.
To put these numbers in perspective, the total population in the richest countries of the world is around 850 million. In contrast, as noted above, 1.3 billion people in the fragile environments in developing countries, and 430 million people inhabit remote rural areas.
The clustering of rural populations in less-favored areas and fragile environments is also likely to continue into the foreseeable future, given current rural population and poverty trends in developing economies. Although from 1981 to 2005 the number of extreme poor globally declined from 1.9 billion to 1.4 billion, current development policies are not winning the war on poverty in the rural areas of low and middle income countries. First, despite rapid global urbanization, the rural population of developing regions continues to grow, at just over 1.0% per year in recent decades. Second, around three-quarters of the developing world’s poor still live in rural areas, even allowing for the higher cost of living facing the poor in urban areas. In general, about twice as many poor people live in rural than in urban areas in the developing world. As a consequence, rural populations in poor countries are growing, rural poverty is endemic, and substantial spatial poverty traps are widespread.
Overcoming such spatial poverty traps and alleviating rural poverty in many developing economies will therefore require a much more robust strategy than current global economic development efforts. Specific policies need to be targeted at the poor where they live, especially the rural poor clustered in fragile environments and remote areas. This will require involving the poor in these areas in payment for ecosystem services, targeting investments directly to the rural poor, reducing their dependence on exploiting environmental resources, and tackling their lack of access to affordable credit, insurance, land, and transport. Where possible, efforts should be made to boost rural employment opportunities, especially for those poor households dependent on outside labor employment.
Clearly, global poverty trends are moving in the right direction. But unless a serious effort is made at this semi-annual IMF/World Bank, first, to acknowledge the “hidden” global poverty problem, and second, to take these concrete policy steps to address this problem, then it is rather premature to be predicting the end of global poverty in 20 years time.
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