Poverty And Shared Prosperity 2016

Poverty and Shared Prosperity 2016 is the first of an annual flagship report that will inform a global audience comprising development practitioners, policy makers, researchers, advocates, and citizens in general with the latest and most accurate estimates on trends in global poverty and shared prosperity. This edition will also document trends in inequality and identify recent country experiences that have been successful in reducing inequalities, provide key lessons from those experiences, and synthesize the rigorous evidence on public policies that can shift inequality in a way that bolsters poverty reduction and shared prosperity in a sustainable manner. Specifically, the report will address the following questions: • What is the latest evidence on the levels and evolution of extreme poverty and shared prosperity? • Which countries and regions have been more successful in terms of progress toward the twin goals and which are lagging behind? • What does the global context of lower economic growth mean for achieving the twin goals? • How can inequality reduction contribute to achieving the twin goals? • What does the evidence show concerning global and between- and within-country inequality trends? • Which interventions and countries have used the most innovative approaches to achieving the twin goals through reductions in inequality? The report will make four main contributions. First, it will present the most recent numbers on poverty, shared prosperity, and inequality. Second, it will stress the importance of inequality reduction in ending poverty and boosting shared prosperity by 2030 in a context of weaker growth. Third, it will highlight the diversity of within-country inequality reduction experiences and will synthesize experiences of successful countries and policies, addressing the roots of inequality without compromising economic growth. In doing so, the report will shatter some myths and sharpen our knowledge of what works in reducing inequalities. Finally, it will also advocate for the need to expand and improve data collection—for example, data availability, comparability, and quality—and rigorous evidence on inequality impacts in order to deliver high-quality poverty and shared prosperity monitoring.

The World Bank Group has two overarching goals: End extreme poverty by 2030 and promote shared prosperity by boosting the incomes of the bottom 40 percent of the population in each economy. As this year’s Poverty and Shared Prosperity report documents, the world continues to make progress toward these goals. In 2015, approximately one-tenth of the world’s population lived in extreme poverty, and the incomes of the bottom 40 percent rose in 77 percent of economies studied. But success cannot be taken for granted. Poverty remains high in Sub- Saharan Africa, as well as in fragile and conflict-affected states. At the same time, most of the world’s poor now live in middle-income countries, which tend to have higher national poverty lines. This year’s report tracks poverty comparisons at two higher poverty thresholds—$3.20 and $5.50 per day—which are typical of standards in lower- and upper-middle-income countries. In addition, the report introduces a societal poverty line based on each economy’s median income or consumption. Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle also recognizes that poverty is not only about income and consumption—and it introduces a multidimensional poverty measure that adds other factors, such as access to education, electricity, drinking water, and sanitation. It also explores how inequality within households could affect the global profile of the poor. All these additional pieces enrich our understanding of the poverty puzzle, bringing us closer to solving it. For more information, please visit worldbank.org/PSP

This edition of the biennial Poverty and Shared Prosperity report brings sobering news. The COVID-19 (coronavirus) pandemic and its associated economic crisis, compounded by the effects of armed conflict and climate change, are reversing hard-won gains in poverty reduction and shared prosperity. The fight to end poverty has suffered its worst setback in decades after more than 20 years of progress. The goal of ending extreme poverty by 2030, already at risk before the pandemic, is now beyond reach in the absence of swift, significant, and sustained action, and the objective of advancing shared prosperity—raising the incomes of the poorest 40 percent in each country—will be much more difficult. Poverty and Shared Prosperity 2020: Reversals of Fortune presents new estimates of COVID-19's impacts on global poverty and shared prosperity. Harnessing fresh data from frontline surveys and economic simulations, it shows that pandemic-related job losses and deprivation worldwide are hitting already poor and vulnerable people hard, while also shifting the profile of global poverty to include millions of 'new poor.' Original analysis included in the report shows that the new poor are more urban, better educated, and less likely to work in agriculture than those living in extreme poverty before COVID-19. It also gives new estimates of the impact of conflict and climate change, and how they overlap. These results are important for targeting policies to safeguard lives and livelihoods. It shows how some countries are acting to reverse the crisis, protect those most vulnerable, and promote a resilient recovery. These findings call for urgent action. If the global response fails the world's poorest and most vulnerable people now, the losses they have experienced to date will be minimal compared with what lies ahead. Success over the long term will require much more than stopping COVID-19. As efforts to curb the disease and its economic fallout intensify, the interrupted development agenda in low- and middle-income countries must be put back on track. Recovering from today's reversals of fortune requires tackling the economic crisis unleashed by COVID-19 with a commitment proportional to the crisis itself. In doing so, countries can also plant the seeds for dealing with the long-term development challenges of promoting inclusive growth, capital accumulation, and risk prevention—particularly the risks of conflict and climate change.

The Global Monitoring Report 2014/2015: Ending Poverty and Sharing Prosperity was written jointly by the World Bank Group (WBG) and the International Monetary Fund, with substantive inputs from the Organisation for Economic Co-operation and Development. This year's report details, for the first time, progress toward the WBG's twin goals of ending extreme poverty by 2030 and promoting shared prosperity and assesses the state of policies and institutions that are important for achieving them. The report continues to monitor progress on the Millennium Development Goals (MDGs). Also for the first time, the report includes information about high-income countries. It finds that while gaps in living standards have been closing in many countries, the well-being of households in the bottom 40 percent, as measured by the non-income MDGs such as access to education and health services, remains below that of households in the top 60 percent. The focus of this year's report is on three elements needed to make growth more inclusive and sustainable: investment in human capital that favors the poor, the best use of safety nets, and steps to ensure the environmental sustainability of economic growth. These three elements are imperative to all countries' development strategies, and are also fundamental to global efforts to achieve the twin goals, the MDGs, and the Sustainable Development Goals that will succeed the MDGs. Global Monitoring Report 2014/2015 was prepared in collaboration with regional development banks and other multilateral partners.

In 2013, the World Bank Group announced two goals that would guide its operations worldwide. First is the eradication of chronic extreme poverty bringing the number of extremely poor people, defined as those living on less than 1.25 purchasing power parity (PPP)†“adjusted dollars a day, to less than 3 percent of the world’s population by 2030.The second is the boosting of shared prosperity, defined as promoting the growth of per capita real income of the poorest 40 percent of the population in each country. In 2015, United Nations member nations agreed in New York to a set of post-2015 Sustainable Development Goals (SDGs), the first and foremost of which is the eradication of extreme poverty everywhere, in all its forms. Both the language and the spirit of the SDG objective reflect the growing acceptance of the idea that poverty is a multidimensional concept that reflects multiple deprivations in various aspects of well-being. That said, there is much less agreement on the best ways in which those deprivations should be measured, and on whether or how information on them should be aggregated. Monitoring Global Poverty: Report of the Commission on Global Poverty advises the World Bank on the measurement and monitoring of global poverty in two areas: What should be the interpretation of the definition of extreme poverty, set in 2015 in PPP-adjusted dollars a day per person? What choices should the Bank make regarding complementary monetary and nonmonetary poverty measures to be tracked and made available to policy makers? The World Bank plays an important role in shaping the global debate on combating poverty, and the indicators and data that the Bank collates and makes available shape opinion and actual policies in client countries, and, to a certain extent, in all countries. How we answer the above questions can therefore have a major influence on the global economy.

Over the last decade Latin America and the Caribbean region has achieved important progress towards the World Bank Group's goals of eradicating extreme poverty and boosting income growth of the bottom 40 percent, propelled by remarkable economic growth and falling income inequality. Despite this impressive performance, social progress has not been uniform over this period, and certain countries, subregions and even socioeconomic groups participated less in the growth process. As of today, more than 75 million people still live in extreme poverty in the region (using $2.50/day/capita), half of them in Brazil and Mexico, and extreme poverty rates top 40 percent in Guatemala and reach nearly 60 percent in Haiti. This means that extreme poverty is still an important issue in both low- and middle-income countries in the region. As growth wanes and progress in reducing the still high levels of inequality in the region slows, it will be more important than ever for governments to focus policies on inclusive growth. The book includes an overview that highlights progress towards the goals of poverty eradication and shared prosperity between 2003 and 2012, unpacks recent gains at the household level using an income-based asset model, and examines some of the policy levers used to affect social outcomes in the region. It draws on 13 country studies, eight of which are featured in this volume: Argentina, Brazil, Colombia, El Salvador, Mexico, Paraguay, Peru, and Uruguay. The other case studies include: Bolivia, Chile, Dominican Republic, Ecuador, and Honduras, which will be included in the web version of the book.

Perceptions of Africa have changed dramatically. Viewed as a continent of wars, famines and entrenched poverty in the late 1990s, there is now a focus on “Africa rising†? and an “African 21st century.†? Two decades of unprecedented economic growth in Africa should have brought substantial improvements in well-being. Whether or not they did, remains unclear given the poor quality of the data, the nature of the growth process (especially the role of natural resources), conflicts that affect part of the region, and high population growth. Poverty in a Rising Africa documents the data challenges and systematically reviews the evidence on poverty from monetary and nonmonetary perspectives, as well as a focus on dimensions of inequality. Chapter 1 maps out the availability and quality of the data needed to track monetary poverty, reflects on the governance and political processes that underpin the current situation with respect to data production, and describes some approaches to addressing the data gaps. Chapter 2 evaluates the robustness of the estimates of poverty in Africa. It concludes that poverty reduction in Africa may be slightly greater than traditional estimates suggest, although even the most optimistic estimates of poverty reduction imply that more people lived in poverty in 2012 than in 1990. A broad-stroke profile of poverty and trends in poverty in the region is presented. Chapter 3 broadens the view of poverty by considering nonmonetary dimensions of well-being, such as education, health, and freedom, using Sen's (1985) capabilities and functioning approach. While progress has been made in a number of these areas, levels remain stubbornly low. Chapter 4 reviews the evidence on inequality in Africa. It looks not only at patterns of monetary inequality in Africa but also other dimensions, including inequality of opportunity, intergenerational mobility in occupation and education, and extreme wealth in Africa.