Extreme poverty


Extreme poverty is the most severe type of poverty, defined by the United Nations as "a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services". Historically, other definitions have been proposed within the United Nations.
Extreme poverty mainly refers to an income below the international poverty line of $1.90 per day in 2018, set by the World Bank. This is the equivalent of $1.00 a day in 1996 US prices, hence the widely used expression "living on less than a dollar a day". The vast majority of those in extreme poverty reside in South Asia and Sub-Saharan Africa. As of 2018, it is estimated that the country with the most people living in extreme poverty is Nigeria, at 86 million.
In the past, the vast majority of the world population lived in conditions of extreme poverty.
The percentage of the global population living in absolute poverty fell from over 80% in 1800 to around 10% by 2015. According to UN estimates, roughly 734 million people or 10% remained under those conditions. The number had previously been measured as 1.9 billion in 1990, and 1.2 billion in 2008. Despite the significant number of individuals still below the international poverty line, these figures represent significant progress for the international community, as they reflect a decrease of more than one billion people over 15 years.
The reduction of extreme poverty and hunger was the first Millennium Development Goal, as set by the United Nations in 2000. Specifically, the target was to reduce the extreme poverty rate by half by 2015, a goal that was met five years ahead of schedule. In the Sustainable Development Goals, which succeeded the MDGs, the goal is to end extreme poverty in all its forms everywhere. With this declaration the international community, including the UN and the World Bank have adopted the target of ending extreme poverty by 2030.

Definition

Previous definitions

In July 1993, Leandro Despouy, the then UN Special Raporters on extreme poverty and human rights made use of a definition he adapted from a 1987 report to the French Economic and Social Council by Fr. Joseph Wresinski, founder of the International Movement ATD Fourth World, distinguishing "lack of basic security" and "chronic poverty", linking the eradication of extreme poverty by allowing people currently experiencing it a real opportunity to exercise all their human rights:
This definition was mentioned previously, in June 1989, in the preliminary report on the realization of economic, social and cultural rights by the UN Special Rapporteur Danilo Türk. It is still in use today, among others, in the current UN Guiding Principles on Extreme Poverty and Human Rights adopted by the UN Human Rights Council in September 2012.

Consumption-based definition

Extreme poverty is defined by the international community as living below $1.90 a day, as measured in 2011 international prices. This number, also known as the international poverty line, is periodically updated to account for inflation and differences in the cost of living; it was originally defined at $1.00 a day in 1996. The updates are made according to new price data to portray the costs of basic food, health services, clothing, and shelter around the world as accurately as possible. The latest revision was made in 2015 when the World Bank increased the line to international-$1.90.
Because many of the world's poorest people do not have a monetary income, the poverty measurement is based on the monetary value of a person's consumption. Otherwise the poverty measurement would be missing the home production of subsistence farmers that consume largely their own production.

Alternative definitions

The $1.90/day extreme poverty line remains the most widely used metric as it highlights the reality of those in the most severe conditions. Although widely used by most international organizations, it has come under scrutiny due to a variety of factors. For example, it does not account for how far below the line people are, referred to as the depth of poverty. For this purpose, the same institutions publish data on the poverty gap.
The international poverty line is designed to stay constant over time, to allow comparisons between different years. It is therefore a measure of absolute poverty and is not measuring relative poverty. It is also not designed to capture how people view their own financial situation. Moreover, the calculation of the poverty line relies on information about consumer prices to calculate purchasing power parity, which are very hard to measure and are necessarily debatable. As with all other metrics, there may also be missing data from the poorest and most fragile countries.
Several alternative instruments for measuring extreme poverty have been suggested which incorporate other factors such as malnutrition and lack of access to a basic education. The Multidimensional Poverty Index, based on the Alkire–Foster Method, is published by the Oxford Poverty & Human Development Initiative : it measures deprivation in basic needs and can be broken down to reflect both the incidence and the intensity of poverty. For example, under conventional measures, in both Ethiopia and Uzbekistan about 40% of the population is considered extremely poor, but based on the MPI, 90% of Ethiopians but only 2% of Uzbeks are in multidimensional poverty.
The MPI is useful for development officials to determine the most likely causes of poverty within a region, using the M0 measure of the method. For example, in the Gaza Strip of Palestine, using the M0 measure of the Alkire–Foster method reveals that poverty in the region is primarily caused by a lack of access to electricity, lack of access to drinking water, and widespread overcrowding. In contrast, data from the Chhukha District of Bhutan reveals that income is a much larger contributor to poverty as opposed to other dimensions within the region. However, the MPI only presents data from 105 countries, so it cannot be used for global measurements.

Share of the population living in extreme poverty

Region1990199520002005201020152017
Developed countries4.064.994.75.485.287.917.45
Latin America & Caribbean66.6164.7565.7754.0435.322.9523.73
Middle East & North Africa14.816.499.959.66.8615.7424.16
South Asia557.05550.44564.92533.28425.32230.51173.1
East Asia & Pacific977.29766.14632.26347.99212.1242.0829.15
Europe & Central Asia11.513234.2822.0411.277.356.37
Sub-Saharan Africa280.95352.76388.27393.57412.49417.6432.5
Total1,9101,7901,7001,3701,110744.14696.45

Current trends

Getting to zero

Using the World Bank definition of $1.90/day, as of 2021, roughly 710 million people remained in extreme poverty. Nearly half of them live in India and China, with more than 85% living in just 20 countries. Since the mid-1990s, there has been a steady decline in both the worldwide poverty rate and the total number of extreme poor. In 1990, the percentage of the global population living in extreme poverty was 43%, but in 2011, that percentage had dropped down to 21%. This halving of the extreme poverty rate falls in line with the first Millennium Development Goal proposed by former UN Secretary-General Kofi Annan, who called on the international community at the turn of the century to reduce the percentage of people in extreme poverty by half by 2015.
This reduction in extreme poverty took place most notably in China, Indonesia, India, Pakistan and Vietnam. These five countries accounted for the alleviation of 715 million people out of extreme poverty between 1990 and 2010 – more than the global net total of roughly 700 million. This statistical oddity can be explained by the fact that the number of people living in extreme poverty in Sub-Saharan Africa rose from 290 million to 414 million over the same period. However, there have been many positive signs for extensive, global poverty reduction as well. Since 1999, the total number of extreme poor has declined by an average of 50 million per year. Moreover, in 2005, for the first time in recorded history, poverty rates began to fall in every region of the world, including Africa.
As aforementioned, the number of people living in extreme poverty has reduced from 1.9 billion to 766 million over the span of the last decades. If we remain on our current trajectory, many economists predict we could reach global zero by 2030–2035, thus ending extreme poverty. Global zero entails a world in which fewer than 3% of the global population lives in extreme poverty. This zero figure is set at 3% in recognition of the fact that some amount of frictional poverty will continue to exist, whether it is caused by political conflict or unexpected economic fluctuations, at least for the foreseeable future. However, the Brookings Institution notes that any projection about poverty more than a few years into the future runs the risk of being highly uncertain. This is because changes in consumption and distribution throughout the developing world over the next two decades could result in monumental shifts in global poverty, for better or worse.
Others are more pessimistic about this possibility, predicting a range of 193 million to 660 million people still living in extreme poverty by 2035. Additionally, some believe the rate of poverty reduction will slow down in the developing world, especially in Africa, and as such it will take closer to five decades to reach global zero. Despite these reservations, several prominent international and national organizations, including the UN, the World Bank and the United States Federal Government, have set a target of reaching global zero by the end of 2030.
More recent analyses in 2022 on real wages have questioned whether extreme poverty was a "natural" condition of humanity and decreased with the rise of capitalism.