Poverty and Inequality through 2030
Thanks to strong economic growth, poverty has tended to fall worldwide. But the trend is not sufficient to eradicate poverty by 2030. For this, growth would have to rise further and inequalities fall. Non-economic dimensions of well-being, such as education and health, also need to be taken into account. This assumes that governments in particular have the capacity to invest in public infrastructures.
The Millennium Development Goals (MDGs) were adopted by the global community in 2000 with great fanfare, and set targets for wellbeing and progress to the year 2015. In 2015, the next phase of global goal setting was introduced with the Sustainable Development Goals (SDGs) which set targets to the year 2030. The 8 original MDGs have been expanded to 17 SDGs. The SDGs have themselves been further specified using more than 200 indicators. The pros and cons of this dramatic broadening in scope have been discussed in Kanbur, Patel and Stiglitz. The more open process of goal setting, incorporating a wider range of concerns, was bound to lead to greater expansiveness. And the importance of including sustainability in the expanded goals cannot be doubted. In any event, the global community now has a set of targets to aim for by the year 2030.
This paper will concentrate on a subset of the targets and ask where we are and what the prospects are for achieving them by 2030, which after all is only a little more than a decade away. The specific focus of this paper will be on income poverty and inequality. Reducing income poverty was the lead target of the MDGs and it is also mentioned first in the SDGs. Target 1.1 of the SDGs is: “By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day.” Income Inequality was not in the MDGs, but is now explicit as SDG 10. Target 10.1 states: “By 2030, progressively achieve and sustain income growth of the bottom 40 percent of the population at a rate higher than the national average.” In effect, therefore, this target aims to reduce income inequalities within countries. Of course income is only one dimension of wellbeing and deprivation. The SDGs follow the MDGs in emphasizing non-income dimensions such as nutrition (SDG 2), health (SDG 3) and education (SDG4). Although my focus will be on the income dimensions, I will also touch on non-income ones.
The End of Income Poverty?
What level is global income poverty headed towards in 2030, and beyond? The answer to this depends of course on how poverty is measured, and this in turn involves technically difficult questions of comparing standards of living across space and time. SDG 1.1 specifies extreme poverty as persons living on less than $1.25 per day, but this is at “purchasing power parity” (PPP) exchange rates, not official exchange rates. […]
OUTLINE
- The End of Income Poverty?
- Inequality Within and Between Countries
- Universal Basic Income as a National Policy?
- Non-Income Dimensions
Ravi Kanbur is Professor of International Relations and Economics at Cornell University (USA). He has held various positions at the World Bank, including Chief Economist for Africa.
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Poverty and Inequality through 2030
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