Inequalities & Income – Global Challenge
Extreme poverty is defined as living on less than $1.90 a day, and an average of 9.2% of the global population still lives below the international poverty line (IPL). This figure represents the typical poverty line of some of the world’s poorest economies. To make matters worse, the global pandemic has gradually reversed the steady progress made towards eliminating global poverty over the past 20 years. It is estimated that the global recession brought upon by the pandemic may cause over 1.4% of the world’s population to fall into extreme poverty. Out of that, it is projected that an increasing number of urban dwellers are expected to fall into extreme poverty, with 82% originating from middle-income countries.
In addition to the pandemic, various undercutting factors have exacerbated the issue of global poverty over the years. Lack of inclusive economic growth, job insecurity, low wages, limited livelihoods and opportunities have all resulted in poverty and the inability to break away from it. High levels of inequality also impedes poverty reduction by undermining the sustainability of economic growth. Therefore, discrimination, historical and current exclusion from resources, people experiencing gender, ethnic, and racial and other inequalities often experience poverty.
Climate change and rising conflicts and wars are also factors that continue to deepen the levels of extreme poverty worldwide. It is projected that up to 132 million people will be pushed into extreme poverty brought on by climate change by 2030. Poverty by climate change largely affects developing nations, with the most urgent issues varying across regions. In Sub-Saharan Africa, reduced agricultural yield causes an increase in food prices. This not only throws them into deeper poverty it also exacerbates the issue of food insecurity. While in South Asia, there are three key drivers of poverty: food price, health concerns from the prevalence of diarrheal diseases, and natural disasters due to large exposure to cyclones, floods, and other extreme weather events.
Globally, the prevalence of fragile and conflict-affected situations continues to rise. It is reported that more than 40% of the global poor live in economies affected by fragility, conflict and violence. That number is expected to rise to 67% in the next decade. Conflict causes serious disruption to people’s lives and impedes countries’ growth. People living in areas with conflict are more likely to suffer monetary, education and infrastructure deprivations simultaneously. This inadvertently creates a vicious cycle that deteriorates human capital, incomes and socioeconomic mobility.