Extreme poverty eradication is slowing. Following last month’s World Bank and International Monetary Fund (IMF) Spring Meetings, the World Poverty Clock has been updated to reflect newly available and revised data related to income distribution, national accounts, and GDP forecasts for nearly every country in the world. The new research shows that the pace of poverty reduction is down by two-fifths since 2017. The biggest increases in poverty projections were due to conflicts in Yemen and Venezuela and an economic slowdown in Tanzania. At the same time, there are several strongly performing Asian economies, especially India, where lower than previously projected poverty estimates result in a base effect of lower absolute poverty levels. As these countries have fewer people in extreme poverty, the poverty escape rate also slows down. This means that— under a base case projection—in 2030, around 480 million people will still be living in extreme poverty, up 44 million from the previous estimate.
African youth will be hit hardest. It is projected that Africa has 427 million people living in extreme poverty. This means that the continent is expected to be home to almost three-quarters of global poverty by the end of 2019. This does not bode well for the rapidly growing and young population. By 2050, Africa will have 362 million (up from 200 million today) young people between the ages of 15 and 24 years old. As Africa’s working-age population is rapidly growing and if current trends of employment continue, only a minor part will be able to find decent work. The UNDP has already started to prioritize youth in its efforts to reduce poverty.
Climate change is an important driver of the projections of poverty. Climate impact alone is expected to drive an additional 100 million people into poverty. Indeed, developing countries suffer more from casualties attributable to climate change than developed countries. Those living in precarious circumstances are often not capable of managing climate risks and thus vulnerable to shocks like weather-related disasters, a bad harvest, or drought.
- Addressing poverty will have to entail addressing climate change, the World Bank earlier concluded. Climate inaction will thus further undermine efforts to reach SGD 1 – Eradicating poverty.
- Rising youth unemployment on the African continent is a crisis in the making. As the Arab Spring has shown, lack of employment opportunities can undermine social cohesion and political stability. Furthermore, extremist groups will find it easier to recruit young people with no hope on finding a job and living a dignified life.
The Risk Radar is a monthly research report in which we monitor and qualify the world’s biggest risks to watch. Our updates are based on the estimated likelihood and impact of these risks. This report provides an additional ‘risk flection’ from a political, social, economic and technological perspective.
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