The World Bank (2016) suggests that the 2030 poverty target of three per cent is aspirational but possibly attainable under an optimistic scenario. However, even if it is met on average globally, deep pockets of multidimensional poverty are likely to remain (World Bank, 2016; Cruz et al., 2015). Reaching the three per cent target would require an unprecedented 4 per cent per capita growth rate per year throughout 2015-2030 (World Bank, 2015). In addition, poverty reduction would need to be broader based, especially in sub-Saharan Africa and South Asia (World Bank, 2015). The optimistic scenario is more likely to be reached if the poorest were to experience income growth that was systematically higher than the mean income growth for the total population (Cruz et al., 2015). More pessimistic scenarios suggest that global poverty will continue to be a challenge in 2030, both globally and in specific countries. In all scenarios, poverty remains highest in sub-Saharan Africa (Cruz et al., 2015).
Projected global poverty in 2030
Source: World Bank, 2015, p. 17
A 2015 ODI report provides an overview of existing work on projections of extreme poverty to 2030 (Greenhill et al., 2015). The most optimistic scenarios suggest that the extreme poverty rate could fall to 3-7 per cent of the world’s population by 2030 based on ‘business as usual’. However, these projections suggest that extreme poverty will be increasingly concentrated in fragile states and/or sub-Saharan Africa: see charts. Extreme poverty rates could remain in double digits if economic growth disappoints, and if income inequality worsens: see charts. It is also suggested that climate change will have substantial impacts on future poverty (Greenhill et al., 2015).
There have been fewer projections of inequality than of poverty. As with the poverty projections, different studies have reached different conclusions about inequality. Three recent projections include:
- Hillebrand (2011): under the optimistic market first scenario, the world Gini coefficient falls to 0.648 in 2050, but still remains high compared with most within-country distributions, because economic growth is assumed to continue to be strong in OECD and other rich countries. Under the trend growth scenario, the trend towards global income equality is stalled, down to 0.679 in 2050, compared to 0.684 in 2005.
- Hellebrandt and Mauro (2015): the Gini coefficient of global inequality will decline further to 61 in 2035, largely owing to rapid economic growth in the emerging-market economies.
- Allison et al. (2014): global income inequality may decrease if economic growth excels and increase if within country income distributions worsen.
- Allison, C., Fleisje, E., Glevey, W., Leenders, W., Prochazka, J., & Singhal, G. (2014). Trends and key drivers of income inequality. Marshall Economic Research Group, University of Cambridge.
- Cruz, M., Foster, J., Quillin, B., & Schellekens, P. (2015). Ending extreme poverty and sharing prosperity: Progress and policies (Policy Research Note). Washington, DC: World Bank.
- Hellebrandt, T., & Mauro, P. (2015). The future of worldwide income distribution (Working Paper 15-7). Peterson Institute for International Economics.
- Hillebrand, E. (2011). Poverty, growth, and inequality over the next 50 years. In P. Conforti (Ed.), Looking ahead in world agriculture: Perspectives to 2050. Rome: FAO.
- World Bank. (2016). Global monitoring report 2015/2016: Development goals in an era of demographic change. Washington, DC: World Bank.
- World Bank. (2015). Global economic prospects: Having fiscal space and using it. Washington, DC: World Bank.
- Greenhill, R., Carter, P., Hoy, C., & Manuel, M. (2015). Financing the future: How international public finance should fund a global social compact to eradicate poverty. London: ODI.