Progress in Poverty Reduction Over the Last Decade

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NEW BRUNSWICK, New Jersey — Global poverty is one of the worst and most long-standing problems the world faces. It has uncountable effects on people, including hunger, lack of education, poor health, increased susceptibility to natural disasters and a host of other side effects. While the world has made constant poverty reduction efforts over the last decade, global poverty continues to be one of the most urgent global issues.

In 2010, around 16% of the world’s population lived in extreme poverty, living on an average of $0.87 cents per day. The total extreme poverty gap stood at $169 Billion in Purchasing Power Parity (PPP) in 2005. Though a much smaller gap than the previous decades, this still represented 0.25% of the world’s GDP. By 2015, global extreme poverty was down to 10% (736 million people). By 2018, it was down to 8.6%. However, more than 55% of the entire world population still lacked access to any form of social protection cash benefits. In 2018, working persons and their families made up 8% of the world’s poor. However, there are countries that have made great progress in poverty reduction over the last decade.

Tanzania’s Decline in Poverty

Since the turn of the new century, Tanzania has reported one of the largest declines in the poverty rate. In 2018, Tanzania reported a decline of at least 10%, showing great progress in poverty reduction over the last decade. The population living in poverty fell from 34.4% to 24.4%. Though the poverty rate remains significant, Tanzania has reportedly lifted more than a million people out of extreme poverty since 2007.

In addition to the general decline in poverty, Tanzania showed a large reduction in food insecurity and extreme poverty. Such success was seen mostly in rural Tanzania, a more impactful outcome of the reduced poverty figures. Simultaneously, Tanzania saw a 10% growth in its GDP per capita.

Tanzania Is Still Vulnerable to Poverty

However, with rapid population growth, the Tanzanians remain incredibly vulnerable to poverty. Reports show that for every four people lifted out of poverty, another three fall, leaving many people living at or just above the poverty line. Additionally, though seeing a 10% growth in GDP per capita, this growth in consumption has been skewed to the more well-off populations. This reflects the increasing issue of income inequality in Tanzania. Tanzania’s poverty is also most prevalent among the lake zone districts, which are much more susceptible to climate change and natural disasters.

Tanzania made great strides in poverty reduction over the last decade, mainly through strong government efforts and interventions such as the social safety net TASAF PSSN. Now, the Tanzanian government authorities are now looking towards structural transformation to ensure more lasting poverty reduction and infrastructural growth for the nation. One of its main goals is to promote non-agricultural industry activities and services and widespread education, empowering the people of Tanzania to sustain and benefit from such a structural shift.

Tajikistan

Poverty rates in Tajikistan have been on the decline for some time. They fell from 83% in 1999 to 57% in 2004. Tajikistan continued to make great progress in poverty reduction over the past decade moving from 37% to 32% to 29% in 2012, 2014 and 2017, respectively. Additionally, the GDP per capita grew approximately 37.5% between 2010 and 2017, with wages in Tajikistan growing by over 120% and productivity by 28%.

However, the poverty reduction progress has significantly slowed in recent years, decreasing by only one percentage point each year from 2014 to 2017. This is primarily attributed to the fall in remittances from 50% to almost 29% of Tajikistan’s GDP in just two years, from 2013 to 2015. Naturally, underprivileged households were affected by the fall in remittance, and the decline in poverty rates slowed.

Due to ineffective pro-poor policies, insufficient funding for social assistance programs and a narrow agriculturally focussed private sector, the poverty rate fluctuates greatly. Each year it peaks past 50% before settling again. Tajikistan’s main focus is now to foster a more diverse private sector business environment in order to promote steady private investment, increase funding of the pro-poor targeted social assistance programs and promote lasting job creation policies.

It is also important to note that Tajikistan measures poverty by a purchasing power parity (PPP) of $2.15 and an extreme poverty line of $1.08. This is below the general $1.90 measure of extreme poverty. As a result, Tajikistan may have even higher poverty rates when directly compared to other countries in the world.

The Way Forward

For the past 25 years, extreme poverty has been steadily declining. In fact, the world is moving toward meeting the U.N.’s Sustainable Development Goal of ending extreme poverty by 2030. However, with the COVID-19 pandemic and worsening climate change, 2020 brought an increase in extreme poverty from 88 million to 115 million people. Therefore, countries must double down on efforts to regain control on the reduction of poverty.

– Rebecca Harris
Photo: Flickr

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