The World Bank Group’s first goal, to end extreme poverty within a generation, has the specific target of decreasing the global extreme poverty rate to no more than 3 percent by 2030, since a small amount of frictional poverty is likely to persist. This is possible but challenging, and business as usual will not be enough to reach that target going forward. It will be important to promote growth that is sustained and inclusive, to create more and better jobs, and to develop effective safety net programs to ensure that the most vulnerable can persevere in the face of shocks. While economic growth is vital, the quality of that growth also matters.
The second goal, to promote shared prosperity in every country, is measured by the growth in income among the bottom 40 percent of the income distribution in each country, but broadly translates into a focus on the welfare of the least well-off in each country. This goal works alongside the poverty goal, and includes a strong emphasis on tackling persistent inequalities that keep people in poverty from generation to generation.
There is no silver bullet to ending poverty, and strategies to reach the least well-off must be tailored to each country’s context, taking into account the latest data and analysis and the needs of the people. To succeed in reducing poverty, countries need to do three things:
- Grow in an inclusive, labor-intensive way.
- Invest in the human capital of people, especially those who are unable to benefit from basic services due to circumstances beyond their control.
- Insure poor and vulnerable people against the shocks that can push them deeper into poverty- things such as severe weather, pandemics, food price variability, and economic crises.