World Bank Report Highlights Poverty and Climate Challenges

Source: This post on World Bank Report Highlights Poverty and Climate Challenges has been created based on the article “Extreme weather obstacle to an equitable world, as 3.53 billion people continue to live in poverty” published in Down to Earth on 21st October 2024.

Why in news?

According to the World Bank’s latest report, extreme weather will be a significant obstacle to achieving a more equitable world, with 3.53 billion people still living in poverty in 2024.

Findings of the report

1. Climate shocks, including extreme weather events, devastate livelihoods and trap vulnerable populations in a cycle of poverty.

These shocks are especially difficult to recover from, particularly for those living in low-income countries without access to adequate infrastructure and resources.

2. In 2024, 692 million people are living in extreme poverty, defined as subsisting on less than $2.15 per day.

When measured against the higher poverty standard of $6.85 per day, 43.6% of the global population or approximately 3.53 billion people are classified as living in poverty.

3. The slow progress in poverty alleviation reflects a “polycrisis” caused by factors such as the pandemic, slow economic growth, increased conflict, and climate change.

4. In 2024, South Asia is home to 1.48 billion poor people, while Sub-Saharan Africa has 1.11 billion poor people. Together, these regions account for 73% of the global poor.

5. By 2030, 7.3% of the world’s population could still be living on less than $2.15 a day, which is more than double the global goal of reducing extreme poverty to 3%.

6. Long-Term Poverty Reduction Goals: It could take over a century to lift individuals above the $6.85 per day threshold, according to current projections.

7. Rising Income Disparities: The World Bank’s report warns of growing income inequality, particularly in Sub-Saharan Africa and Latin America, with many countries in these regions showing Gini index scores above 40.

8. High Inequality in Southern and Central Africa: Inequality is most pronounced in Southern and Central Africa, exacerbating the challenge of poverty reduction.

9. Climate Shocks and Economic Growth

i) Vulnerability to Extreme Weather: South Asia, with 88.1% of its population exposed to climate risks, and Sub-Saharan Africa, home to the highest number of people at severe risk, are particularly vulnerable to climate shocks such as floods, heatwaves, and cyclones.

ii) Need for Inclusive Economic Growth: The World Bank emphasizes the importance of inclusive economic growth to lift people out of poverty. This growth must be complemented by investments in education, healthcare, infrastructure, and access to markets.

10. Building Resilience to Climate Impacts

i) Targeted Climate Adaptation Strategies: Sub-Saharan Africa and South Asia require targeted adaptation strategies to withstand the impacts of extreme weather. The report calls for stronger social protection systems, including healthcare, education, and employment opportunities.

ii) Progressive Fiscal Policies: Countries must adopt progressive fiscal policies that increase domestic revenue while reducing inequality, ensuring that vulnerable populations benefit from economic growth.

iii) Strengthening Insurance Mechanisms: To protect vulnerable populations from falling deeper into poverty during climate disasters, the report recommends strengthening insurance mechanisms and other safety nets.

UPSC Syllabus: Reports and Index