The Fight Against Extreme Poverty: How Far We’ve Come and the Role of Welfare
When looking at the big picture, we have been making amazing progress in many measures of life. One of them is the fight against extreme poverty.
There is no doubt that there is still a lot to be done; in fact, if we continue in a business-as-usual path the world won’t be able to eradicate extreme poverty by 2030. Still, let’s be positive about our outcomes so far — over 137,000 people escaped extreme poverty yesterday, as they have every day for the past 25 years.
The World Bank defines extreme poverty as the population which lives with less than $1.90 per day. In 2015, 10 per cent of the world’s population lived below the extreme poverty line. In 2013, two years before, 11 per cent were living in inhuman conditions, while in 1990, 36 per cent were.
The regions that have made the most progress were East Asia and South Asia and the Pacific, where the rate declined from 35 per cent in 1999 to 3 per cent in 2013. On the other hand, 42 per cent of people in sub-Saharan Africa are in extreme conditions nowadays.
There are many contributors to this achievement. One of them is the strengthening of disaster risks reduction; economic losses from disasters are now reaching an average of $250 billion to $300 billion a year and this figure might grow throughout time due to climate change. Disaster risk globally is highly concentrated in low- and lower-middle-income countries. In relation to the size of their economies, small island developing states have borne a disproportionate impact.
A way countries have found to overcome these terrible events is through the issue of catastrophe bonds. “Cat” bonds are a high-yield debt instrument that usually works like insurance, and is used to raise money in case of a catastrophe such as a hurricane or an earthquake. It has a special condition that states that if the issuer, such as the insurance or reinsurance company, suffers a loss from a particular catastrophe, then its obligation to pay interest and/or repay the principal is either deferred or completely forgiven.
Many governments have understood that social protection systems are fundamental to prevent and effectively reduce poverty and inequality, through benefits for least favoured segments of the population. Nevertheless, this system, though effective, has some particular challenges. For example, we are witnessing that for countries with an inverted demographic pyramid, the number of tax contributions might not be enough to compensate for the number of beneficiaries.
For instance, 68 per cent of people above retirement age receive a pension. However, that global average masks large and very significant regional differences. In Oceania, excluding Australia and New Zealand, and in sub-Saharan Africa, only 10 per cent of people above retirement age received a pension in 2016.
As we are witnessing in Europe, where the Welfare State culture is prominent, it is necessary to create more ground initiatives to balance this system — a system where we attract tax contributors in order to create a fair pension scheme.
Welfare assures the eradication of extreme poverty as a means to promote health. For the past 18 years, we have witnessed impressive advancements fronts. However, to meet the health targets by 2030, progress must be accelerated, in particular in regions with the highest burden of disease. These are some areas where the United Nations believes we should focus on improving towards healthier conditions for everyone:
Maternal mortality
Most maternal deaths can be prevented. Achieving the target of less than 70 maternal deaths per 100, 000 births by 2030 requires an annual rate of reduction of at least 7.5 per cent, more than double the annual rate of progress achieved from 2000 to 2015. Providing more skilled care during delivery is crucial to meet this target; in 2016, the rate of skilled care during live births was 78 per cent, compared to 61 per cent in 2000. In sub-Saharan Africa, however, only 50 per cent of women receive it.
Infectious diseases
A major risk factor for infectious diseases and mortality is the lack of safe water, sanitation and hygiene services, which disproportionately affects sub-Saharan Africa and Central and Southern Asia. Research points out that death rates due to the lack of sanitation are up to two or three times higher in these regions when compared to the global scale.
Non-infectious diseases and mental health
- Mental disorders such as depression can lead to suicide. Nearly 800,000 suicides occurred worldwide in 2015, with men about twice as likely to commit suicide as women.
- Tobacco and alcohol contribute to very serious diseases, yet they are vastly consumed across the globe. Nowadays, more than 1.1 billion people, mostly men, smoke tobacco. Encouragingly, tobacco consumption is a decreasing trend — it dropped from 23 per cent in 2007 to 21 per cent in 2013 among individuals 15 years of age and older. As for alcohol, the average consumption of pure alcohol was 6.4 litres per year per person among those in the same age group.
Other health risks
- In 2013, about 1.25 million people died from road traffic injuries, the leading cause of death among males between 15 and 29 years of age. Road traffic deaths have increased by about 13 per cent globally since 2000.
Health systems and funding
- In 2015, total official flows for medical research and basic health from all donor countries and multilateral organizations amounted to $9.7 billion, an increase in real terms of 30 per cent since 2010. Of that amount, the member countries of the Development Assistance Committee of OECD contributed $4.3 billion.
