It is just under four years since the world became aware of Covid-19. This triggered a huge decline in economic activity, followed by a swift overall recovery, the Russia-Ukraine and now Gaza wars, soaring prices (especially of food and energy) and rapidly rising interest rates. In the background, climate change is becoming increasingly evident. What does all this mean for the world’s poorest? The answer is that past progress in eliminating extreme poverty has slowed sharply. In the countries that contain most of the world’s poorest people, it has simply stalled. If this is to improve, these countries will need more generous assistance from official donors.

The much-maligned age of globalisation helped bring about huge reductions in the proportion of the world’s population living in extreme destitution. Currently, the World Bank defines that as an income of less than $2.15 a day at 2017 prices. The numbers in extreme poverty, so defined, fell from 1,870mn (31 per cent of the world population) in 1998 to a forecast of 690mn (9 per cent of global population) in 2023. Unfortunately, the rate of decline has slowed sharply: from 2013 to 2023, the global poverty rate will fall by a forecast of a little over 3 percentage points. In contrast, it fell by 14 percentage points in the decade prior to 2013. (See charts.)

Why has this slowdown in the rate of fall in extreme poverty happened? The answer is that it has slowed in the world’s poorest countries — those eligible for lending by the International Development Association, the World Bank’s soft-lending arm. The proportion of the population in extreme poverty in the rest of the world fell from 20 per cent in 1998 to a forecast of just 3 per cent in 2023. It fell by an estimated 4 percentage points just between 2013 and 2023. Meanwhile, in the IDA-eligible countries the proportion in extreme poverty also fell, from 48 per cent in 1998 to a (still high) forecast of 26 per cent in 2023. But the reduction was a mere percentage point between 2013 and 2023, while it had been 14 percentage points in the preceding decade.