Eradicating global poverty: Addressing old challenges with new tools

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Over the past quarter century, the world has experienced unprecedented progress in alleviating poverty, a feat that could not have been realised without concerted global efforts. Signifying the enormity of power the world wields when all countries come together to pursue a common goal.

Although the COVID-19 pandemic has disrupted this hard-earned progress by pushing millions of people into poverty, there were major threats to the poverty eradication gains before the outbreak of the pandemic. Data from the World Bank reveals that while globally, extreme poverty declined by an average of about 1 percentage point per year from 1990 to 2015, this rate of growth stalled to only 0.6 percentage point per year from 2013 to 2015, and it further dwindled to 0.5 percentage point per year from 2015 to 2017, threatening the goal to reduce global extreme poverty to below 3 percent by 2030.

To elucidate the intricacy of the slowdown in extreme poverty relating to the COVID-19 pandemic, the World Bank data indicates that in South Asia and sub-Saharan Africa, where the largest share of the world’s poor population live, poverty reduction efforts against the US$3.20 and US$5.50 lines have been slower than against the extreme poverty line, indicating that a chunk of the population in these two regions had narrowly escaped extreme poverty prior to the outbreak of COVID-19. This group of people were easily pushed back into poverty as they are susceptible to the impoverishing impact of the COVID-19 pandemic, and the two other major drivers of extreme poverty – armed conflict and climate change.

Policy-makers and the development community cannot effectively address this challenge to reverse the hard-won progress COVID-19 and its associated economic crisis had wiped out, without the aid of a comprehensive cross-country dataset that shows the demographics of poor people.

To tackle this challenge of limited cross-country data, the World Data Lab – a global data enterprise, has developed the World Poverty Clock, a tool that monitors progress against poverty which is funded by the International Fund for Agricultural Development (IFAD) and the Federal Ministry for Economic Cooperation and Development of Germany.

This new tool provides real-time data of the world’s total number of people living in poverty, disaggregated by gender, urban or rural location and age. Currently, the World Poverty Clock shows that out of about 682 million people living in extreme poverty worldwide, over 591 million are in rural areas, representing a whopping majority of the world’s poor population – suggesting that the epicentre in the fight against global poverty is in rural communities. With rural poverty largely driven by underdeveloped infrastructure which impedes access to essential social and economic services such as education, water, energy, financial services, healthcare, transportation, markets and job opportunities; governments, development organisations and other relevant stakeholders could design and implement robust development programmes which integrate rural and urban centres.

The ultimate objective of these programmes is to revitalise rural economies and promote shared prosperity through inclusive growth. To an extent, this strategy will significantly limit rural-urban migration which will be instrumental in addressing the exodus of human capital from agriculture and other vital industries in rural areas which has crucial implications for sustainable development on both sides of the aisle. For these development programmes to create decent jobs, stimulate growth, bolster shared prosperity and build durable local economies that could eradicate poverty, policy-makers should prioritise escalating information and communications technology (ICT) infrastructure development particularly in rural areas.

By scaling up ICT infrastructure development in rural and remote areas, social and economic services will be strengthened through financial technology, digital health, agricultural technology, e-commerce and digital education, which will provide essential economic and social services to underserved populations or deprived communities.

In the agriculture sector, the integration of technology will promote mechanised farming which will boost productivity.

Through ICT infrastructure development and mobile phone penetration, farmers living in rural areas can reduce post-harvest losses by easily accessing e-commerce or online trading platforms to sell their farm produce to buyers in both rural and urban centres. Again, farmers or rural people engaged in the informal sector who have little or no relevant financial information can also save, make or receive payment, access financial credit and insure against risk with only a mobile phone – financial technology, allows the unbanked or underserved population in rural areas to access financial services. Through the services of financial technology, the rural population can pay for the education of their children, access financial credit to grow their businesses and also insure against risks which serves as a stronghold that saves low-income rural households from easily falling into poverty during economic downturns, floods, ill health or even loss of a breadwinner.

Apart from the fact that the integration of ICT into the rural economy creates additional jobs, all these social and economic gains together with several other benefits, highlight the essential function ICT plays in alleviating poverty. Therefore, governments and the development community should focus on increasing ICT infrastructure investment in rural areas, make global poverty alleviation a collective responsibility, and draw lessons from countries that are experiencing substantial socio-economic gains from ICT infrastructure in the fight against poverty. For example, China has been successful in eradicating absolute poverty partly because of ICT. Even at the latter stage of the country’s poverty eradication programme, with pockets of poverty-stricken households in rural and remote areas where it was difficult to locate the rural poor, China’s precise poverty alleviation strategy was guided by ICT infrastructure such as websites and mobile phones that augmented efforts to deliver social resources that facilitated poverty eradication in the country.

While this is not to encourage cut and paste policy-making, China’s effective integration of ICT in its poverty eradication projects is not only unique, but also demonstrates to the world the potential of ICT capacity when it is harnessed to spur social and economic gains in the fight against poverty. It has therefore become crucial for policy-makers, particularly in developing countries, to accelerate ICT infrastructure development to foster shared prosperity and promote inclusive growth to eradicate global poverty.

Alexander is an economic consultant, chartered economist and a chartered financial analyst

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