The recent World Bank report on poverty, prosperity, and planet lays out an ambitious plan for governments worldwide to work together on eradicating poverty. The goal is to foster inclusive growth and reduce climate change impacts on vulnerable communities. However, achieving this goal requires different strategies based on each country’s income, resources, and unique social and economic conditions. These differences mean that solutions will need to be tailored to each nation’s specific path to development and resilience.
In recent years, global efforts to reduce poverty have nearly stagnated. Although substantial progress has been made, approximately 700 million people continue to live on less than $2.15 a day, with the goal of eliminating extreme poverty by 2030 becoming increasingly distant. At the current pace, achieving this milestone will take about 30 years, far beyond the initially set target. Worse yet, if the objective is to raise incomes to a modest $6.85 per day—a benchmark for upper-middle-income countries—the global community could be looking at a century-long struggle. Presently, an astounding 44% of the world’s population lives below this threshold, reflecting the vast scope of the challenge ahead. Economic growth over the past quarter century has played a transformative role in reducing poverty worldwide. However, this progress has been significantly stymied by several recent crises, including sluggish economic expansion, the COVID-19 pandemic, ongoing conflicts, and the ever-worsening climate crisis. These forces have not only slowed progress but, in some cases, reversed poverty reduction gains made since the early 2000s. During that era, the proportion of people in extreme poverty fell from one-third of the global population to one-tenth. Today, while wealthier nations have largely rebounded from recent setbacks, low-income countries continue to grapple with disproportionately high rates of extreme poverty compared to pre-2019 levels. Growth in these regions is expected to remain weak, lagging behind pre-pandemic levels for the foreseeable future.
The World Bank’s report emphasises that poverty reduction, prosperity, and climate resilience are deeply interlinked. To alter the current trajectory, nations must adopt a dual approach, fostering economic growth that includes all segments of society while enhancing resilience to climate change. This will require bold, context-specific strategies that address the diverse challenges different countries face, from infrastructure gaps in low-income nations to emissions reduction in wealthier regions. A major hurdle to achieving poverty reduction is the persistent inequality that plagues many societies. In countries with high inequality, economic growth yields fewer benefits in terms of poverty alleviation. For example, if every nation attained an annual per capita income growth rate of 2%, it would take about 60 years to eliminate extreme poverty. However, by reducing income inequality—as measured by the Gini coefficient—by just 2% each year, this goal could be reached within two decades. High inequality restricts opportunities for lower-income individuals, effectively trapping many in cycles of poverty without access to quality education, healthcare, or stable employment. To foster upward mobility, governments should prioritise policies that create more inclusive labour markets, improve access to education and healthcare, and bolster social safety nets that allow marginalised communities to share in economic growth.
Each country’s journey toward poverty reduction and climate resilience must be customised to its specific needs and conditions. For low-income countries supported by the World Bank’s International Development Association (IDA), the primary focus should be on driving inclusive economic growth and investing in essential infrastructure and services, including education, healthcare, and employment opportunities. These investments are particularly crucial, given that 70% of the world’s extreme poor live in these regions, which contribute minimally to global greenhouse gas emissions. In these countries, investments in poverty alleviation can proceed without significant environmental impact, underscoring the moral imperative for wealthier nations to support them.
For lower-middle-income nations, the focus should shift toward fostering steady, inclusive growth and enhancing policy efficiency to improve incomes, resilience to climate impacts, and emissions control. Increased investment in climate mitigation is essential in these countries, many of which are projected to see rising emissions in the coming years. Effective climate investments yield immediate co-benefits, such as improved public health due to reduced air pollution, thereby reinforcing the link between environmental and socioeconomic goals. Upper-middle-income and high-income countries bear a disproportionate responsibility for global emissions, accounting for approximately 80% of all carbon dioxide output. These nations must urgently reduce their reliance on fossil fuels and lead the global transition toward renewable energy. While current policies in these countries indicate that emissions will decline, the pace of change is inadequate to meaningfully limit global warming. Furthermore, high-income nations often face high levels of income inequality, which can hinder sustainable poverty reduction. Reducing the Gini index by a few percentage points could make a considerable difference, ensuring that economic growth translates into substantial poverty alleviation.
Governments can support lower-income populations by addressing economic disparities and making labour markets more inclusive. Investment in sectors that benefit vulnerable communities is essential, as is reforming tax policies to reduce income inequality, providing affordable healthcare and education, and strengthening social protections that shield people from economic shocks. In lower-income countries, where poverty often intersects with the adverse impacts of climate change, development strategies must simultaneously build economic resilience and safeguard against environmental risks.
The path forward for countries also depends on their economic status and the specific challenges they face. For instance, in nations supported by the World Bank’s IDA, the road to prosperity entails accelerating inclusive economic growth and investing in crucial services like infrastructure, healthcare, and education. These countries, which contribute minimally to global emissions, can focus their poverty eradication efforts without major environmental consequences. In contrast, lower-middle-income countries should prioritise sustained, inclusive growth and enhanced policy measures to support income stability, climate resilience, and controlled greenhouse gas emissions. Given that emissions in these regions are expected to rise, climate mitigation investments offer dual benefits, including improved health outcomes from reduced air pollution.
Wealthier nations, due to their substantial carbon footprints, bear a critical responsibility to lead the shift toward renewable energy sources. Although existing policies indicate a slow decline in emissions, more aggressive action is necessary to curb global warming significantly. Addressing poverty, inequality, and climate change requires transformative policies, global cooperation, and vastly increased funding for sustainable development initiatives. For low-income countries, enhanced financial support could enable significant investments in healthcare, education, and infrastructure, laying the foundation for long-term growth and social stability. Overcoming the challenges of poverty, inequality, and climate change demands bold policy decisions and coordinated international efforts. Wealthier countries must take the lead in providing the financial resources, technological innovations, and knowledge-sharing necessary to assist lower-income nations in meeting sustainable development goals without compromising their climate resilience. This commitment to global partnership is essential to building a future that balances economic growth with environmental sustainability.
The global community now stands at a pivotal juncture. The urgent need to eradicate poverty, reduce inequality, and combat climate change offers an unparalleled opportunity to reshape the future. By taking decisive, collaborative action, we can build a world where economic growth benefits all, climate risks are managed, and the foundations of prosperity are laid for generations to come. This moment represents a historic opportunity to dismantle systemic injustices, reduce entrenched inequalities, and protect the planet from the escalating threats of climate change. Failure to act would not only perpetuate global poverty but would also intensify the climate crisis, jeopardising the welfare of future generations. Now is the time to make meaningful, enduring progress toward a future defined by inclusive prosperity and environmental resilience.
The path ahead is challenging yet filled with promise. Nations must come together, harnessing the power of policy innovation, financial support, and international solidarity to confront the deep-rooted issues of poverty, inequality, and climate change. Only through such unified efforts can we secure a world where growth and progress are shared equitably, laying the groundwork for a sustainable and prosperous future.
Author- Anika Tasnim
