Reversing wealth concentration

Oxfam, among others, has called for an international movement to end extreme wealth concentration arguing that the concentration of resources in the hands of the top 1% depresses economic activity and makes life harder for everyone else—particularly those at the bottom of the economic ladder.^[41][42] And they say that the gains of the world's billionaires in 2017, which amounted to $762 billion, were enough to end extreme global poverty seven times over.^[43]

Impacts of COVID-19

Due to COVID-19, poverty rates have risen higher between 75 million and 95 million individuals suffering from extreme poverty between pre-pandemic to 2022.^[54] This higher increase in poverty rates can be reflected by the rise in unemployment and work productivity caused by the pandemic. It is said that the global labor productivity between 200-2007 to 2011–2019 with a difference of 0.9 per cent productivity decrease has a similar rate which is seen between the years 2019 to 2021 and slowly declining since 2010.^[55] The International Labour Organization has estimated that global unemployment was increased to 33 million in the year 2020 which was four times higher than the global financial crisis that happened in 2009.^[56] According to the World Health Organization job losses for low-skilled workers were 11%, a much higher rate compared to medium and high-skilled workers, and 71% of the lower-income household at least one person in the household was unemployed or had to shut down their business due to the pandemic (61%).^[56]

Helping farmers

Raising farm incomes is described as the core of the antipoverty effort as three-quarters of the poor today are farmers.^[57] Estimates show that growth in the agricultural productivity of small farmers is, on average, at least twice as effective in benefiting the poorest half of a country's population as growth generated in non-agricultural sectors.^[58] For example, a 2012 study suggested that new varieties of chickpea could benefit Ethiopian farmers in future. The study assessed the potential economic and poverty impact of 11 improved chickpea varieties, released by the national agricultural research organization of Ethiopia in collaboration with the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT). The researchers estimated that using the varieties would bring about a total benefit of US$111 million for 30 years with consumers receiving 39% of the benefit and producers 61%. They expected the generated benefit would lift more than 0.7 million people (both producers and consumers) out of poverty. The authors concluded that further investments in the chickpea and other legume research in Ethiopia were therefore justified as a means of poverty alleviation.^[59]

Improving water management is an effective way to help reduce poverty among farmers. With better water management, they can improve productivity and potentially move beyond subsistence-level farming. During the Green Revolution of the 1960s and 1970s, for example, irrigation was a key factor in unlocking Asia's agricultural potential and reducing poverty. Between 1961 and 2002, the irrigated area almost doubled, as governments sought to achieve food security, improve public welfare and generate economic growth. In South Asia, cereal production rose by 137% from 1970 to 2007. This was achieved with only 3% more land.^[60]

The International Water Management Institute in Colombo, Sri Lanka, aims to improve the management of land and water resources for food, livelihoods and the environment. One project its scientists worked on demonstrates the impact that improving water management in agriculture can have. The study, funded by the Japan Bank for International Cooperation, initially upgraded and irrigated the irrigation system on the Walawe Left Bank, Sri Lanka, in 1997. In 2005, irrigation was extended to a further area. An analysis of the whole area was carried out in 2007 and 2008. This study found that access to irrigation provided families with opportunities to diversify their livelihood activities and potentially increase their incomes. For example, people with land could reliably grow rice or vegetables instead of working as labourers or relying on rainfall to water their crops. Those without land could benefit by working within new inland fisheries. Within the project's control area, 57% of households were below the poverty line in 2002 compared with 43% in 2007.^[61]

Welfare

Aid in its simplest form is a basic income grant, a form of social security periodically providing citizens with money. In pilot projects in Namibia, where such a program pays just $13 a month, people were able to pay tuition fees, raising the proportion of children going to school by 92%, child malnutrition rates fell from 42% to 10% and economic activity grew 10%.^[64][65] Aid could also be rewarded based on doing certain requirements. Unconditional cash transfer, widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receiving vaccinations.^[66] In Mexico, for example, the country with the largest such program, dropout rates of 16- to 19-year-olds in rural area dropped by 20% and children gained half an inch in height.^[67] Initial fears that the program would encourage families to stay at home rather than work to collect benefits have proven to be unfounded. Instead, there is less excuse for neglectful behavior as, for example, children are prevented from begging on the streets instead of going to school because it could result in suspension from the program.^[67] Unconditional cash transfer appear to be an effective intervention for reducing poverty, while at the same time improving health and education outcomes.^[68][69]

Welfare states have an effect on poverty reduction. Currently modern, expansive welfare states that ensure economic opportunity, independence and security in a near universal manner are still the exclusive domain of the developed nations.^[70] commonly constituting at least 20% of GDP, with the largest Scandinavian welfare states constituting over 40% of GDP.^[71] These modern welfare states, which largely arose in the late 19th and early 20th centuries, seeing their greatest expansion in the mid 20th century, and have proven themselves highly effective in reducing relative as well as absolute poverty in all analyzed high-income OECD countries.^[72][73][74] Philosopher Thomas Pogge is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend.

Development aid

A major proportion of aid from donor nations is 'tied', mandating that a receiving nation buy products originating only from the donor country.^[14] This can be harmful economically.^[14] For example, Eritrea is forced to spend aid money on foreign goods and services to build a network of railways even though it is cheaper to use local expertise and resources.^[14] Money from the United States to fight AIDS requires it be spent on U.S brand name drugs that can cost up to $15,000 a year compared to $350 a year for generics from other countries.^[14] Only Norway, Denmark, Netherlands and Britain have stopped tying their aid.^[14]

Some people^[who?] disagree with aid when looking at where the development aid money from NGOs and other funding is going. Funding tends to be used in a selective manner where the highest ranked health problem is the only thing treated, rather than funding basic health care development. This can occur due to a foundation's underlying political aspects to their development plan, where the politics outweigh the science of disease. The diseases then treated are ranked by their prevalence, morbidity, risk of mortality, and the feasibility of control.^[75] Through this ranking system, the disease that cause the most mortality and are most easily treated are given the funding. The argument occurs because once these people are treated, they are sent back to the conditions that led to the disease in the first place. By doing this, money and resources from aid can be wasted when people are re-infected. This was seen in the Rockefeller Foundation's Hookworm campaign in Mexico in the 1920s, where people were treated for hookworm and then contracted the disease again once back in the conditions from which they came. To prevent this, money could be spent on teaching citizens of the developing countries health education, basic sanitation, and providing adequate access to prevention methods and medical infrastructure. Not only would NGO money be better spent, but it would be more sustainable. These arguments suggest that the NGO development aid should be used for prevention and determining root causes rather acting upon political endeavours and treating for the sake of saying they helped.^[76]

Some think tanks and NGOs^[who?] have argued that Western monetary aid often only serves to increase poverty and social inequality, either because it is conditioned with the implementation of harmful economic policies in the recipient countries,^[77] or because it is tied to the importing of products from the donor country over cheaper alternatives.^[14] Sometimes foreign aid is seen to be serving the interests of the donor more than the recipient,^[78] and critics also argue that some of the foreign aid is stolen by corrupt governments and officials, and that higher aid levels erode the quality of governance. Policy becomes much more oriented toward what will get more aid money than it does towards meeting the needs of the people.^[79] Problems with the aid system and not aid itself are that the aid is excessively directed towards the salaries of consultants from donor countries, the aid is not spread properly, neglecting vital, less publicized area such as agriculture, and the aid is not properly coordinated among donors, leading to a plethora of disconnected projects rather than unified strategies.^[13]

Supporters of aid argue that these problems may be solved with better auditing of how the aid is used.^[79] Immunization campaigns for children, such as against polio, diphtheria and measles have saved millions of lives.^[13] Aid from non-governmental organizations may be more effective than governmental aid; this may be because it is better at reaching the poor and better controlled at the grassroots level.^[79] As a point of comparison, the annual world military spending is over $1 trillion.^[80]

Debt relief

One of the proposed ways to help poor countries that emerged during the 1980s has been debt relief. Given that many less developed nations have gotten themselves into extensive debt to banks and governments from the rich nations, and given that the interest payments on these debts are often more than a country can generate per year in profits from exports, cancelling part or all of these debts may allow poor nations "to get out of the hole".^[81] If poor countries do not have to spend so much on debt payments, they can use the money instead for priorities which help reduce poverty such as basic health-care and education.^[82] Many nations began offering services, such as free health care even while overwhelming the health care infrastructure, because of savings that resulted from the rounds of debt relief in 2005.^[83]

In 1996 the Heavily Indebted Poor Countries Initiative by the World Bank, which gave voluntary debt relief to creditors and on foreign debt for Multilateral and Bilateral debt, which was pushed later in a second phase known as the Multilateral Debt Relief Initiative in order to provide debt relief, that helped the IDA, IMF, and to lower-income countries that went through the Heavily Indebted Poor Countries initiative.^[84] The process by the IMF to carry out the initiative could be broken down into two steps, the first would be meeting four criteria including a track record and the second encompasses three criteria which include implementing and adopting key reforms, such as the Poverty Reduction Strategy Paper.^[85] The UN Deputy Secretary-General Amina J. Mohammed reflects debt relief for Developing Countries which showed that between 2019 and 2021, debt from governments has risen from 58 to 65 per cent in GDP, and the World Bank have predicted at least a billion people would be in extreme poverty, from the war aftermath in Ukraine.^[86] Some suggestions that were made were based on countries having the stability to stable access limits, addressing debt risks early, and aligning financial goals with sustainable development goals.^[86]

Gender equality

Addressing gender equality and empowering women are necessary steps in overcoming poverty and furthering development as supported by the human development and capabilities approach and the Millennium Development Goals.^[92] Disparities in the areas of education, mortality rates, health and other social and economic indicators impose large costs on well-being and health of the poor, which diminishes productivity and the potential to reduce poverty.^[89] The limited opportunities of women in most societies restrict their aptitude to improve economic conditions and access services to enhance their well-being.^[89]

Across the board, a number of industries are stratified across the genders. This is the result of a variety of factors. These include differences in education choices, preferred job and industry, work experience, number of hours worked, and breaks in employment (such as for bearing and raising children). Men also typically go into higher paid and higher risk jobs when compared to women. These factors result in 60% to 75% difference between men's and women's average aggregate wages or salaries, depending on the source. Various explanations for the remaining 25% to 40% have been suggested, including women's lower willingness and ability to negotiate salary and sexual discrimination.^[93][94][95] According to the European Commission direct discrimination only explains a small part of gender wage differences.^[96][97]

Strategies to empower women

Several platforms have been adopted and reiterated across many organizations in support of the empowerment of women with the specific aim of reducing poverty. Encouraging more economic and political participation by women increases financial independence from and social investment in the government, both of which are critical to pulling society out of poverty.^[100]

Climate change adaptation

The increase in extreme weather events, linked to climate change, and resulting disasters is expected to continue. Disasters are a major cause of impoverishment and can reverse progress towards poverty reduction.^[122] A report by the World Bank shows that poor persons are most prone to climate disasters.^[123]

It is predicted that by 2030, 325 million (plus) extremely poor people will be living in the 49 most hazard prone countries. Most of these are located in South Asia and Sub-Saharan Africa.^[122]

A researcher at a leading global think-tank, the Overseas Development Institute, suggests that far more effort should be done to better coordinate and integrate poverty reduction strategies with climate change adaptation.^[124] The two issues are argued to be currently only dealt with in parallel as most poverty reduction strategy papers ignore climate change adaptation altogether, while National Adaptation Programmes of Action (NAPAs) likewise do not deal directly with poverty reduction. Adaptation-poverty linkages were found to be strongest in NAPAs from sub-Saharan Africa LDCs.^[124]

Bicycles

Experiments done in Africa (Uganda and Tanzania) and Sri Lanka on hundreds of households have shown that a bicycle can increase the income of a poor family by as much as 35%.^{[125][126][127]} Transport, if analyzed for the cost-benefit analysis for rural poverty alleviation, has given one of the best returns in this regard. For example, road investments in India were a staggering 3–10 times more effective than almost all other investments and subsidies in rural economy in the decade of the 1990s. What a road does at a macro level to increase transport, the bicycle supports at the micro level. The bicycle, in that sense, can be one of the best means to eradicate poverty in poor nations.

Millennium Development Goals

Eradication of extreme poverty and hunger by 2015 is one of the Millennium Development Goals (MDGs). In addition to broader approaches, the Sachs Report (for the UN Millennium Project)^[128] proposes a series of "quick wins", approaches identified by development experts which would cost relatively little but could have a major constructive effect on world poverty. The quick wins are:

• Access to information on sexual and reproductive health.
• Action against domestic violence.
• Appointing government scientific advisors in every country.
• Deworming school children in affected areas.
• Drugs for AIDS, tuberculosis, and malaria.
• Eliminating school fees.
• Ending user fees for basic health care in developing countries.
• Free school meals for schoolchildren.
• Legislation for women's rights, including rights to property.
• Planting trees.
• Providing soil nutrients to farmers in sub-Saharan Africa.
• Providing mosquito nets.
• Access to electricity, water and sanitation.
• Supporting breast-feeding.
• Training programs for community health in rural areas.
• Upgrading slums, and providing land for public housing.

Sustainable Development Goals

The first of the 17 Sustainable Development Goals (SDGs) calls for an end to poverty by 2030 and seeks to ensure social protection for the poor and supporting people affected by climate-related extreme events.^[129] As the decade that began in 2002, the percentage of the world's population living under the poverty line reduced by half, from 26 per cent to 13 per cent. If the growth rate during those 10 years had prevailed over the next 15 years,^{[clarification needed] [130]} it would be possible to decrease the rate of extreme poverty in the world to 4 per cent by 2030, assuming the growth will benefit all income groups of the population on an equal footing. However, if the growth rate was over a longer period of 20 years, the rate of prevalent global poverty is likely to be about 6 per cent. In other words, the eradication of extreme poverty will require a significant change from its historical growth rates.

Poverty targeting

Poverty reduction requires governments to identify and reach out to extremely poor and help them out of poverty through sustainable measures. One such approach supported by many international donors is of targeted poverty reduction programmes.^[131] There are several poverty targeting methods through which poor communities are identified and tracked for poverty reduction programmes. For instance, one common method of poverty targeting is 'means testing' that uses a certain income or expenditure threshold for an individual or the a household to be considered as poor and eligible for support.^[132]

Global initiatives to end hunger and undernutrition

An important part of the fight against poverty are efforts to end hunger and achieve food security. In April 2012, the Food Assistance Convention was signed, the world's first legally binding international agreement on food aid. The May 2012 Copenhagen Consensus recommended that efforts to combat hunger and malnutrition should be the first priority for politicians and private sector philanthropists looking to maximize the effectiveness of aid spending. They put this ahead of other priorities, like the fight against malaria and AIDS.^[133]

The main global policy to reduce hunger and poverty are the recently approved Sustainable Development Goals. In particular Goal 2: Zero Hunger sets globally agreed targets to end hunger, achieve food security and improved nutrition and promote sustainable agriculture.^[134]

In 2013 Caritas International started a Caritas-wide initiative aimed at ending systemic hunger by 2025. The One human family, food for all campaign focuses on awareness raising, improving the impact of Caritas programs and advocating the implementation of the right to food.^[135]

The partnership Compact2025, led by IFPRI with the involvement of UN organisations, NGOs and private foundations,^[136] develops and disseminates evidence-based advice to politicians and other decision-makers aimed at ending hunger and undernutrition in the coming 10 years, by 2025.^[137]

The EndingHunger campaign is an online communication campaign aimed at raising awareness of the hunger problem. It has many worked through viral videos depicting celebrities voicing their anger about the large number of hungry people in the world.

Another initiative focused on improving the hunger situation by improving nutrition is the Scaling up Nutrition movement (SUN). Started in 2010, this movement of people from governments, civil society, the United Nations, donors, businesses and researchers publishes a yearly progress report on the changes in their 57 partner countries.^[138]

Poverty reduction in China

China's economic growth led to a major decrease in world inequality.^[139]: 202 Since China's Reform and Opening Up, more than 1 billion Chinese people have been lifted out of poverty.^[139]: 202 The majority of global poverty reduction between 1981 and 2008 occurred in China.^[139]: 202 As academic Lan Xiaohuan writes, during that period, "the number of poor people in the world outside China remained more or less unchanged. It can therefore be concluded that achievements in global poverty reduction come mainly from China."^{[139]: 202–203}

Poverty reduction in Taiwan

In spite of the intensive reduction strategies deployed in the previous two decades, poverty levels in several countries of the world has not been reduced.^[140] Recent research has demonstrated that the low wage levels of the needy families have risen gradually, although in some scenarios they have declined.^[141] While wage level is the main median pointer of welfare, such results suggest that past poverty reduction procedures have not been precise. Unless suitable reduction procedures are formulated and implemented in the near future, rustic poverty will probably be a real issue for quite some long time. Families are determined to be low-pay if their monthly income does not surpass the evaluated monthly minimum set by every city or region. To meet the family's essential needs (shelter, food, clothing, and education) in Taipei, one would need to have $337 every month. This sum changes relying upon the city's way of life; for instance, one would just need to have $171 every month to live in Kinmen County.^[142]

Sustained economic growth is noted as the main propelling agent for Poverty Reduction in Taiwan.^[143] While internal FDI has no noteworthy effect on the mean wage of poor people, outward FDI from Taiwan in the previous two decades appears to have adversely affected the poorest 20% of the populace. Poverty in Taiwan has nearly been eliminated, with under 1 per cent of the populace considered as poor or earning the low-level pay. This implies more than 99 per cent of the populace appreciates the advantages of Taiwan's economic flourishing and extraordinarily enhanced personal satisfaction.^[144] Beside lowly-paid families, the government offers support to other individuals, for example, the elderly and the incapacitated, who cannot work. During 1980 to 1999 Taiwanese government developed a program called National Health Insurance program. NHI mainly provides economically disadvantaged people with quality healthcare at an affordable price.^[145] July 1993, the government of Taiwan started giving a monthly sponsorship to elderly people. People beyond 65 years old whose normal family salary is not exactly, or equivalent to, 1.5 times the base monthly costs are fit to get a monthly sponsorship of $174.^[142] Private transfers also play an important role in Taiwan for antipoverty according to the date Taiwan provided to the Luxembourg Income Studies, the results indicates the private transfer has greater impact than public transfers in terms of proving welfare state.^[146]

In 1999, the government of Taiwan spent US$5.08 billion on social welfare projects and offered numerous sorts of assistance to people and families from low-pay sets.^[144] Notwithstanding money, assistance to get employment is given to the breadwinners in families, alongside educational guide for school-age children and well-being programs for women and children. In addition, there are additionally community associations, scholastic organizations, and private establishments arranged by government offices to help needy people. In principle, Taiwan is currently a liberal and elections based society. Hence social versatility ought to be the standard.^[142] Notably, as per an investigation of extra cash in Taiwan by the Directorate General of Budget, Accounting and Statistics, families with the most astounding dispensable salaries number 2.6 people, while families with the least discretionary cash flow number 4.7 people.^[142] With rising costs of simple commodities and privatization of the training market, economically distraught families will end up in an undeniably hard position to educate their own children. However, this type of social welfare will significantly lower the Taiwan's revenue. Due to the slow economic development in the past years, this method will no longer close the income inequality or reduce the unemployment rate effectively in the future.^[147]

Business solutions to poverty

The concept of business serving the world's poorest four billion or so people has been popular since CK Prahalad introduced the idea through his book Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits in 2004, among many business corporations and business schools.^[148][149] Kash Rangan, John Quelch, and other faculty members at the Global Poverty Project at Harvard Business School "believe that in pursuing its own self-interest in opening and expanding the BoP market, business can make a profit while serving the poorest of consumers and contributing to development."^[150] According to Rangan "For business, the bulk of emerging markets worldwide is at the bottom of the pyramid so it makes good business sense – not a sense of do-gooding – to go after it."^[150]

In their 2013 book, The Business Solution to Poverty, Paul Polak and Mal Warwick directly addressed the criticism leveled against Prahalad's concept.^[151] They noted that big business often failed to create products that actually met the needs and desires of the customers who lived at the bottom-of-the-pyramid. Their answer was that a business that wanted to succeed in that market had to spend time talking to and understanding those customers. Polak had previously promoted this approach in his previous book, Out of Poverty, that described the work of International Development Enterprises (iDE), which he had formed in 1982.^[152] Polak and Warwick provided practical advice: a product needed to affect at least a billion people (i.e., have universal appeal), it had to be able to be delivered to customers living where there was not a FedEx office or even a road, and it had to be "radically affordable" to attract someone who earned less than $2 a day.

Rather than encouraging multinational businesses to meet the needs of the poor, some organizations such as iDE, the World Resources Institute, and the United Nations Development Programme began to focus on working directly with helping bottom-of-the-pyramid populations become local, small-scale entrepreneurs.^[154] Since so much of this population is engaged in agriculture, these NGOs have addressed market gaps that enable small-scale (i.e., plots less than 2 hectares) farmers to increase their production and find markets for their harvests. This is done by increasing the availability of farming equipment (e.g., pumps, tillers, seeders) and better quality seed and fertilizer, as well as expanding access for training in farming best practices (e.g., crop rotation).

Creating entrepreneurs through microfinance can produce unintended outcomes: Some entrepreneurial borrowers become informal intermediaries between microfinance initiatives and poorer micro-entrepreneurs. Those who more easily qualify for microfinance split loans into smaller credit to even poorer borrowers. Informal intermediation ranges from casual intermediaries at the good or benign end of the spectrum to 'loan sharks' at the professional and sometimes criminal end of the spectrum.^[155]

Milton Friedman argues that the social responsibility of business is to increase its profits only;^[156] thus, it needs to be examined whether business in BoP markets is capable of achieving the dual objective of making a profit while serving the poorest of consumers and contributing to development? Erik Simanis has reported that the model has a fatal flaw. According to Simanis:^[157]

Despite achieving healthy penetration rates of 5% to 10% in four test markets, for instance, Procter & Gamble couldn't generate a competitive return on its Pur water-purification powder after launching the product on a large scale in 2001... DuPont ran into similar problems with a venture piloted from 2006 to 2008 in Andhra Pradesh, India, by its subsidiary Solae, a global manufacturer of soy protein ... Because the high costs of doing business among the very poor demand a high contribution per transaction, companies must embrace the reality that high margins and price points aren't just a top-of-the-pyramid phenomenon; they're also a necessity for ensuring sustainable businesses at the bottom of the pyramid.

Marc Gunther states that "The bottom-of-the-pyramid (BOP) market leader, arguably, is Unilever ... Its signature BOP product is Pureit, a countertop water-purification system sold in India, Africa and Latin America. It's saving lives, but it's not making money for shareholders."^[149] This leaves the ideal of eradicating poverty through profits or with a good business sense – not a sense of do-gooding rather questionable.

Others have noted that relying on BoP consumers to choose to purchase items that increase their incomes is naive. Poor consumers may spend their income disproportionately on events or goods and services that offer short-term benefits rather than invest in things that could change their lives in the long-term.^[158]