What Is the Global Poverty Rate?

The global poverty rate is defined as the percent of the global population living below the international poverty line of $1.90 a day. Currently, an estimated 9.2% of the world’s population live below this poverty line1 established by the World Bank. That means with the current world population of 7.6 billion, the number of people living in extreme poverty exceeds 689 million.

Global organizations and ministries like Compassion International closely monitor the global poverty rate to identify which poverty reduction strategies are working — and which ones are not. Measuring poverty provides the information and education needed to find the most effective poverty reduction methods.

According to a poll of top development economists, Child sponsorship is the most effective long-term development intervention for fighting poverty and helping the poor.2

While the number of people living in poverty had slowly been declining for the past decade, COVID-19 has reversed that trend. Already, 120 million people have been driven into poverty by the pandemic, and the World Bank expects those numbers to climb to around 150 million. 1

The goal established by the United Nations in 2015, to bring the world poverty rate under 3% by 2030 was at risk of not being met before the pandemic and is now viewed as possible only with dramatic actions and policy changes by world governments.

Middle-income countries, including Brazil and the Philippines, will likely see the highest increase in poverty rates in the coming years.3 This increase is predicted despite the significant progress made against poverty in middle-income countries in recent years. The countries’ past progress doesn’t mean people escaped poverty into an economically secure life. In fact, many aren’t far removed from what they left behind. A major crisis, like COVID-19, can suck hundreds of millions of people back into poverty.

How Do We Measure Poverty?

While poverty is often measured economically, specifically with the World Bank’s international poverty line, this metric has often been criticized because it does not consider all of the ways true poverty can affect quality of life. There are a variety of additional ways to define global poverty and calculate its impact, including:

  • Educational outcomes
  • Access to health care
  • A country’s economic growth
  • Examining rural and urban poverty rates
  • Access to government services

What Affects the Global Poverty Rate?

Depending on the region, there are a wide variety of indicators for poverty relevant to the different causes of poverty. Below, we have listed a few ways people are frequently driven into poverty, or deeper into it, and how addressing them can drive the poverty rate down again.

Access to Clean Water and Nutritious Food

Lack of food security and clean water are two big reasons why children and their families struggle to break free from a life of inequality and marginalization to experience the opposite of poverty — a life in which enough food, clean water, opportunity, etc. is available to render the disadvantages of poverty harmless.

A person who doesn’t have nutritious food or safe water can struggle to find work. They most likely will not have access to proper sanitation facilities and will be more prone to waterborne diseases, and precious resources will go to medical care.

Collecting clean water also takes valuable time, mostly for women and girls. In sub-Saharan Africa, for example, for 29% of the population (37% in rural areas and 14% in urban areas), improved drinking water sources are 30 minutes or more away.4 The UN estimates that, collectively, 200 million hours are spent collecting water every day. 4

Inequality in Education

The majority of people living in poverty have extreme obstacles to education.

  • In border communities, refugees have no access to education.
  • Many poor families don’t see a benefit to educating their daughters, not understanding that educating them can help break generational poverty.
  • Other families simply can’t afford school supplies or fees.
  • UNESCO estimates that 171 million people could be lifted out of extreme poverty if they left school with basic reading skills, 5 and world poverty could be cut in half if all adults completed secondary education.6
Lack of Access to Medical Care

The link between poverty and health is undeniable. In countries where health systems are weak, easily preventable and treatable illnesses like malaria, diarrhea and respiratory infections can be fatal — especially for young children.

In rural communities especially, people must travel far from home, adding transportation costs to fees associated with doctor visits and medications. Many must choose between food and medical care, an impossible decision.

Statistics on Global Poverty

  • In 2018, 4 out of 5 people below the international poverty line lived in rural areas.6
  • Half of the world’s poor are children.7
  • Nearly 70% of the global poor age 15 and older have no schooling or only some basic education.7
  • Almost half of poor people in sub-Saharan Africa live in just five countries:7
    • Nigeria.
    • The Democratic Republic of Congo.
    • Tanzania.
    • Ethiopia.
    • Madagascar.
  • About 132 million of the global poor live in areas with high flood risk.7

Frequently Asked Questions About the Global Poverty Rate and World Poverty

How is the global poverty rate determined?

The global poverty rate is determined by examining the national poverty lines of the world’s poorest countries. The lines are converted to a common currency by using purchasing power parity (PPP) exchange rates set up to price the same quantity of goods and services equally across countries.

The national poverty lines reflect the point below which a person’s minimum food, clothing and shelter needs cannot be met in that country.

How often is the poverty rate assessed? How is it reported and communicated?

The current poverty line of $1.90 was set using 2011 PPP. National poverty lines are monitored regularly, and the poverty line was adjusted from $1.25 to $1.90 in 2015.

The World Bank Group monitors progress and poverty reduction strategies and has taken on the goal of measuring poverty regularly. They produce twice-yearly Poverty and Equity Briefs, and conduct surveys in the world’s poorest countries. Reports are made available to the public via worldbank.org and the news media.

At what rate are people dying from poverty each year?

Because many people living in poverty have little to no access to medical care, it is very difficult to measure the rate at which people are dying from poverty. Records don’t exist.

We do know that 25,000 people die every day due to hunger;8 435,000 people die from malaria, a preventable and treatable disease, each year; indoor air pollution, mainly caused by indoor cooking fires, claims the lives of 1.5 million people each year.9

At what rate is poverty increasing or decreasing in the world?

Globally, the number of people living in extreme poverty fell by more than 1 billion between 1990 and 2015, falling from 1.9 billion in 1990 to 0.73 billion in 2015.

On average, extreme poverty rates have declined by 47 million every year since 1990. That means that the number of those living in extreme poverty declined by 130,000 people daily.10 However, COVID-19 is reversing decades of progress made in the fight against poverty around the world. 2020 marked the first increase in the poverty rate in more than 20 years.11

Which countries in the world have the highest poverty rates?

According to the World Bank,12 the countries with the highest poverty rates are:

  • Equatorial Guinea (76.8%).
  • South Sudan (76.4%).
  • Madagascar (70.7%).
  • Guinea-Bissau (69.3%).

What Is Compassion Doing to Drive Down Poverty – and How Can YOU Help?

Compassion International is a Christian holistic child development ministry working to release millions of children from poverty. Nearly 70 years of child development experience has shaped Compassion’s understanding of poverty.

While every child in our sponsorship program falls under the poverty line, we also believe that poverty is defined by social/relational poverty, emotional poverty (impoverished identity or self-view), cognitive poverty and spiritual poverty.

Compassion’s Child Sponsorship Program is a holistic, long-term approach to breaking the generational cycle of poverty. The program allows a sponsor to invest in the life of a child through a monthly commitment that provides the child with physical, social, spiritual and economic care and training.

For decades, Compassion has partnered with churches in some of the poorest communities in the world, and we have researched the trends in those communities that can lift children out of poverty. Many of the graduates of our programs have gone on to become teachers, doctors and business owners — and often volunteer at the very Compassion center where they found hope and release from poverty!

Children in the Compassion Child Sponsorship Program receive:

  • Financial aid needed for formal primary and secondary school expenses such as textbooks, uniform, lab fees and tuition
  • Access to non-formal education, including vocational training and apprenticeships, as well as assistance with tutoring and fees for entrance exams
  • Service activities
  • Extracurricular activities, including sports, field trips, the arts and computers
  • The completion of a life-planning document that helps youths ages 12 and up think ahead and identify their own developmental path
  • Immunizations and treatment for injuries and illnesses
  • Supplemental nutrition as needed
  • Supplemental nutrition as needed
  • Love, protection and individualized care from local church staff and volunteers who know each child by name

When you sponsor a child with Compassion, you are partnering with a ministry whose very mission is driving down the world poverty rate one child, one family and one community at a time.

Sponsor a Child Today!

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Sources:

1 Measuring Poverty. World Bank, https://www.worldbank.org/en/topic/measuringpoverty

2 Wydick, B. (2012, February 17). Cost-Effective Compassion: The 10 Most Popular Strategies for Helping the Poor. ChristianityToday.com. https://www.christianitytoday.com/ct/2012/february/popular-strategies-helping-the-poor.html.

3 “Middle-income countries at risk of dramatic increases in poverty, report finds.” Devex, www.devex.com/news/middle-income-countries-at-risk-of-dramatic-increases-in-poverty-report-finds-97449

4 UNICEF: Collecting water is often a colossal waste of time for women and girls. UNICEF, https://www.unicef.org/press-releases/unicef-collecting-water-often-colossal-waste-time-women-and-girls

5 Education for All Global Monitoring Report. UNESCO, www.unesco.org/new/fileadmin/MULTIMEDIA/HQ/ED/pdf/gmr-ec-1-books.pdf

6 World Poverty Could Be Cut in Half if All Adults Completed Secondary Education. UNESCO UIS. (2017, July 11). http://uis.unesco.org/en/news/world-poverty-could-be-cut-half-if-all-adults-completed-secondary-education.

7 Poverty Overview. World Bank, https://www.worldbank.org/en/topic/poverty/overview

8 “Losing 25,000 to Hunger Every Day.” United Nations, www.un.org/en/chronicle/article/losing-25000-hunger-every-day

9 Poverty Facts and Stats. https://www.globalissues.org/article/26/poverty-facts-and-stats

10 Global Extreme Poverty, Our World in Data. https://ourworldindata.org/extreme-poverty

11 COVID-19 to Add as Many as 150 Million Extreme Poor by 2021, The World Bank, 7 Oct. 2020, www.worldbank.org/en/news/press-release/2020/10/07/covid-19-to-add-as-many-as-150-million-extreme-poor-by-2021.

12 Poverty headcount ration at national poverty lines (% of population). World Bank, https://data.worldbank.org/indicator/SI.POV.NAHC