In addition to the international poverty line of $2.15 per day, the World Bank will now monitor poverty at a higher threshold, typical of upper-middle-income countries, currently set at $6.85 per day.
Experts at the institution point out that both poverty lines are still expressed in 2017 Purchasing Power Parity (PPP) dollars per person.
Many observers of the world’s financial issues question the need for such a definition of poverty, in a global context marked by multidimensional tensions.
For the institution, the broadening of this definition takes account of changing demographic trends around the world, in line with its new, broader vision of creating a poverty-free world on a liveable planet.
In support of its thesis, the Bretton Woods institution maintains that since the one dollar a day poverty line was set in 1990, the planet has been monitoring extreme poverty using a poverty line in line with the poverty standards of the poorest countries.
Indeed, the dollar-a-day line has evolved over the years to reach $2.15, which, by definition, is the estimated minimum daily amount needed in a typical low-income country to cover basic needs, typically food, shelter and clothing.
Demographic boom: the key reason!
The World Bank reports that over the past few decades, the world’s demographic structure has changed considerably.
For example, between 1990 and 2024, the world’s population grew by 2.8 billion, or more than 50%, to over 8 billion.
In 1990, almost 6 out of 10 people lived in low-income countries. Low-income countries were also home to more than 9 out of every 10 extremely poor people in the world.
Consequently, it made perfect sense for the World Bank to set a poverty line that reflected poverty levels in the poorest countries.
These days,” continue the experts, ”lower- and upper-middle-income countries account for more than three-quarters of the world’s population.
Many countries, particularly populous ones such as China and India, have gone from being low-income countries to lower- and upper-middle-income countries.
Today, low-income countries account for just 9% of the world’s population.
For middle-income countries, the extreme poverty line may be too low to give an accurate picture of poverty.
In view of the changing situation illustrated, several of the institution’s publications and work will therefore take into account the poverty line for the upper $6.85 a day bracket.
“As income levels rise, the definition of basic needs extends beyond food, clothing and shelter, and now also includes healthy food, good sanitation, an Internet connection, access to electricity and education, among others. The $6.85 poverty line is an absolute poverty line that reflects this broader definition of poverty, and provides a more relevant picture of poverty in more regions,” says the World Bank.
Flory Musiswa