Another 165 million people join more than one billion in poverty as cost of government debt servicing soars

Figures released by the United Nations Development Programme (UNDP)

The figures released by the United Nations Development Programme (UNDP) reveal the devastating impact on the world’s poorest people of the “polycrisis”.

The Polycrisis

The term “polycrisis” refers to a combination of crises, including the COVID-19 pandemic, the cost-of-living crisis, inflation, rising interest rates, the surge in the value of the US dollar, the US-NATO led war in Ukraine against Russia, and the fallout from disasters exacerbated by climate change.

Poverty Rates

Poverty rates, as measured by the number of people living on less than $3.65 a day, have surged over the three-year period 2020-23, with an additional 165 million thrown into poverty.

Projections for Recovery

The UNDP’s new policy brief, “The Human Cost of Inaction: Poverty, Social Protection and Debt Servicing, 2020–2023,” predicts that the poorest 10 percent of the world’s population will be the only group not to have recovered its pre-pandemic, real terms per capita income by 2023. Within low-income countries, the bottom half of the population will remain below pre-pandemic levels.

Decline in Human Development Index

There has been a shocking decline in the global Human Development Index (HDI), which measures average achievement in three basic dimensions: a long and healthy life, knowledge, and a decent standard of living. It has declined for two years in a row, for the first time ever.

Multidimensional Poverty Index (MPI)

According to the UNDP’s 2023 survey, 1.1 billion out of 6.1 billion people (just over 18 percent) live in acute multidimensional poverty. Sub-Saharan Africa (534 million) and South Asia (389 million) are home to approximately five out of every six poor people.

Impact on Children

The young generation is the worst affected, with children under 18 years old accounting for a staggering half of MPI-poor people (566 million). Poverty predominantly affects rural areas across all regions of the world, with 84 percent of the world’s poor living in rural areas.

Public Debt and Debt Servicing

The level of public debt has been on the rise worldwide, and developing countries owe almost 30 percent of the total. Debt servicing is replacing the already meagre amounts spent on health, education, and social protection, severely impacting efforts to mitigate loss of income, unemployment, and poverty.

Hunger and Food Insecurity

The increase in poverty has translated into up to 783 million people facing hunger in 2022 and 600 million people chronically undernourished by 2030. Food and energy giants have more than doubled their profits in 2022, while billions struggle to afford a healthy diet.

The Cost of Debt Servicing

Low-income countries are spending twice as much on servicing debt as they spend on social assistance and 1.4 times more than on healthcare. The cost of debt servicing is typically equal to 60 percent of education expenditure.

The Solution

The Global Crisis Response Group calculates that it would cost around $14 billion, or 0.009 percent of global GDP in 2022, to alleviate this surge of poverty and lift the 165 million people above $3.65 a day. However, the economic system that produces phenomenal wealth for the world’s elite and hunger for billions will not tolerate such a solution.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 2: Zero Hunger
• SDG 3: Good Health and Well-being
• SDG 4: Quality Education
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities
• SDG 13: Climate Action
• SDG 16: Peace, Justice, and Strong Institutions

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.1: By 2030, eradicate extreme poverty for all people everywhere.
• Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
• Target 3.2: By 2030, end preventable deaths of newborns and children under 5 years of age.
• Target 4.1: By 2030, ensure that all girls and boys complete free, equitable, and quality primary and secondary education leading to relevant and effective learning outcomes.
• Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
• Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 percent of the population at a rate higher than the national average.
• Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
• Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.1.1: Proportion of population below the international poverty line, by sex, age, employment status, and geographical location.
• Indicator 2.1.1: Prevalence of undernourishment.
• Indicator 3.2.1: Under-5 mortality rate.
• Indicator 4.1.1: Proportion of children and young people (a) in grades 2/3; (b) at the end of primary; and (c) at the end of lower secondary achieving at least a minimum proficiency level in (i) reading and (ii) mathematics, by sex.
• Indicator 8.1.1: Annual growth rate of real GDP per capita.
• Indicator 10.1.1: Growth rates of household expenditure or income per capita among the bottom 40 percent of the population and the total population.
• Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
• Indicator 16.3.1: Proportion of victims of violence in the previous 12 months who reported their victimization to competent authorities or other officially recognized mechanisms.

Table: SDGs, Targets, and Indicators