A new World Bank report has revealed a sobering outlook for poverty eradication, projecting that 622 million people will still live in extreme poverty by 2030 despite decades of global efforts to end hunger and starvation.
This stark reality underscores the worsening challenges faced by emerging economies, which were once hailed as engines of global progress but are now falling further behind in the race toward sustainable development.
The World Bank’s latest Global Economic Prospects report attributes this grim projection to a combination of weak economic growth, low investment, stalled reforms, and the escalating impacts of climate change. Over the last 15 years, the growth trajectory of developing economies has slowed to its weakest pace since the turn of the century. Without a significant turnaround, only six of today’s 26 low-income countries are expected to achieve middle-income status by 2050. Meanwhile, malnutrition and hunger are expected to persist at alarming levels, further entrenching poverty cycles.
The challenges are particularly pronounced for low-income economies, which house more than 40 per cent of the global population living on less than $2.15 a day. These economies have made minimal progress in reducing poverty, with average inflation-adjusted GDP per capita growing by less than 0.1 per cent annually over the last 15 years.
Conflicts, economic instability, and limited fiscal capacity have stalled their ability to implement reforms and foster growth.
Developing economies began the 21st century with remarkable momentum, doubling their share of global GDP from 25 per cent in 2000 to nearly 50 per cent today. Much of this progress, however, occurred in the years leading up to the 2008-2009 global financial crisis.
It noted that growth rates have declined sharply from 5.9 per cent in the 2000s to 3.5 per cent in the 2020s. The COVID-19 pandemic further exacerbated the situation, amplifying public debt levels and stalling domestic reforms.
Trade, a critical engine of growth for developing economies, has also faltered. Foreign direct investment inflows into these economies are now at half the levels seen in the 2000s, while new trade restrictions in 2024 were five times the annual average of the previous decade. This loss of momentum has left many developing nations ill-equipped to cope with rising economic challenges, widening the income gap with advanced economies.
Yet, the report further identified a path forward for developing economies to address these challenges and reduce extreme poverty. One key recommendation is to strengthen economic ties with other developing nations.
“Currently, more than 40 per cent of exports from developing economies go to other developing economies, a significant increase from 20 years ago. By deepening trade relationships and attracting intra-regional investment, these economies can foster shared growth and reduce their reliance on advanced economies,” it stated.
The report also stressed the need for domestic reforms to modernise infrastructure, improve human capital, and accelerate the transition to climate-resilient economies. These measures, if implemented effectively, could unlock productivity gains and enhance economic resilience.
While the growth of advanced economies like the United States, the euro area, and Japan continues to impact developing economies, the dependency is less pronounced than in previous decades. This shift presents an opportunity for developing economies to take greater control of their economic destinies.
With global economic growth expected to stabilise at 2.7 per cent in 2025, developing economies have a limited window of opportunity to act.
The report warned that in an era of high global uncertainty, complacency is not an option. Without bold reforms and strategic policies, the ambitious poverty eradication goals of the past will remain out of reach. To prevent 622 million people from remaining in extreme poverty by 2030, urgent and coordinated action is required now.
