Beyond the Poverty Line: Understanding Trends, Challenges, and Global Response

Executive Summary

Global poverty remains a critical issue, with approximately 838 million individuals living in extreme poverty—defined as subsisting on less than USD 3.00 per day. This figure accounts for nearly 10% of the global population, underscoring the widespread economic hardship faced worldwide. In addition to income-based poverty, approximately 1.1 billion people experience multidimensional poverty, which encompasses inadequate access to education, healthcare, and basic living conditions. The complexity of poverty measurement is evident in the differing poverty lines; for example, when applying a higher threshold of USD 6.85 per day, nearly 3.5 billion people—almost half of the global population—are classified as poor.

Efforts to alleviate poverty have yielded mixed outcomes. While an estimated 69 million people are expected to escape extreme poverty by 2030, this figure pales in comparison to the 150 million who achieved this status between 2013 and 2019. The momentum of poverty reduction has slowed due to global challenges, including the COVID-19 pandemic, inflation, and geopolitical conflicts such as the Russo-Ukrainian war. Sub-Saharan Africa remains the most severely impacted region, housing two-thirds of the world's poorest population, followed by South Asia and parts of the Middle East. Additionally, global inequality remains pronounced, with 10% of the population holding 75% of total wealth, while 50% own a mere 2%, emphasizing the urgent need for coordinated international action. This article examines the various forms of poverty, its geographic distribution, contributing factors, and the global efforts and challenges in addressing this pressing issue.

Introduction

Poverty is often viewed as a fundamental characteristic of society, existing alongside wealth, disparities in income, and unequal distribution of resources. The uneven allocation of wealth has been a critical issue throughout human history; however, the nature, underlying causes, and scale of poverty have evolved over the years. Poverty raises concerns not only in relative terms, where individuals' economic situations are compared to those of others, but also as an absolute concept. Approximately 838 million people around the world endure "extreme poverty," a condition defined as living on less than USD 3.00 per day. This alarming figure not only represents a staggering 10% of the global population but also underscores the severe hardships faced by millions. Moreover, it's important to consider "multidimensional poverty," which encompasses various factors beyond simple income measures. This broader view assesses individuals' health, education, and living conditions, with an estimated 1.1 billion people affected by this more comprehensive form of poverty. Notably, the classification of individuals as impoverished can fluctuate significantly depending on the poverty line and criteria applied, highlighting the complexity and variability of assessing poverty across different contexts and societies. This article explores global poverty conditions, focusing on geographic spread, climate change, and political dimensions that necessitate urgent and coordinated international efforts.

Different Forms of Poverty and Their Reasons

Poverty can be broadly categorized into two main types: absolute poverty and relative poverty. Absolute poverty is primarily evaluated based on income levels, which indicate a person's ability to meet their basic needs for survival. Historically, the global poverty line was set at USD 2.15 per day; however, this benchmark has been revised upward to USD 3.00 per day to reflect changing economic conditions and the rising cost of living. This form of poverty is often described as extreme poverty, a dire circumstance in which individuals are deprived of the fundamental resources required for their survival, including food, shelter, and basic sanitation. In contrast, relative poverty examines an individual's economic status in relation to societal standards, indicating that their financial resources fall below the minimum level deemed acceptable by the community to which they belong. Extreme poverty is particularly alarming as it often coexists with significant barriers to accessing vital services such as education and healthcare. It also frequently results in insufficient nutrition and a lack of clean drinking water, which are critical for maintaining health and well-being.

Moreover, the challenges faced by those living in extreme poverty are often exacerbated by broader systemic issues, including armed conflict, the impacts of climate change, and social exclusion. These factors create a cycle of disadvantage that can hinder individuals and communities from breaking free from the grips of poverty, underlining the urgent need for comprehensive strategies to address both the symptoms and root causes of extreme poverty.  

However, living standards and costs vary significantly from one country to another, which influences how poverty is assessed. Consequently, a higher threshold of USD 6.85 per day may reveal a more alarming scenario. According to a World Bank report, approximately 3.5 billion people—nearly half of the global population—are classified as poor when compared to the poverty standards of upper-middle-income countries.

Figure 1: Global extreme poverty data over the years; source: Poverty, Prosperity, and Planet Report 2024

It is estimated that by 2030, 622 million people will still be living in extreme poverty. However, there is some positive news: a report from the World Bank predicts that 69 million individuals are expected to escape extreme poverty by that year. Nonetheless, this figure is significantly lower than the 150 million people who moved out of extreme poverty between 2013 and 2019. Therefore, while the overall number of people living in extreme poverty is declining, the pace of this transition remains insufficient. The post-pandemic economic downturn, high inflation, followed by crises such as the Russo-Ukraine war and the conflicts in the Middle East, have adversely affected national and international efforts to reduce poverty.

Relative poverty is characterized by an unequal distribution of wealth. It is a widely accepted premise that significant inequality exists in the distribution of wealth between the Global North and the Global South. Recently, the average income in developing countries has decreased, largely due to remarkable economic growth in China and other major emerging markets. Nevertheless, it is estimated that 71% of the population resides in countries where inequality has risen—indicating that disparities exist both within and between nations. The unequal distribution of global wealth is illustrated in Figure 2, which shows that 10% of the population owns 75% of the total wealth, while 50% of the population possesses only 2% of it.

Figure 2: Distribution of wealth; source: Home - WID - World Inequality Database

Geographic Distribution of Poverty

Extreme poverty casts a long shadow over Sub-Saharan Africa, where two-thirds of the globe's poorest population resides. South Asia also harbors a significant share of poverty, with its densely populated areas facing pressing challenges. Within these vast regions, certain countries are ravaged by conflict, like South Sudan, the Democratic Republic of Congo, and the Central African Republic.

Table 1 illustrates the distribution of extreme poverty across different regions of the world. It reveals that the African continent has the highest number of individuals living in extreme poverty. The Sub-Saharan region, along with Western and Central Africa and Eastern and Southern Africa, collectively accounts for approximately 2.6 billion people in poverty. In contrast, South Asia and the entire Middle East, including Afghanistan and Pakistan, contribute an additional 1.2 billion impoverished individuals. It is important to note that these regions are characterized by high population densities, unlike South America and the Caribbean, which, despite their smaller populations, still host a significant number of poor people.

Table 1: Global distribution of extreme poverty; https://blogs.worldbank.org/en/opendata/september-2025-global-poverty-update-from-the-world-bank--new-da

Figure 3: Distribution of poverty in various regions; source: Where in the world do the poor live? It depends on how poverty is defined

Figure 2 illustrates a comparison of poverty distribution between 1990 and 2019. In 1990, East Asia accounted for the largest share of the world's poor, with 53%. However, by 2019, Sub-Saharan Africa emerged as the region with the highest proportion of impoverished individuals, rising to 59%.

The Main Reasons Behind Global Poverty

Nobel laureate Amartya Sen's groundbreaking theory of poverty and inequality revolutionizes our understanding of poverty by framing it not just as a lack of income, but as a deprivation of fundamental capabilities—the essential freedoms individuals need to lead a fulfilling life. He introduced the concept of the capability approach, which highlights that income should be viewed as a means to achieve greater ends, rather than an ultimate goal in itself. This approach broadens our perspective to include critical factors such as education, health, and political engagement.

Sen argues that social and economic inequalities, particularly those based on gender, are crucial to comprehending the deprivation of capabilities and achieving true development framed as freedom—not merely as economic growth. It's not only about the sheer amount of resources a country or region possesses; it's equally important how these resources are harnessed to uplift the capabilities of its people. Consequently, poverty arises not from a singular cause, but from a complex interplay of diverse factors. Recent advancements in this field highlighted the need to incorporate relational and structural inequalities, arguing that poverty is not only a lack of capabilities but also a result of systemic oppression and exclusion. This has led to calls for a more intersectional and group-based analysis of capability deprivation, especially in diverse societies. There is also growing interest in integrating Sen's pluralistic model with Martha Nussbaum's universalist framework, creating a hybrid approach that balances individual agency with structured entitlements. This integration is seen as a promising path to address multidimensional poverty, particularly in the Global South.

It is important to consider the historical context of the nations currently grappling with high levels of poverty. Most, if not all, of these countries have a colonial past. Even after gaining independence, they struggled to establish robust structural and institutional frameworks to enhance the production and distribution of food and other essential resources to the broader population. Many lack a solid industrial base necessary for generating employment, while others face severe weather challenges that negatively impact their agricultural output. Sub-Saharan regions consistently deal with drought issues, whereas South Asia faces its own challenges with floods and cyclones. Climate change is further exacerbating these circumstances, as countries become increasingly vulnerable to extreme weather events, leading to deteriorating economic conditions.

It is essential to note that the majority of countries, with a few notable exceptions, such as India, face challenges related to governance and the functioning of democracy. Repeated military interventions, authoritarian regimes, and a lack of strategic vision have hindered their economic development and inclusive growth. As a result, civil and military bureaucracies, along with a small circle of cronies close to those in power, have reaped the benefits of the limited economic progress achieved by these nations.

It is crucial to acknowledge the deficiencies in social reform that these nations have faced over the years. Religious extremism, along with ethnic and tribal tensions, has undermined social cohesion and inhibited inclusive economic activities. Countries in the Sub-Saharan region, as well as other parts of Africa, have a long and tumultuous history of civil wars and tribal conflicts. Similarly, wars, conflicts, and political instability have hindered development in South Asian countries.

Future of Global Poverty and Policy Measures

The United Nations Sustainable Development Goals (SDGs) represent a unified global initiative aimed at fostering inclusive development and growth by reducing poverty and inequality. Goal 1: No Poverty, for instance, has galvanized international action since 2015. The 2025 SDG Report indicates some progress in areas such as social inclusion, gender equality, and poverty alleviation. Additionally, there have been advancements in expanding access to education, healthcare, and financial services, as well as promoting inclusive economic growth.

However, despite these noteworthy advancements, achieving the SDGs by 2030 remains a formidable challenge. Currently, only 18% of SDG targets are on track, while nearly 50% are progressing too slowly, and 17% have actually regressed since 2015. Extreme poverty continues to be a persistent issue, showing only marginal improvement from 8.4% in 2015. The slow recovery from COVID-19, coupled with economic volatility and climate shocks, has disproportionately impacted low-income and conflict-prone regions, especially in Sub-Saharan Africa and parts of South Asia.

Key structural challenges to achieving the SDGs include insufficient financing, gaps in data, and geopolitical instability. The UN Statistics Division has noted that the declining international support for data infrastructure in low- and middle-income countries is undermining the monitoring and accountability of the SDGs. Furthermore, climate change, armed conflict, and rising inequality are interrelated obstacles that hinder progress across multiple goals. The World Economic Forum warns that without urgent reforms in global cooperation, food systems, energy access, and social protection, the SDGs risk becoming unattainable within the next five years. These findings highlight the pressing need for integrated, data-driven, and context-sensitive strategies to accelerate sustainable development.

Dr Bidit L. Dey

Professor of Marketing

Northumbria University, UK

LinkedIn: Bidit Dey | LinkedIn