Progress in poverty reduction through the Millennium Development Goals

Efforts to combat extreme poverty have shown significant results over recent decades, largely driven by international initiatives like the Millennium Development Goals (MDGs). These goals, set to span from 1990 to 2015, aimed to halve the proportion of people living in extreme poverty worldwide, among other targets.

Key achievements in reducing extreme poverty

• Decline in extreme poverty - The number of individuals living in extreme poverty dropped from 1.7 billion in 1990 to approximately 790 million by 2015.
• Percentage reduction in low-income countries (LICs) - In LICs, the proportion of people in extreme poverty fell dramatically from 55% in 1990 to 12% in 2015.
• Global population trends - Despite population growth, the overall percentage of people in poverty has decreased, reflecting improved living standards in many regions.

The growth of the global middle class and its economic impact

The global middle class has expanded significantly, becoming a key driver of economic activity. Defined often as those with an annual per capita expenditure between certain thresholds, this group has influenced consumption patterns worldwide.

Trends in middle-class expansion

• Increase in numbers - By 2009, the middle class comprised around 2.1 billion people, predominantly in regions like Europe, Asia, and North America.
• Economic influence - This growing sector boosts demand for consumer goods, with sales of items like vehicles and electronics surging. For instance, car and motorbike sales rose by over 680% between 2009 and 2015.
• Projected growth - Projections suggest that by 2030, the middle class could reach nearly 5.1 billion people, representing a significant portion of the global population of about 7.8 billion.

Income distribution over time

Regional contributions to the rising middle class

The growth of the middle class is not uniform across the globe, with certain regions contributing more significantly to this trend. This uneven distribution highlights the varying pace of economic development worldwide.

Regional shares in middle-class growth

• Asia Pacific dominance - This region has been the largest contributor, accounting for over 75% of the new middle class in 2000, though its share is expected to decline to around 60% by 2050 due to growth in other areas.
• Emerging regions - Areas like Sub-Saharan Africa, the Middle East and North Africa (MENA), and Central & South America show increasing contributions, reflecting gradual economic improvements.
• Significant shifts - The rapid rise in middle-class numbers in countries like China and India is expected to reduce the proportion of their populations below the middle-income threshold by 75% by 2030.

Challenges and vulnerabilities within the middle class and poverty reduction efforts

Despite the progress in poverty reduction and middle-class growth, significant challenges remain. Economic security is not guaranteed for all within the middle class, and poverty reduction has not been evenly achieved.

Persistent issues in economic development

• Vulnerability in the middle class - Many individuals earning above $4 per day still face risks of unemployment and underemployment, particularly those in informal sectors, lacking stable income or job security.
• Uneven poverty reduction - Over 750 million people continue to live in extreme poverty, indicating that global efforts have not reached all populations equally.
• Workplace safety concerns - Approximately half of the world's workers are employed in unsafe conditions, highlighting a critical area for improvement in labour standards.
• Historical disparities - Economic growth trajectories vary widely, as seen in comparisons like Brazil and South Korea. By the 1980s, South Korea's middle class exceeded 55% of its population, while Brazil's remained below 25%, despite similar starting points in the 1960s.