25 September 2019: The world is “significantly off track” to achieve SDG 1 (no poverty), the latest Overseas Development Institute (ODI) assessment finds, estimating that 430 million people will still live in extreme poverty by 2030. According to ODI, most countries can afford the investment to end extreme poverty if they maximize taxation and allocate 50% of public spending to human development. However, 46 countries will face a £222 billion funding shortfall.

The report reiterates the findings of the UN Secretary-General’s 2019 SDG Progress Report, noting that, of the world’s people: 1 in 12 are living in extreme poverty; one in nine are hungry; 50% lack essential healthcare; 50% are not covered by social protection; and one in five children does not attend school.

The authors predict that economic growth will cut poverty rates by one-third by 2030, with poverty remaining concentrated in fragile states (86% of the total) and in low-incomes countries (LICs). While half of the extreme poor will still be in middle-income countries (MICs), the publication mentions that they will account for “a relatively small share of the population”: 3% in MICs compared to 25% in LICs.

More investment in effective education, health and nutrition, and social protection programmes could end extreme poverty.

The publication focuses on public finance (tax and aid), explaining that private finance is rarely used as a major source for the provision of basic social services. The briefing note updates the cost estimates of eradicating poverty for all 138 LICs and MICs, including all 47 least developed countries (LDCs), as well as the cost estimates for a set of social protection programmes designed at the scale needed to lift everyone out of extreme poverty in each country.

The assessment recommends that LDCs to increase their tax revenues by a quarter (to the maximum level that is economically feasible) and to allocate half of their public spending to health, education and social protection.

In order to close the financing gap and meet SDG 1 by 2030, the publication underscores that Development Assistance Committee (DAC) donors need to:

• Double their collective aid, with all donors meeting the 0.7% official development assistance (ODA) target;
• Double the share of their collective aid given to the LDCs from one-quarter to a half; and
• Press all multilateral agencies with a global reach to provide at least half of their support to the poorest countries.

Generally, more investment in effective education, health and nutrition, and social protection programmes could end extreme poverty.

The report was launched on the sidelines of the UNGA’s high-level week, on 25 September 2019, in New York, US. [ODI Press Release] [Publication: Financing the end of extreme poverty – 2019 Update]