Neither the state nor the market are tackling poverty

The last two decades have been a brutal time for people living in poverty and for billions more who live on the edge of it. COVID was the most severe economic shock in 75 year, destroying lives and livelihoods. The pandemic’s impacts didn’t only play back global inequalities: it widened them. In 2021 the world’s poorest 40 per cent saw incomes fall to 6.7 per cent below pre-pandemic projections, more than double the drop for the world’s top 40 per cent.

Conflict is adding another mega-shock, most evident in the effects that war in Ukraine has on food prices and energy prices. In 2017, the average African person spent five percent of their income on food. The region’s food costs are expected to surpass a third of household budgets by next year. But poverty was already becoming more concentrated in conflict zones where political and economic stability is scarce, even before the war with Ukraine.

Meanwhile, the climate crisis is contributing to weather-related shocks that outstrip many of the modelers’ worst predictions. People in poverty are being hit in two ways. First, they rely heavily upon agriculture and live in areas that are most vulnerable to environmental hazards. Second, they have the smallest buffers to deal the worst effects of climate change. The climate crisis is only going to get worse, and the people living in poverty have made the least contribution.

An increasing number of efforts to eradicate poverty miss a fundamental challenge. Put simply, the core assumptions behind ‘development’ are running out of road. The pace at which poverty was declining and social indicators were improving was already slowing prior to the pandemic. Trickle-down approaches to wealth creation were always ethically suspect, and economically illiterate. Deep inequality means that rich people must become even more wealthy to allow poor people to see marginal income increases. Carbon-intensive hyper-consumption by a wealthy minority of the world’s people reflects a systemic breakdown in the relationship with the natural environment. Living beyond planetary boundaries could literally lead to human beings becoming homeless.


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We need to do a deep rethink. These poverty shocks are at the root a failure of humanity to respect dignity. Both market-led and state-led approaches to developing often fall into the traps of acting for those in poverty, instead of with them. This results in a loss of agency, voice, and violation of rights. While governments and international institutions have a responsibility to learn from these failures, NGOs also need to be open to constructive challenge.

Poverty can be multi-dimensional and complex. It affects people individually as well as collectively. Mainstream development efforts still rely on two-dimensional economic progress measures and do not address the fact that more of the world’s poor are from structurally disadvantaged groups, who are often excluded and discriminated against. Development efforts will be hampered if power is not shifted within households, communities, societies, and among the poor.

The idea of development needs to be rethought. The industrial revolution was the catalyst for the first wave of Western European development. It has been viewed largely as a linear process that involves cumulative consumption and acquisition. As the march of advancement, we now pay the price. Yet if it was recast as a struggle for flourishing – being more, rather than having more – it would open space for approaches that more accurately reflect the breadth of human experience and need.

It has been said, “never waste a good crisis”. The current crisis in our world is a unique opportunity to explore new economic and social possibilities that are just as sustainable and just. Now is the time to begin this exploration.