Why the crisis?

In September 2000, 189 countries came together and formed the Millennium Development Goals (MDGs). The MDGs are a set of eight goals designed to unite the world in an effort to significantly ease the suffering of an alarmingly large portion of the world living in poverty by the year 2015. The first of these goals is to decrease the number of people in extreme poverty by 50% by the year 2015. Extreme poverty is a condition defined as those living on less that $1 per day. This goal translates into reducing that number from 28% of the world’s population in 1990 to 12.7 percent of the world in 2015 – or stated another way, bringing 363 million of the world’s poor above the $1 a day poverty line.

Since the establishment of the MDGs, great inroads have been made in international development to create solutions in poverty reduction. Unfortunately, much of this improvement has come in a highly inequitable manner. Global numbers in poverty reduction since the 90s significantly mask large regional differences. A large contributor to this effect was the rapid economic growth experienced in Asia as the emerging Chinese and Indian economies began a period of rapid expansion and globalization. However, Sub-Saharan Africa actually saw an increase in the numbers of extreme poor from 41% in 1990 to 46% in 2001.

One problem in achieving sustainable, equitable poverty reduction is the vast difference between urban and rural ecosystems in developing nations. According to the latest available data from the World Bank, 1.1 billion people still live below the $1 a day extreme poverty line. Seventy percent of the world’s extreme poor live in rural areas. Recent successful advancements in poverty reduction have focused more on urban poverty. Techniques such as microfinance and capital investment in emerging markets and individual social entrepreneurs are making slow, steady gains in alleviating the systemic conditions plaguing the urban poor. However, these approaches have seen limited success in rural areas. The main challenge in reaching the rural poor is a lack of infrastructure. Poor road networks, lack of electricity, and lack of communications infrastructure create almost insurmountable barriers to sustainable, long-term growth through primarily economy-based solutions.