February 08, 2014
Comment boards lit up around the globe when Bill Gates declared that “by 2035, there will be almost no poor countries left in the world.” Not surprisingly, many scoffed at the idea, often citing examples from various countries. This reaction underscored an important fact that that was also highlighted in the Gates Annual Letter: outdated images of poverty are still very pervasive.
Whether you agree with Bill Gates’ assertion or not – and at Grameen Foundation, we have always believed that that elimination of extreme poverty is possible through a determined global effort – the fact is that poverty rates have been falling steadily for the last three decades. According to World Bank, the number of people living on less than $1.25 per day plummeted from 43 percent in 1990 to 21 percent in 2010, with rates falling in all six regions of the world.
That success is largely underreported and absent from the news headlines. Instead the general public is shown a constant stream of stories about wars, famines and abject poverty that have shaped their worldview. So Bill Gates’ message is welcome because it draws attention to this unheralded progress. We’ve seen some of the biggest improvements in countries that have made the greatest inroads into providing microfinance and other financial tools to the poor. These services help unlock the ingenuity and determination of people to end poverty through their own efforts.
Consider Kenya, where M-PESA has made it easier for people to send money back home, repay microfinance loans and conduct other financial transactions via mobile phones. The poverty rate there has fallen 10 percentage points between 2000 and 2010 to 46 percent. In India, home to one of the world’s largest microfinance sectors, the rate has fallen from 49.4 percent in 1995 to 32.7 percent in 2010. And, in Bangladesh, where Grameen Bank provides microfinance services to more than 8.5 million members, the number of poor people declined by 26 percent between 2000 and 2010. (Professor Muhammad Yunus has also created more than 50 other organizations that attack poverty in ways that complement the financial services provided by the Grameen Bank that he founded.)
So what’s needed to finish the job?
As poverty declines in the aggregate, we will need to increasingly focus on the concept of “inclusion.” This means ensuring that we connect everyone with more and better tools for building better lives. It means putting them always at the center when designing those tools.
Our experience shows that technology can be a critical driver, when supported by human networks and measurable insights on the needs of the poor. For example, in Uganda, we created a network of 1,200 Community Knowledge Workers that has helped more than 209,000 farmers access vital information to improve their output and earn higher incomes for their families. A 2011 study of farmers who received this advice showed that they experienced a 37 percent increase in prices for their goods at market.
Working with the poor to test ideas and analyzing data on client behavior also provides powerful feedback loops that can help organizations create and improve products and services that respond to actual needs. (In fact, the power of measurement and data in poverty alleviation was the subject of Mr. Gates’ last annual letter.) In the Philippines, we used data on saving habits collected with our Progress out of Poverty Index® to help an organization design a new savings product that was better suited to its poorest clients. This resulted in an immediate 6 percent increase in the number of new accounts.
These are by no means the only tools that will help lift people out of poverty, but they are powerful examples of viable solutions that deserve support.
So, yes, there is much to celebrate in the fight against global poverty and even more to be done.
Grameen Foundation’s work is driven by our belief that everyone deserves a chance to achieve their full potential. Each day, poor women and men defy the images that have been burnished into many minds, using their finely honed survival skills to build better lives for their families. They are among our best allies and they aren’t looking for handouts. What they need is access to tools that will help them improve their own lives.
Bill Gates’ timely message has helped broaden an important conversation about how we can build on and accelerate progress towards one day enjoying a world virtually free from the curse of poverty.