The definition of poverty around the world

Poverty is a global problem and one that World Vision work every day to end. But what is the definition of poverty, and what does poverty look like around the world? Read on to discover the four main levels of poverty and analysis on what poverty looks like in different continents.

What is the definition of poverty?

To better understand how poverty is defined around the world, you need to first understand that there are various levels of poverty that are accepted globally.

What are the levels of poverty around the world?

• Absolute poverty
• Relative poverty
• Non-financial poverty
• Secondary poverty
  
  

The definition of absolute poverty

Absolute poverty, often also referred to as extreme poverty or abject poverty, defines the situation where a person, or persons, are living in the most severe state of poverty. As of 2018, anyone who is living on an income level of less than $1.90 per day, roughly £1.40, is deemed to be living in absolute poverty, as outlined by The World Bank.

However, extreme poverty is not only characterised by money and many people living in this level of poverty will also have a severe lack of access to basic human needs. In 1995, the United Nations defined this level of poverty as: “a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services.”

The definition of relative poverty

Relative poverty brings in social context and acknowledges that, although a person might earn more than $1.90 a day, they are still living in poverty in comparison to their social context. Relative poverty is a more common issue in middle- and high-income countries where, although absolute poverty isn’t as prevalent, sectors of the population are still living through hardship compared to the average citizen.

Relative poverty also might not look like the traditional image of poverty associated with lower-income countries. Habitat for Humanity explains that: “On the whole, poverty is about exclusion. In its most extreme form, it’s the inability to access what you need for a decent life. Relatively speaking, in more developed countries, it’s being excluded from what constitutes normal daily life:

• Internet to access jobs or public services
• The proper clothes to find that job
• Paying for education
• Access to decent housing”

The definition of non-financial poverty

As you can see, financial acumen can make up a big part of what is and what is not defined as poverty. However, due to global circumstances, there can be occasions where people may not be living in poverty in financial terms but still lack access to basic human needs, like clean water or education.

Whether it’s due to geography and lack of access to supplies, war and conflict or other factors, there are many reasons why a person with an income not deemed below the poverty line still might not have access to basic human needs, meaning they can be seen as living in non-financial poverty.

The definition of secondary poverty

The final of the four main definitions of poverty you need to know is so-called secondary poverty. Whereas both absolute and relative poverty can be defined as different types of ‘primary poverty’, secondary poverty refers to the situation where a person has enough money to afford the necessities, however, they spend enough of their income on ‘non-necessities’ and are left with too little.

Oftentimes, the ‘non-necessities’ being referred to when discussing secondary poverty are coping mechanisms or are linked to addiction problems, including alcohol, gambling, tobacco or drugs. These addictive substances or activities are some of the most prevalent factors contributing towards secondary poverty and put people in a situation where they feel they have to use their income to feed their addictions rather than to access necessities.   

What does poverty look like around the world?

• How does poverty affect Africa?
• How does poverty affect Asia?
• How does poverty affect Europe?
• How does poverty affect North and Central America?
• How does poverty affect South America?
• How does poverty affect Oceania?

How does poverty affect Africa?

In 2020, we were involved in 174 projects across 36 countries worldwide and of those countries, 16 are in Africa. Our work in Africa aims to not only help those in need but build a stronger community foundation allowing people to be able to provide for themselves for years to come.

Poverty in Africa

At face value, poverty in Africa today is in a better state than it has been previously, World Bank revealed in their report, Poverty in a Rising Africa, that only 43% of Africans were labelled ‘poor’ in 2012 compared to 52% in 1990. However, as population growth accelerates across the continent 43% today is a larger number of people than 52% was back then and countries in Africa are some of the most affected by poverty in the world.

How poverty manifests in Africa is similar across many countries, as revealed by the World Bank’s subsequent 2019 report, Accelerating Poverty Reduction in Africa. Some of the key takeaways found that were true continent-wide are:

• People living in poverty in Africa are most likely to live rurally. Currently, 82% of those considered poor in Africa, live in rural areas.
• Under 15’s are most likely to be poor, with roughly half of those living in poverty in Africa being aged 0 to 14.
• Those living in poverty are likely to have weak links to state, having a limited say in the public policymaking that affects them.

Improvements in Africa

One positive finding is that nonmonetary dimensions of poverty have been improving across the continent, with improved health, nutrition and education and a reduction in violence. This does not mean, however, that these issues are no longer present as in Africa, “two in five adults are still illiterate, and the quality of schooling is often low; after a decade of relative peace, conflict is on the rise.”[1]

How does poverty affect Asia?

Asia is the most densely populated continent on earth, with 4.5 billion of earth’s total 7.8 billion human population residing here. Asia is another continent where disparity is large, as can be shown in life expectancy. Hong Kong and Japan have the two highest life expectancies in the world, at 85 years, while at the other end of the spectrum, although not the lowest in the world, countries like Afghanistan, Myanmar, and Pakistan don’t go higher than 67 years[2], a large difference.

Poverty in Asia

• According to the latest World Bank data, around 40.43% of Asia live on less than $5.50 a day, and 7.14% live in extreme poverty at less than $1.90 a day.
• One of Asia’s predominant issues is a lack of food, with 55% of all undernourished people in the world living there.[3]
• Asia is home to the world’s largest refugee camp in Bangladesh supporting Rohingya refugees from Myanmar.

Refugee crisis in Asia

We currently work in seven countries across Asia, with one of our largest projects taking place in Bangladesh supporting Rohingya refugees who have fled Myanmar to the largest refugee camp in the world. With hundreds of thousands of Rohingya people now surviving in these overcrowded camps that no human should ever be subject to living in, there is a continuous need for food and clean water and giving these people the tools they need to build new, safe homes for their families.

How does poverty affect Europe?

If you are reading this as someone who lives in the UK or Europe, you may feel as though poverty doesn’t exist on the same level here as it does around the world but unfortunately that’s not true. A recent report by Eurostats found that “in 2019, 92.4 million people in the EU-27 were at risk of poverty or social exclusion; this was equivalent to 21.1 % of the EU-27 population.” And that figure doesn’t include those who live in European countries outside of the European Union, many of which are lower-income states.

• The European Union has the second-largest economy in the world after China, however, the wealth divide between countries is large. [4]
• Countries in the former Soviet Union tend to be the poorest today, although their poverty rates are declining.[5]
• An estimated 21% of children in the EU aged under 18 are thought to be at risk from poverty or social exclusion.

Poverty in Eastern Europe

At World Vision, we work in Eastern Europe to improve the lives of vulnerable children living in poverty. As well as high poverty levels hindering children’s education and life prospects, in Albania, we focus our work on child protection and deal with issues like child marriage and domestic violence first-hand. Issues like this are prevalent and one-third of the population lives in relative poverty with a daily income of less than $5.50[6].

How does poverty affect North and Central America?

When people think of North America, it’s images of bustling cities in the USA that tend to come to mind, however, this continent is not free of poverty by any means. With a mixture of high- and low-income states, we can see examples of extreme wealth and extreme poverty here like anywhere else in the world.

• In 2019, 10.5% of USA residents were deemed in poverty, equalling roughly 34 million people.[7]
• In Latin America (covering Central America and the Caribbean) 33.7% of people were living in poverty and 12.5% were in extreme poverty in 2020.[8]
• 81% of those who had migrated out of Latin America were residing in North America in 2017, giving this continent a unique migratory flow.[9]

Poverty in USA

World Vision's work in the United States of America, funded by US-based supporters, aims to protect children from disasters and benefit the communities that need the most help. In 2019, we reached more than 4 million people, including 2.1 million children in the US by coordinating with businesses and manufacturers to make it easy for them to share excess resources. We also managed to help 175,487 teachers and students in low-income neighbourhoods with school supplies needed to provide the level of education all children deserve to receive.

Poverty in Central America

A lot of our work in this region falls within Central America, where children are vulnerable because of issues such as lack of clean water, low and unstable family income and high poverty levels. Discover some of the work we are doing below.

Another issue that Central America faces in the fight against poverty is its vulnerability to natural disasters. In 2020 alone, we coordinated projects helping respond to flooding, drought and storm preparation in El Salvador, Guatemala, Honduras, Mexico and Nicaragua, alongside our other ongoing work.

How does poverty affect South America?

South America is one region where political circumstances are having a large effect on poverty, with residents fighting against corruption and economic crisis. It’s currently in a fragile situation where, although poverty on the whole is decreasing, we can see a path being created which may cause this to change rapidly in the near future.

• Poverty is currently decreasing in every South American country other than Venezuela, where there is an expected 20% rise in people living in extreme poverty between 2010 and 2030.[10]
• South America became significantly less peaceful between 2019 and 2020, driven by deterioration in militarisation and safety and security.[11]
• Substance abuse among so-called ‘street children’ is high in South America. In Ecuador, a study found that 98% of homeless children with no contact with families or care agencies (average age 14) had used cocaine in their lives.[12]

Poverty in Venezuela

Venezuela is one country where the COVID-19 pandemic has had a worsening effect on an already increasing problem, where food and medicine shortages are causing mass displacement and strife. It’s a country that is really on the brink of crisis and this is affecting the continent as a whole as migration becomes people’s only option. We’ve worked in the country helping to bring food to those who, despite all of their hard work, cannot afford it such as nine-year-old Luigi and his big brother 11-year-old Luis, who work in a graveyard with their father trying to make ends meet.

How does poverty affect Oceania?

Poverty varies a lot around Oceania, with larger countries like Australia and New Zealand experiencing poverty very differently from the Pacific Islands which also make up the continent. One group of islands that are most affected are the Melanesian Islands – Papua New Guinea, Fiji, Solomon Islands and Vanuatu. One in four families on the Melanesian Islands lives in poverty, with access to education very limited and poor health indicators as well as the ongoing risk and repercussions of natural disasters.

• In both Australia and New Zealand, 17.7%[13] and around 14%[14] of children are living in relative poverty, (in a household earning less than 50% of the average income).
• Approximately 25% of families on the Melanesian Islands of Papua New Guinea, Fiji, Solomon Islands and Vanuatu, live in poverty.
• Oceania is the continent most likely to face a natural disaster that can cause increased levels of poverty, with Vanuatu the country most likely to experience a natural disaster at any time in the world.[15]

Poverty and natural disasters in the Pacific Islands

Above all other issues, it’s natural disasters that can make the biggest difference in Oceania. Where Pacific Islands may also struggle with a lack of education and unstable crop growth, the occurrence of a natural disaster can unsettle the country dramatically and cause all issues to worsen in an instant. In 2020, we worked in response to the category five Cyclone Harold disaster after it hit Vanuatu to help get much-needed supplies to the worst affected and most vulnerable.

Global poverty

As we can see, poverty is an issue in every corner of the world, whether that’s due to lack of access to stable jobs, limited natural resources or the effects of natural disasters. This means that, although poverty is an issue the world over, the solution is not the same for any one area, and even from town to town what is needed to help fix the root cause of the problem might be different. This is why ensuring a community-based and long-lasting solution is something World Vision work’s hard to do in every country we work in, giving people the tools they need to change their circumstances once and for all.

READ MORE: Who is affected by child poverty

There are a range of ways you can support World Vision, from donations to offering your prayers, every single voice and every single contribution helps communities in their fight to end poverty.

1. Beegle, K. et al. (2015) "Poverty in a Rising Africa".
2. Life Expectancy by Country and in the World (2021) - Worldometer (2021).
3. The State of Food Security and Nutrition in the World 2021 | FAO | Food and Agriculture Organization of the United Nations (2021).
4. Poorest Countries In Europe 2021 (2021).
5. Alam, A. et al. (2005) "Growth, Poverty, and Inequality"
6. "Europe and Central Asia Economic Update, Spring 2021: Data, Digitalization, and Governance" (2021).
7. Bureau, U. (2021) Income and Poverty in the United States: 2019, The United States Census Bureau.
8. Social Panorama of Latin America | Economic Commission for Latin America and the Caribbean (2021). 
9. International Migration Report | Un.org (2017).
10. Global Peace Index 2020 – Vision of Humanity (2021).
11. The ‘street children’ of Latin America | The Psychologist (2021).
12. Poverty – Poverty and Inequality (2021).
13. Latest release of child poverty statistics – corrected | Stats NZ (2021).
14. WorldRiskReport 2020 - Focus: Forced Displacement and Migration - World (2020).