Australia’s Aid Program does not focus on the vast majority of the World’s poor

Australian Aid Policy, Global Development

Key Points

  1. The Australian Government’s commitment to further focus the Australian Aid Program on East Asia and the Pacific will shift funds away from the vast majority of the world’s extreme poor.
  2. Over three quarters of Australia’s Bilateral Aid goes to East Asia and the Pacific, however the region is home to less than 10% of the World’s extreme poor (excluding China). This is in stark contrast to Sub-Saharan Africa that receives only 5% of the Bilateral Aid Budget but is home to over a third of the World’s extreme poor.
  3. By 2030, over two-thirds of the World’s extreme poor will live in Sub-Saharan Africa (according to World Bank estimates). While less than 2% of those in extreme poverty will remain in East Asia and the Pacific.

Background

Extreme poverty has reduced significantly at a global level over the last twenty years, however some regions have faired much better than others. Extreme poverty in East Asia and the Pacific reduced from almost one billion people in 1990 to 250 million in 2010. This trend is projected to continue and by 2030 the region will only have around 10 million people remaining in extreme poverty (according to World Bank estimates).

The extreme poor will become increasingly concentrated in Sub-Saharan Africa. The number of people living below $1.25 a day in the region increased from 290 million to over 400 million between 1990 and 2010. This is set to increase to almost 500 million by 2030 making Sub-Saharan Africa home to over two-thirds of the world’s extreme poor (according to World Bank estimates). This shift in the geography of extreme poverty is shown in the chart below.

Shift in the geography of extreme poverty

At the same time the Australian Government almost halved Aid to Sub-Saharan Africa in the recent budget update and indicated that this will continue. Sub-Saharan Africa receives only around 5% of the Bilateral Aid Budget although it is home to over a third of the World’s extreme poor. While East Asia and the Pacific receive over three quarters of the Bilateral Aid Budget, even though the region is home to less than 10% of the world’s extreme poor (excluding China).

Sources:

DFAT 2014 <http://aid.dfat.gov.au/Pages/home.aspx>

World Bank 2014 <http://iresearch.worldbank.org/PovcalNet/index.htm>

World Bank 2013 <http://documents.worldbank.org/curated/en/2013/11/18506691/shared-prosperity-mitigation-poverty-practice-precept>

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