# **VI.2. A Continuous Tracking System of the Extreme Poverty Target**

Finally, we propose a continuous update of the analysis above whenever PovcalNet and other source data are updated. Repetition of the analysis allows us to monitor progress in the extreme poverty target in a systematic manner and also identify what each country and region needs to do from the time of the analysis onward.

As time passes, new household survey data will be collected and included in the PovcalNet, while population projections and national accounts will be also updated. New global, regional, and countrylevel poverty rates at the US$1.25 poverty line will be estimated accordingly. PovcalNet has updated all poverty rates every three years, except for the last spell between 2008 and 2010. Population projections of the World Bank Data group are updated twice a year. Other data in the World Development Indicators are now updated every quarter.

With these changes in the source data, results from all the analyses above will likely change. Some countries might fail to achieve the annual rate of 4.4 percent growth by the next update. As a result, if the analysis is repeated, we might find that the pace of global poverty reduction is not achievable even with the intermediate growth target. In that case, the minimum growth requirement might need to be raised. Furthermore, the analysis might reveal new obstacles to the global target. In the analysis above, the unequal pace of growth across countries is the main challenge, although changes in within-country inequality and the unequal pace of population growth across countries can also slow the pace of global poverty reduction. Furthermore, the situation might change and other factors might be identified as key obstacles to the global target.

# **VII. Conclusion**

This paper proposes a new analytical framework to understand what is needed to achieve the target of ending extreme poverty. The approach first projects the global poverty rate in 2030 under a benchmark scenario, where all countries will grow at the same rate as in the past 10 years or so and their populations will grow as projected by the World Bank Data Group. It modifies a projection model used in Ravallion (2013)—the distribution neutral approach—so that the effect of changes in inequality on the pace of poverty reduction can be incorporated, and also takes into account country-specific rates of population and economic growth.

The analysis based on this approach reveals how important it is to incorporate country-specific growth rates. Even if the developing world as a whole has been growing fast enough to achieve the target of 3 percent by 2030, the different paces of growth across countries reduce the global pace of poverty reduction and lead to a projected poverty rate of 8.6 percent in 2030. Surprisingly, incorporating changes in within-country inequality has a minimal impact on the global projection, while it does have a large impact on some regions, particularly the LAC region. All in all, ignoring country specific factors can produce overly optimistic projections about the future status of poverty.

Findings of the analysis provide interesting insight on what needs to be done to achieve the end of extreme poverty target. The analysis above confirms that ending extreme poverty by 2030 is very challenging. While economic growth is important, accelerating growth is not enough and sharing the pace of growth within and across countries is essential to achieve the target of ending extreme poverty. Indeed, our analysis shows that lack of growth is not a key constraint. The developing world as a whole has been growing fast enough to reduce the global poverty rate to below 3 percent by 2030. A key problem is that poorer countries in general have experienced slower economic growth and faster population growth than richer countries. To end extreme poverty by 2030, it is crucial to not only accelerate growth but also improve sharing of the growth within and across countries. Also, given that even a small shock can derail 21