5.4.2 Poverty

For decades, the Indian state of Kerala has invested in public health, education, land reform, and women’s rights. Community organisations, cooperatives and trade unions also play active roles in supporting people’s wellbeing. Kerala shows that poverty can be reduced without high incomes, as long as the focus of the economy and policy is to meet human needs.

So why do hundreds of millions of people around the world still live in poverty? The answer lies in systems, not individuals. A dominant, but misleading, narrative is that people in poverty are lazy or irresponsible. But most face barriers like poor education, unsafe housing, or lack of land or decent work. Poverty is not a personal failure, it’s a system failure, as the video below shows.

There are two main ways to understand poverty: absolute poverty and relative poverty.

Absolute poverty means not having enough to survive. This means no secure access to food, water, shelter, clothing, toilets or basic medicine. The United Nations defines extreme poverty as living on less than $2.15 a day. As of 2023, around 670 million people live below that line, mostly in Sub-Saharan Africa and South Asia (Figure 1). Many economists point out that this $2.15 a day figure is actually too low, causing us to underestimate the number of people in extreme poverty.

Relative poverty compares someone’s income to others in their country. People in relative poverty may survive, but they can’t take part fully in society. They may not be able to afford school materials, internet access, public transport or decent housing. Relative poverty affects people in both low- and high-income countries.

But poverty is more than lack of money. It also includes poor health, limited education, unsafe work, and lack of voice or freedom. That’s why the United Nations uses a Multidimensional Poverty Index (MPI) (Figure 2) which includes different indicators, not just income.

Even when governments want to end poverty, they often face obstacles. Global financial and trade rules (Section 5.2.4 and Section S.9), shaped by powerful countries and institutions, can block action. The Earth4All model identifies a few very high impact actions that can remove these barriers to reducing poverty.

Heavy debt repayments block public investment

As of 2025, most low-income and lower-middle-income countries are in deep debt. They have to spend a large share of national budgets paying interest on old loans. That leaves little money for health, education or transport.

One solution is debt cancellation, sometimes called a debt jubilee. Another option is restructuring loans with fairer terms on the amounts to be repaid and the time for repayment. For example, regional development banks can offer low-interest loans for public services like sanitation and childcare. This frees up public funds to meet people’s needs rather than sending money to foreign creditors.

International loan conditions limit policy choices

Countries often rely on loans from the International Monetary Fund (IMF) or World Bank. But these come with conditions. States may be forced to cut spending (Section 5.2.1), freeze wages, or privatise services (Section 5.2.2). These austerity policies are based on neoliberal narratives (Section 5.1.5) that markets are always more efficient than the state.

But this approach can make poverty worse. Cutting public services leaves people without help during hard times. Privatisation often makes profits a higher priority than access to key services. Instead, international lenders should support country-led development plans that are appropriate for the country’s context. They also need to treat universal public services as the backbone of the economy. These services are critical to the function of the entire economy and protect the health and wellbeing of the population.

Access to technology is restricted or too expensive

Clean energy, life-saving medicines, and digital tools could help millions of people. But many of these technologies are protected by patents, which means only certain companies are allowed to make or sell them (Section 3.2.3). These companies have monopoly power and often charge very high prices to maximise their profits (Section 3.2.4). Poorer countries may not be able to afford to pay. Even in emergencies, like during a health crisis, some countries are not allowed to produce their own versions of life-saving medicines.

To overcome this, states can use compulsory licensing to allow local production. They can also fund open-source research that anyone can use. When knowledge is shared, it becomes easier to build clean energy systems, improve healthcare, and meet local needs.

Poverty is not inevitable. It is the result of the systems we build,  what we value, who we listen to, and how we share. If we want to end poverty, we need to work together at local, national and global levels to create systems where everyone can thrive.

Concept: Systems, Regeneration

Skills: Thinking skills (creative thinking, critical thinking, transfer)

Time: varies, depending on the option

Type: Individual, pairs, or group

Option 1: Changing the story on poverty

Time: 40 minutes (longer if students share their creations with each other)

Our beliefs about poverty shape how we respond to it. One common but harmful story is that people are poor because they are lazy or irresponsible. But poverty is usually caused by system failures: lack of access to education, decent work, land, or services.

Watch this short video from the United Nations, explaining some common misconceptions about poverty.

Choose one harmful myth or misleading idea about poverty (e.g. “poor people don’t work hard,” “poverty is natural,” “aid creates dependency”).

Then, create an artistic product to challenge that myth and tell a more truthful, systems-based story about poverty. For example, you could create:

• a single-frame illustration or cartoon with a caption

• a short poem (e.g. free verse or spoken word style)

• a short video script (2–3 paragraphs max)

• a poster design with a simple image and a strong message

• a two-panel comic strip: one panel shows the myth, the second shows the systems truth

• a social media post with a message and some kind of image

• Or another format that interests you.

Be ready to share and explain your creation with another student, in a small group or with the class.

Option 2: Breaking poverty traps

Time: 30 minutes

(Note: ideally students have covered Section S.5 on causal loop diagrams and feedback to complete this)

In this section, you learned that poverty is not just about a lack of money. It is often the result of poverty traps: systems where one problem reinforces another. These traps are often held in place by reinforcing feedback loops.

Choose at least two of the strategies below (more if time allows):

• Debt cancellation or restructuring

• Changing loan conditions to allow more public investment

• Reforming trade rules to support domestic industry

• Expanding access to shared knowledge and technologies

• Investing in public services and social protection

For each strategy you choose, answer the following questions:

1. What reinforcing loop or poverty trap does this strategy aim to break? You may need to re-read information from the text and sketch a relevant reinforcing feedback loop.

2. How might this strategy create a new positive loop that helps reduce poverty?

You can use simple causal loop diagrams, but make sure you explain your thinking in words too.

Extension: Section S.8 discussed leverage points (Figure 10), places in a system where a change chan have a large impact. If you have already covered Section S.8, consider which leverage points the policies you chose for this exercise might tap into. Discuss with a partner or in a small group.

Ideas for longer activities and projects are listed in Subtopic 5.5

Coming soon!

• Our World in Data - the data website has a number of interesting articles highlighting a range of poverty data, including:

  • Poverty

  • SDG1: End poverty in all its forms, everywhere

  • Extreme poverty: How far have we come, and how far do we still have to go?

• Speaking of poverty, differently - a 3-minute animated video explaining why we need to think of poverty differently, not as a failure of the individual, but as a failure of our societies and their economies. Difficulty level: easy

• Poverty isn't a lack of character; it's a lack of cash - a TED Talk by Rutger Bregman exploring the idea that poverty is best addressed through direct cash support. He explains how many anti-poverty programmes are based on outdated assumptions and argues for universal basic income. Difficulty level: easy

• Non-take-up: The gap between social benefits on paper and in practice - a 5-minute animated video explaining the importance of social protection and why these programmes may fail to reach as many people as they should. Difficulty level: easy

• World Poverty Clock - an interactive tool that shows real-time data on global poverty trends, based on World Bank figures. It lets you explore how many people are living in extreme poverty by country and region. Difficulty level: medium

• Give Directly -  the website of a non-profit organisation that gives unconditional cash transfers directly to people living in poverty. It includes research, stories from recipients, and examples of how direct giving works in practice. Difficulty level: easy

• Our World in Data Poverty Explorer - a detailed collection of graphs, maps, and articles on poverty around the world. It shows how poverty has changed over time and compares how different countries are doing. Difficulty level: medium

• Everything is tuberculosis - an interesting interview on the podcast 99% Invisible with author John Green about the history of tuberculosis and why the disease still persists today despite the existence of medicines to cure it. Difficulty level: easy

• SPENT: Can You Make It Through the Month? - This online game puts you in the role of a single parent trying to survive on $1,000 for one month (in a USA context). You'll face tough choices about housing, food, and work. Based on real data, it shows how difficult poverty can be. Difficulty level: easy

Dixson-Declève, S. et al. (2022). Earth for All: A survival guide for humanity. Club of Rome. New Society Publishers. https://www.researchgate.net/publication/369144092_Earth_for_All

Jensen. L. (2025). UN Debt Update: Development Gives Way to Debt. United Nations Development Programme. https://www.undp.org/publications/dfs-undp-debt-update-development-gives-way-debt

Hasell, J., et al. (n.d.). Poverty. Our World in Data. https://ourworldindata.org/poverty

De Schutter, O. (2024, May 1). Eradicating poverty beyond growth (A/HRC/56/61). United Nations Human Rights Council. https://undocs.org/en/A/HRC/56/61

United Nations. (2024). The Sustainable Development Goals report 2024. https://unstats.un.org/sdgs/report/2024/

United Nations Conference on Trade and Development (UNCTAD). (2024, March 15). Debt crisis: Developing countries’ external debt hits record $11.4 trillion. https://unctad.org/news/debt-crisis-developing-countries-external-debt-hits-record-114-trillion

United Nations Development Programme (UNDP). (2024). Multidimensional Poverty Index 2024.  https://hdr.undp.org/content/2024-global-multidimensional-poverty-index-mpi#/indicies/MPI​

Coming soon!