The year is 2015. Emboldened by a successful experience with the Millennium Development Goals, the world comes together behind a new set of targets. The Sustainable Development Goals (SDGs) embody the promise of a better world in which no one would live in hunger, a world that would be well on its way to achieving a dignified life for everyone while caring for and preserving our planet and environment for future generations. That same year, the Addis Ababa Action Agenda provides the blueprint for expanding and aligning financing and development co-operation to enable the SDGs.

Ending global poverty and reducing inequalities are interlinked and urgently needed in the wake of the pandemic. Climate change and the rising costs of debt servicing in developing countries threaten to exacerbate poverty and hinder efforts to reduce inequalities. Drawing on a wide range of recent data and evidence, this chapter discusses the relevance of current poverty definitions. It reviews the complex relationship between changing levels of inequality, poverty and economic growth as well as the implications for development co-operation and national policy making. It underscores what it will take to end global poverty and reduce inequalities and the urgent necessity to do so. It concludes that the annual cost of ending poverty is not prohibitive but the price of failing to end poverty could be disastrous to billions of people.

This chapter reviews findings from a five-year global research programme that can guide national policy makers and development co-operation agendas on how to best reduce poverty and inequality – sustainably and in tandem. Successful efforts require bigger public budgets, greater tax fairness and significantly expanded social protection, and targeted efforts to formalise workers and increase worker mobility. The chapter includes examples of Viet Nam’s extension of the mandated maternity leave period, cash transfer programmes in Ecuador, South Africa and Zambia, among others; tax system strengthening in Tanzania and Uganda, and minimum wage policies and government protection for workers in vulnerable industries during structural transformation in Indonesia.

In tackling entrenched poverty, policy makers and global actors can look to rigorous research for guidance on effective solutions. Multidimensional programmes, including the established Graduation approach pioneered by BRAC in Bangladesh, provide a time-bound, carefully sequenced set of interventions that can offer a lasting pathway out of extreme poverty. Such programmes have had success across Africa, Latin America and Asia, including in fragile contexts like Afghanistan and government scale-ups have reached more than 5 million people. Further scaling their impact requires integrating this approach into national policy, planning and existing social programmes as well as development co-operation financing and support for better co-ordination.

Anne Beathe Kristiansen Tvinnereim, Minister of International Development, Norway

Low- and middle-income countries need to increase their tax revenue collection dramatically to finance progress towards the Sustainable Development Goals. This chapter discusses why equitable and sustainable tax systems, progressive tax design, implementation and monitoring should be given more attention in the broader fiscal and economic context – as essential tools for tackling poverty and inequality. It examines and shares examples of complementary fiscal measures, such as enforcement and targeted redistribution to the poorest to make fiscal systems fairer and to generate greater revenue. It notes that using tax systems to pursue environmental goals such as through domestic carbon taxes, often cited as a promising new revenue source, have limited revenue generation potential. It concludes with forward-looking suggestions to tap the full levelling potential of tax systems.

How many zeros are there in a billion? Most of us need to at least pause and think – or ask Google – to come up with the right answer. There are nine zeros in a billion. A figure well beyond most of our imaginations, especially when we consider what a billion dollars means in personal wealth.

Most people living below the international extreme poverty line of USD 2.15 per day have a job but do not earn sufficient income to support themselves and their families. To deliver a long-term and systemic response to poverty, the distribution of income across the value chain must improve – not least by upholding workers’ right to a fair wage in low- and middle-income countries. This chapter discusses how labour market and wage-setting institutions are key levers to improve working conditions, tackle working poverty, enhance productivity, foster sustainable growth and end violations of workers’ fundamental rights to freedom of association, which are increasing at an alarming rate. It examines how development co-operation, by fostering an enabling environment for collective bargaining and directly involving trade unions, can support a just transition to net zero economies and better integrate the fight against poverty and climate change while also enhancing social cohesion and strengthening pillars of democracy.

Gender equality is a powerful engine for economic growth and resilience. This chapter discusses how closing gender gaps can result in greater productivity, economic growth and human development. Drawing on a vast literature and insights and lessons from the International Monetary Fund’s work with member countries such as Mauritania, Niger, Nigeria, Senegal, and Sierra Leone, among others, highlights the importance of tailored policy advice with a gender lens, and capacity development initiatives. It examines the importance of decisive policy action to close persistent gender gaps in labour force participation and tackling gender inequalities in work, education, access to technology and other opportunities. It calls for collaboration with development and multilateral partners to leverage collective expertise and resources to address persistent barriers to gender equality.

With global crises already stalling or reversing progress in reducing global poverty, the challenge today is to not only redouble efforts to reach poverty goals but also maintain gains achieved. This chapter shares lessons from the 40-year dramatic decline in the number of people living in poverty focusing on successful policies and strategies. It begins with a discussion of China’s pro-poor economic transformation before examining its development policy that provided new employment opportunities for the rural poor outside the agriculture sector. It looks at the importance of policy coherence and institutional capacity to maintain a focus on poverty reduction and removing structural barriers through expansive social protection systems. It concludes with a section on sharing knowledge through South-South co-operation including an example of a village-level poverty reduction project implemented in the United Republic of Tanzania.

What does feminist development policy look like today? It looks like human rights-based, people-first, locally driven and climate-resilient development. It looks like reducing poverty and boosting inclusive economic growth through initiatives that include women and girls and men and boys alike. That’s an approach Canada will continue to champion, now and in the future.

This chapter reviews how DAC members prioritise, define, programme, monitor and budget for poverty and inequality reduction through development co-operation and partnerships. Drawing on in-practice examples and findings from a new and comprehensive survey and qualitative research on DAC members’ approaches to reducing poverty and inequalities, the chapter discusses opportunities and challenges for effective delivery of poverty and inequalities policy priorities and programmes and highlights areas where fresh DAC guidance could support collective action, greater effectiveness and learn from good practices.

Since 2020, the five richest men in the world have doubled their fortunes, yet 5 billion people are worse off. The gap between rich nations and the rest of the world is growing for the first time in 25 years. Tensions between the Global South and the Global North are running high. At four years into the 2020s, this is already fast becoming the decade of division.

To what extent does development finance, specifically official development assistance (ODA), target the reduction of poverty and inequalities? After analysing the results from existing measures of aid targeting, this chapter shares findings from innovative approaches to provide a more complete view of the current state of targeting for poverty and inequalities across bilateral and multilateral providers, relevant sectors and geographies. It provides new evidence on ODA allocations relative to where the poorest and most vulnerable people are living. The chapter concludes with suggestions for development co-operation providers to reinvigorate the fight against poverty and inequalities in the context of the green transition agenda by improving resource allocations, targeting and measurement.

Public support underpins development co-operation and taxpayer support is vital for accelerating efforts to reduce poverty and address climate change. Survey results show public backing for international development initiatives that aim to address poverty and inequality across countries. This chapter focuses on the role of global education and critical thinking and public engagement in countries providing development co-operation, to combat misinformation and to ensure that citizens have a comprehensive understanding of interconnected global issues such as poverty, inequality and climate change. Promoting global citizenship and fostering well-informed civic participation through education can cultivate an informed public discourse. This is essential for mobilizing resources and political will to achieve equitable and sustainable global transitions.