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The Bill and Melinda Gates Foundation released its 2014 Annual Report last week. In it, Bill and Melinda Gates outline and challenge three myths about global poverty. The first myth is that poor countries are doomed to stay poor.

Bill Gates challenges this myth by stating that extreme poverty is on the decline unlike any other time in history. Is he correct? If so, does his assertion contradict Scripture? Doesn’t Jesus say in Matthew 26:11 that the poor will always be with us?

Before diving into Gates’s claim, it’s important to recognize that poverty is a relative term, not an absolute one. When talking about global poverty, economists and development practitioners pay particular attention to people living in extreme poverty, defined as living at or under $1.25 per day.

Extreme Poverty Will Not Always Be with Us

It seems criminal that material poverty still exists in the twenty-first century, but as Gates illustrates using World Bank data and other sources, extreme poverty will not always be with us.

Here are a few points to consider:

  • In 1981, fifty-one percent of the world lived on less than $1.25 a day. That percentage is now down to twenty-one percent.
  • The global poor in developing countries have rapid and increasing access to technology. In Africa alone, 63.5% of the population has mobile phones – this is providing many people with business opportunities.
  • The African continent has sustained high levels of economic growth, averaging slightly more than five percent of annual GDP growth over the period between 2001 and 2010.

There are many reasons to be hopeful that we will stamp out extreme poverty in our lifetimes – and this is the first time in human history that we have been able to make this claim. Once we stamp out extreme poverty, then we can focus on how to bring about ever-increasing levels of flourishing for the least advantaged across the world.

The “Vicious Circle”: Fact or Fiction?

Economists used to make claims about ideas like the “vicious circle of poverty,” which dominated the thinking of development economists for decades. This idea suggests that poor people are trapped in their conditions of poverty, and those conditions are inescapable because the poor can’t generate enough savings. The proposed solution to this problem has been a vast influx of cash into poor economies. Economist Peter Bauer challenges the field of academics by saying that this is empirically untrue:

Throughout history innumerable individuals, families, groups, societies, and countries – both in the West and the Third World – have moved from poverty to prosperity without external donations. All developed countries began as underdeveloped. If the notion of the vicious circle were valid, mankind would still be in the Stone Age at best.

Even in Bangladesh, one of the most oppressed countries on earth, there is reason for hope. Life expectancy has increased by ten years, infant mortality has declined by nearly two-thirds, female literacy has doubled, and economic growth has averaged over five percent annually.

We should only expect these conditions to continue to improve. This has much to do with access to global market trade, which opens up opportunities for the poor that were inconceivable just decades ago.

Gates is correct to reveal that the vicious circle of poverty is a myth. Countries can and have continued to emerge out of poverty with real benefits for the individuals living in those countries. To fulfill the biblical call to care for the poor, we must pay close attention to how these nations are doing this and support opportunities for greater flourishing for the least of these.

Is poverty on its way out? Leave your comments here.

Poverty-bookFor a comprehensive examination of how to fight poverty in a way that is biblically and economically sound, look out for IFWE’s upcoming book, For the Least of These: A Biblical Answer to Poverty, to be released this spring.

Dr. Anne Bradley

About Dr. Anne Bradley

Anne Bradley, Ph.D. is Vice President of Economic Initiatives at the Institute for Faith, Work & Economics. Anne received her Ph.D. in Economics from George Mason University. She is a visiting professor at Georgetown University and has previously taught at George Mason University and at Charles University in Prague. Read More...

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  • Erika

    It would help if we stopped referring to other countries as “Third World”? The continued reference to a place that does not exist only adds to ignorance, marginalization and discrimination of humanity. I also find it preposterous that you continue to use Bill Gates opinion, statement, claims, or anything else for that matter, as analysis or comparison of God’s word. I personally read this site to find like minded people with solutions not mediocre questioning and comments about God’s word.