The widely held belief that increasing economic growth will solve global poverty is wrong and leading the world down a dangerous path of spiralling inequalities and environmental breakdown. We must urgently change course, abandoning GDP as a measure of progress and refocusing on what truly makes a difference to people’s lives.
For close to a century we have been told, over and over, that economic growth is the answer to global poverty. Grow the economy – politicians, economists and development practitioners have long maintained – then sit back and watch as all prosper.
The reality is wildly different. Today we live on a planet that has never been wealthier, with global billionaire wealth growing by roughly $5.7 billion a day in 2024. Yet the number of people still living in poverty – around 3.5 billion according to the World Bank – has barely changed since 1990.
Far from lifting all boats, economic growth has created vast and growing gaps between the rich and the poor. The relentless exploitation of natural resources it demands is also pushing our planet beyond its limits. As I set out in my most recent report to the UN, it is people in poverty that are paying the price for the deadly climate crisis this has created. Over the past three decades, more than 90 per cent of climate related deaths have occurred in developing countries.
A mantra with dire consequences
Yet despite the gross inequalities and ecological breakdown staring us in the face, we have become so accustomed to the idea that “more is better” that governments continue to be elected – and even held to account by international organizations – based on their ability to increase gross domestic product (GDP).
Yet, as a measure of societal progress, GDP is deeply unsatisfactory: it takes into account neither the essential work done within households and communities, predominately by women, to support others and the commons, since that work is unremunerated; and ignores the ecological and social costs of economic activity – biodiversity loss, pollution, the mental health impacts stemming from the pressure of economic competition.
In low-income countries this obsessive quest for growth has led to disastrous political decisions for people in poverty, from the commodification of natural resources once freely available to them, to corporate tax cuts and the dismantling of labour protections. In high-income countries, growth-driven policies have created a “burnout economy”, trapping millions in precarious work in order to maximize the profits of a tiny elite.
In both, the planet on which we depend for our very existence has become collateral damage.
Economic growth is not the panacea it is made out to be. Even if it were the solution to poverty, the Earth simply cannot provide the limitless resources or absorb the waste that endless expansion requires. It is clearly time to reimagine the fight against poverty.
Change is on the way
Fortunately, momentum for new economic thinking is building. A Beyond Growth conference was held in the European Parliament in 2023, attended by over 5,000 participants and followed in 2024 by similar events at national level, including in Denmark.
Still, the general consensus until now has been that while growth may cause problems, especially when we think of it as potentially infinite, it is still necessary to poverty alleviation – requiring a trade-off between fulfilling the needs of people in poverty and respecting planetary boundaries. This is why, in July 2024, I presented a report to the UN on Eradicating Poverty Beyond Growth: to show governments that reducing poverty can no longer be justified as an excuse for destructive economic growth.
This idea is slowly gaining ground within the UN. Following a request expressed in the Pact for the Future adopted at a 2024 UN Summit, UN Secretary General António Guterres appointed a High Level Expert Group on Beyond GDP to propose recommendations for new ways to measure progress that go beyond GDP. Denmark’s own GreenGDP and GreenREFORM models, which include climate and environmental concerns in economic policymaking, are important exercises in this regard.
And a Global Alliance on Beyond GDP comprising over 60 countries and partners was officially launched in July at the Fourth International Conference on Financing for Development in Spain, to support the practical application of these new metrics.
Beyond new metrics
New metrics are important, but let’s be clear: they will not suffice. If we are serious about eradicating poverty and transforming our outdated economic system, we must be far more ambitious.
A growing alliance of UN agencies, governments, civil society organisations, academics, trade unions and others, are co-constructing a Roadmap for Eradicating Poverty Beyond Growth with me, which I will present to the UN in 2026. This Roadmap will offer governments in the Global North and South and international organizations with a comprehensive set of concrete measures that shift economies away from profit maximization and towards fulfilling human rights.
These policies are under discussion, but promising avenues include better rewarding work according to its ecological and social value, particularly to people in poverty – wage increases for essential workers, for example, and pay caps for those in destructive industries such as financial trading, fossil fuels or tobacco; job guarantee programmes – whereby the government guarantees a job to anyone willing and able to work; and debt cancellation and restructuring so that creditor repayments don’t take precedence over social spending. It is frankly absurd that 3.4 billion people live in countries that spend more on interest payments than on either education or health.
Also included will be the policies required to finance these changes, such as progressive taxation – including wealth and inheritance taxes – tackling tax evasion, and greater international cooperation on tax and debt.
These are the bold yet achievable measures that must shape the next generation of anti-poverty efforts – from the drafting of the first EU Anti-Poverty Strategy, to the Second World Summit for Social Development this November, and ultimately the global development goals that will succeed the Sustainable Development Goals in 2030. Together they offer a roadmap for eradicating poverty that fulfils the rights of all, not just the privileges of a few.