Opinion: $300B yearly to wipe out poverty is affordable. Here’s how

Social protection is our greatest tool in the fight against poverty. Yet as 2025 gets underway, the harsh reality is that in the world’s lowest-income countries over 90% of people lack any form of protection whatsoever. There is simply nothing in place to protect them when they fall sick, or when their income changes as a result of life events such as unemployment, pregnancy, or old age. Without first establishing basic social protection schemes in these countries, the outlook for eradicating poverty remains bleak. We know it would cost the world’s lowest-income countries (26 of them, accounting for 9% of the global population) $308.5 billion a year to provide their populations with the basic social rights that form the stepping stones out of poverty: namely, essential health care and basic income security. This price tag (equivalent to 52.3% of their GDP), is entirely out of the reach of countries squeezed by a heavy debt burden and therefore particularly hard hit by the rise in interest rates since 2022. As a result, social protection coverage for low-income countries has hardly increased since 2015. But $308.5 billion is more than affordable for the international community. And it is a modest sum when compared to the potential impact and its role as an investment in future prosperity. New research from my team, as the U.N. special rapporteur on extreme poverty and human rights, shows just how feasible financing this social protection gap would be. Through a mix of existing and new financing sources, the international community could raise $759.6 billion a year; more than double what is needed to lift at least 700 million people in the world out of poverty. Official development assistance, or ODA, could play a role. If donor countries were to meet their internationally agreed target of 0.7% of gross national income, and allocate a significant portion of aid to social protection, ODA could bridge nearly 10% of the social protection financing gap in low-income countries. This remains unlikely, however, due both to the aid cuts and freezes happening across numerous countries and the almost complete neglect of social protection in current ODA streams. That’s why other, more imaginative options are needed. Debt-for-social protection swaps, whereby a creditor agrees to cancel part of a country’s debt in exchange for a binding commitment from that country to redirect the resources to social protection, should be explored. This is particularly urgent given the absurdity of a world in which 3.3 billion people live in countries that spend more on debt interest repayments than on either education or health. Further potential financing tools identified in the report include the issuance of 500 billion new Special Drawing Rights by the International Monetary Fund and allocated according to need rather than quotas which, at $175 billion for low-income countries, would cover almost half of their social protection financing gap; international tax reforms including strengthening corporate tax and introducing a wealth tax; and “solidarity levies” such as fossil fuel and transportation levies and taxes on financial transactions. The viability of all of these tools hinges on political will and a well-designed mechanism to mobilize and channel international support. Agreements would need to be drawn up on how to reallocate taxes raised from major corporations and billionaires located in the global north, as well as from solidarity levies, toward supporting social protection in low-income countries. A global fund for social protection, as advocated for by the International Labour Organization and the U.N. secretary-general, could facilitate these negotiations and coordinate the many financing tools needed to raise reliable and predictable funds. Crucially, it would also ensure that international financing was conditional upon beneficiary countries raising and spending their own funds on social protection — creating a virtuous circle in which international funding for social protection improves domestic economic resilience, in turn increasing the domestic funds available for social protection. 2025 is a critical year to address the woeful underinvestment in social protection which has led low-income countries down a poverty-stricken and debt-ridden path. Negotiations are well underway ahead of the Fourth International Conference on Financing for Development, or FfD4, which will take place in Seville, Spain, at the end of June; a unique opportunity to commit to closing the social protection financing gap. Concrete pledges should be made at FfD4 that put strengthening social protection at the heart of international development efforts. Heads of state and government meeting at the 29th U.N. Climate Change Conference last November agreed to $300 billion a year in climate finance for developing countries. They must now do the same for eradicating poverty, and we have the financial road map to get them there.