Coronavirus impact: Half a billion people at risk of poverty
The bleak warning comes from a UN study into the financial and human cost of the pandemic. Oxfam, the Nairobi-based charity, calculated the similar impact of the coronavirus crisis.
The economic fallout from the coronavirus pandemic which has killed over 88,000 people could increase global poverty by as much a half a billion, according to a United Nations study into the financial and human cost of the crisis.
The report says that it will be the first time that poverty has increased globally in 30 years. The findings come ahead of key meetings of the World Bank, International Monetary Fund (IMF) and G20 finance ministers next week.
The United Nations University study was written by experts at King's College London and Australian National University (ANU).
According to Christopher Hoy from ANU: "The economic crisis is potentially going to be even more severe than the health crisis."
Estimating a 400-600 million increase in the number of people in poverty across the globe, the report says the potential impact of the virus poses a real challenge to the UN Sustainable Development Goal of ending poverty by 2030
"Our findings point towards the importance of a dramatic expansion of social safety nets in developing countries as soon as possible and - more broadly - much greater attention to the impact of Covid in developing countries and what the international community can do to help," said Professor Andy Sumner of King's College London.
By the time the pandemic is over half of the world's population of 7.8 billion people could be living in poverty. About 40% of the new poor could be concentrated in East Asia and the Pacific, with about one third in both Sub-Saharan Africa and South Asia, the BBC reported citing the report.
Oxfam -- Nairobi-based charity – said in a report that the economic crisis that is rapidly unfolding is deeper than the 2008 global financial crisis
“The estimates show that, regardless of the scenario, global poverty could increase for the first time since 1990,” it said, adding that this could throw some countries back to poverty levels last seen some three decades ago.
The report authors played through a number of scenarios, taking into account the World Bank’s various poverty lines - from extreme poverty, defined as living on $1.90 a day or less, to higher poverty lines of living on less than $5.50 a day.
Oxfam says that under the most serious scenario - a 20% contraction in income - the number of people living in extreme poverty would rise by 434 million people to 922 million worldwide. The same scenario would see the number of people living below the $5.50 a day threshold rise by 548 million people to nearly 4 billion.
Women are at more risk than men, as they are more likely to work in the informal economy with little or no employment rights.
“Living day to day, the poorest people do not have the ability to take time off work, or to stockpile provisions,” the Oxfam report warned, adding that more than 2 billion informal sector workers worldwide had no access to sick pay.
Calls for debt relief have increased in recent weeks as the fallout from the COVID-19 pandemic has roiled developing nations around the world.
Earlier this week, more than 100 global organisations called for debt payments to be waived this year for developing countries, which would free up $25 billion in cash to support their economies.