Wednesday, October 7, 2020

Covid-19 to add as many as 150 million extreme poor by 2021

 Global extreme poverty is expected to rise in 2020 for the first time in over 20 years as the disruption of the Covid-19 pandemic compounds the forces of conflict and climate change, which were already slowing poverty reduction progress, the World Bank said today.

The Covid-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, depending on the severity of the economic contraction. Extreme poverty, defined as living on less than $1.90 a day, is likely to affect between 9.1 per cent and 9.4 per cent of the world’s population in 2020, according to the biennial Poverty and Shared Prosperity Report. “This would represent a regression to the rate of 9.2 per cent in 2017.” 

Had the pandemic not convulsed the globe, the poverty rate was expected to drop to 7.9 per cent in 2020, it reads.

“The pandemic and global recession may cause over 1.4 per cent of the world’s population to fall into extreme poverty,” World Bank Group president David Malpass said, adding that countries will need to prepare for a different economy post-Covid, by allowing capital, labour, skills, and innovation to move into new businesses and sectors, in order to reverse this serious setback to development progress and poverty reduction. “World Bank Group support – across IBRD, IDA, IFC and MIGA – will help developing countries resume growth and respond to the health, social, and economic impacts of Covid-19 as they work toward a sustainable and inclusive recovery.”

The report also finds that many of the new poor will be in countries that already have high poverty rates. A number of middle-income countries will see significant numbers of people slip below the extreme poverty line. About 82 per cent of the total will be in middle-income countries, the report estimates.

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