Coronavirus Could Drive Half a Billion People Into Poverty: Oxfam
Wed, April 21, 2021

Coronavirus Could Drive Half a Billion People Into Poverty: Oxfam

 

 

Since 1990, a quarter of the world has risen out of extreme poverty, showing how the world is making huge strides in overcoming global poverty. However, statistics reveal that many countries that have the most marginalized communities are barely coping. More than 700 million people live in extreme poverty, surviving on less than $1.90 a day. More than half of this number live in Sub-Saharan Africa.

 

Global Poverty in Numbers

WorldVision.org, the world's largest international children's charity, reported that the number of people living in extreme poverty in the Middle East and North Africa nearly doubled in two years, from 9.5 million to 18.9 million, mainly due to the crises in Syria and Yemen. Africa also accounts for over 60% of global poverty. Last 2018, it was over 70%. By 2030, it could be close to 90%. This shows that the region remains the last frontier of the world’s effort to end extreme poverty by 2030.

The 2018 survey conducted by the UN Development Program also revealed that 1.3 billion people in 104 developing countries, which account for 74% of the world’s population, live in multidimensional poverty. If the factors that contribute to the worsening poverty are left unaddressed, an estimated 80% of the world’s extreme poor will live in fragile contexts by 2030. 

Previous reports also showed the progress of several countries in eradicating poverty. India, for instance, has been reducing extreme poverty fast. The impacts of this will result in a level of extreme poverty in India today of 50 million people, which will come down to 40 million (a poverty rate of below 3%) by the next years. Unfortunately,  the success of our efforts to eradicate poverty may be in vain due to coronavirus. 

The virus has already infected nearly two million people and killed thousands from over 200 countries. The pandemic has revealed huge inequalities, affecting the most marginalized communities. These inequalities will likely worsen poverty in the next years to come. 

 

 

Coronavirus Pandemic Threatens to Push Half a Billion People into Poverty

The pandemic has instilled fears of large-scale unemployment and poverty. Millions of people are afraid of how this crisis could impact them in the long run. Unfortunately, recent studies show that addressing the impacts of this pandemic will not be easy for all of us. 

Oxfam, a Nairobi-based charity, released a report that calculated the impact of the crisis on global poverty ahead of next week's International Monetary Fund (IMF)/World Bank annual meeting. According to the World Economic Forum, an independent international organization committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas, the report revealed that the pandemic threatens to push around half a billion people into poverty. 

The report stated that the economic crisis due to the pandemic 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,” the report said. The researchers added that this could throw some countries back to poverty levels last seen some three decades ago. It suggests that the number of people living in poverty will increase between 6% and 8% compared to 2018 levels. This is mainly due to economies shutting down to try and mitigate the spread of the virus.

The International Labor Organization reported that the pandemic could lead to the loss of nearly 25 million jobs worldwide, more than in the 2008 Great Recession. The good news is that wealthy nations like the US and the UK can boost their economies through their stimulus packages. However, developing countries lack the resources to do the same. Also, the researchers discovered that women are at more risk than men as they are more likely to work in the informal economy with little or no employment rights.

“Those who have the least are being hit the hardest, and this worrying new research shows that the pandemic could force half a billion more people around the world into poverty. The choices being made now could have profound implications for our collective future,” Oxfam head Danny Sriskandarajah said.

 

 

According to Forbes, a global media company, focusing on business, investing, technology, entrepreneurship, leadership, and lifestyle, the impacts of the pandemic will not only increase global poverty for the first time since 1990 but also lose up to a decade of progress in reducing poverty. Under the most serious scenario involving a 20% contraction in income, an additional 548 million people would be earning less than $5.50 per day. The UN also warned that this crisis could lead to the loss of nearly half of all jobs in Africa due to the disruption of supply chains as a result of border closures.

Co-author Andy Sumner, an international development professor at King’s College London, said that many developing countries would suffer because of their informal economies. Many people are forced to continue working despite lockdowns, and ILO identified these workers as the most at risk. According to The Guardian, a British daily newspaper, the worst impacts were likely to be felt in South Asia and sub-Saharan Africa. The report estimated that 80% of people newly forced into poverty would be located in these regions. 

Additionally, they estimate that it could cost $2.5 trillion to support developing countries through the pandemic. It would also require an additional $500 billion in aid from foreign countries, many of which are facing recessions of their own.

Oxfam suggested that a new global economic plan should include the cancellation of $1 trillion of debt owed by developing countries. Instead, this amount should be put into an international reserve that countries could use to build up their health systems. “Our world is facing a huge challenge, but we can get through it if we pull together. Next week’s World Bank and G20 meetings are an important opportunity for world leaders to collaborate on a joint economic rescue package to protect the most vulnerable people,” Sriskandarajah said.