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CORONAVIRUS IS PULLING MILLIONS BACK INTO POVERTY

Introduction to expected increase in Poverty

The gains the world was making in fighting poverty are now at grave risk.

  • The World Bank says that for the first time since 1998, global poverty rates will rise.
  • By the end of the year 2020, 8% of the world’s population — half a billion people — could be pushed into destitution, largely because of the wave of unemployment brought by virus lockdowns.
  • The financial shock waves could linger even after the virus is gone.

Who will be hit the hardest?

  • The developing world will be hardest hit.
  • The World Bank estimates that sub-Saharan Africa will see its first recession in 25 years, with nearly half of all jobs lost across the continent.
  • South Asia will likely experience its worst economic performance in 40 years.
  • Informal Sector: Most at risk are people working in the informal sector, which employs 2 billion people who have no access to benefits like unemployment assistance or health care.

Gains lost

  • The gains now at risk are a stark reminder of global inequality and how much more there is to be done.
  • In 1990, 36% of the world’s population, or 1.9 billion people, lived on less than $1.90 a day.
  • By 2016, that number had dropped to 734 million people, or 10% of the world’s population, largely because of progress in South Asia and China.
  • Some of the biggest gains were made in India, where 210 million people were lifted out of poverty from 2006 to 2016, according to the UN.
  • But all this progress may be reversed, experts worry, and funding for anti-poverty programmes may be cut as governments struggle with stagnant growth rates or economic contractions as the world heads for a recession.
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October 2022
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