Economic Fallout Due to Coronavirus Could Push 1bn to Extreme Poverty
Last updated on September 19th, 2020
As scientists struggle to find a cure for the novel coronavirus, the worldwide infections toll has crossed 7.15 million with more than 408K deaths recorded. The economic fallout due to the pandemic has forced many small enterprises to shut, while making millions of people jobless.
A report published by UNU-WIDER – part of the United Nations University, claims that the global poverty level would further widen due to the pandemic. The report says an extra 395 million people will fall into extreme poverty, with the total number of those living on less than US$1.90 a day worldwide rising to more than 1 billion.
The report has been based on a number of scenarios, considering the World Bank’s various poverty lines – from extreme poverty, defined as living on US$1.90 a day or less, to higher poverty lines of living on less than US$5.50 a day.
In worst case scenario like a 20 percent contraction in per capita income or consumption, the number of people that will be impacted by the economic fallout and live under extreme poverty could go up to 1.12 billion worldwide. Considering that the same contraction is applied to the US$5.50 threshold among upper-middle income, more than 3.7 billion people or a little more than half of the world’s population will fall below the poverty line.
“The outlook for the world’s poorest looks grim unless governments do more and do it quickly and make up the daily loss of income the poor face. The result is progress on poverty reduction could be set back 20-30 years and making the UN goal of ending poverty look like a pipe dream,” said Andy Sumner, one of the report’s authors.
According to the researchers from King’s College London and Australian National University, poverty is expected to shift in its geographic distribution. South Asia region, which has an overly populated country India, is at a major risk of sinking into extreme poverty due to the economic fallout.
Africa, another populous region, is just behind South Asia in terms of the poverty risk factor. The World Bank on Monday stated that the pandemic could push around 70-100 million people into extreme poverty.
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