Coronavirus could push global poverty past one billion mark, new study suggests

Increase would mark the first absolute rise in global poverty count since 1999

Samuel Lovett
Friday 12 June 2020 09:18
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The cost of the pandemic in lost income is estimated to reach $500 million per day for the world’s poorest people
The cost of the pandemic in lost income is estimated to reach $500 million per day for the world’s poorest people

The number of people in extreme poverty around the world could rise beyond 1 billion as a result of the Covid-19 crisis, new analysis has suggested.

Figures from the World Bank suggest that 736 million people currently live in destitution, surviving on less than $1.90 a day (£1.53).

But in a study published on Friday, researchers at King’s College London and Australian National University have warned that the pandemic could trigger “substantial” poverty increases and reverse decades’ worth of progress.

Different scenarios of consumption and income contraction during lockdown were modelled to establish the economic shock of Covid-19 at three poverty levels – $1.90, $3.20 (£2.58) and $5.50 (£4.43) per day.

The study found that an additional 395 million people across the world could be forced below the $1.90 line by the pandemic.

This figure rises to 527 million people when considering the highest poverty classification of $5.50 a day. In this scenario, more than one-sixth of the world’s population would be living in some form of extreme poverty.

These increases would mark the first absolute rise in the global poverty count since 1999, the study said, adding that the cost of the pandemic in lost income is estimated to reach $500m (£394m) per day for the world’s poorest people.

“Millions of people live in a precarious position one shock away from poverty,” Andy Sumner, co-author of the study and an international development professor at King’s College London, told the The Independent. “The current crisis could be that shock that pushes them over the edge.”

Dr Sumner warned that the distribution and location of global poverty could also shift away from sub-Saharan Africa towards developing and middle-income countries in south and east Asia, such as Indonesia, the Philippines and Bangladesh.

“The narrative for a few years has been poverty is becoming more and more about sub-saharan Africa,” he said. “But because there is a lot of people just above the poverty line in different parts of Asia, which has a lot of very populous countries, we could easily see a relocation of the overall picture of global poverty.

“We tend to see the world’s poor as focused in incredibly poor countries, but most live in countries that have been doing okay, at least until Covid-19. Now there’s an awful lot of people who have moved just above the poverty who could quite easily fall back.”

The study, which was published by the United Nations University World Institute for Development Economics Research (UNU-WIDER), called for urgent action from global leadership to address the impact of Covid-19 on world poverty.

Writing for The Independent, Dr Sumner proposed three forms of action to counter the effects of the pandemic. These are:

  • Creating a rapid-response global commission on poverty and Covid-19 chaired by a G7 leader, a G20 leader and a G77 leader to discuss the poverty impacts and what financing is needed
  • Releasing funds quickly by expanding the existing IMF debt servicing standstill to all developing countries and freezing World Bank debt repayments at least until the end of 2020
  • Swiftly allocating the newly available funds into countries’ own cash transfer and other social safety programmes

“The actual poverty impacts will be determined by what governments do to mitigate the damaging consequences of the pandemic,” he added. “The world’s poorest can’t wait until the G7 meet in September or the G20 meet in November.”

Pointing to the example of the Asian financial crash of the late 1990s, which saw a number of government regimes reshaped and reformed in the aftermath, Dr Sumner said the sharp increases in poverty from Covid-19 could similarly “lead to major social upheaval of some kind” in the global south.

The researchers also raised concern over the distribution of a Covid-19 vaccine among the developing world, saying “there is no guarantee everyone would get it for free” while highlighting how it could reshape social lines.

“Will we end up living in a new Covid-19 apartheid with the vaccinated and non-vaccinated residing in separate areas and working in different labour markets? While this might sound far off, already now there are some countries issuing ‘immunity passports’,” the paper says.

Professor Kunal Sen, director of UNU-WIDER, described the new poverty estimates as “sobering”. “We cannot stand by and see the hard work and effort of so many be eradicated,” he said.

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