COVID-19 not just a killer, it's also fueling poverty

AFP

The World Bank said on Wednesday that the coronavirus pandemic could push as many as 150 million people into extreme poverty by the end of 2021, wiping out more than three years of progress in poverty reduction.

Releasing its flagship biennial report on poverty and shared prosperity, the multilateral development lender said that an additional 88 million to 115 million people will fall into extreme poverty — defined as living on less than US$1.90 a day — in 2020.

The report said this could grow to 111 million to 150 million by the end of 2021. That would mean 9.1-9.4 percent of the world’s population would be living in extreme poverty this year, about the same as 2017’s 9.2 percent and representing the first rise in the extreme poverty percentage in about 20 years.

The 2019 extreme poverty rate was estimated at about 8.4 percent and had been expected to drop to 7.5 percent by 2021 before the pandemic.

The report said that without swift, substantial policy actions, a longstanding goal of cutting the rate to 3 percent by 2030 looked out of reach. “The pandemic and global recession may cause over 1.4 percent of the world’s population to fall into extreme poverty,” World Bank President David Malpass said in a statement, calling it a “serious setback to development progress and poverty reduction.”

The report found that many of the new extreme poor are in countries that have high poverty rates already, but around 82 percent of these are in middle-income countries, where the poverty line is defined as income of US$3.20 a day for low-middle-income countries and US$5.50 a day for upper-middle-income countries.

While extreme poverty has been concentrated in rural areas in the past, the World Bank report found that increasing numbers of urban dwellers have been thrown into extreme poverty as jobs dry up from lockdowns.

Sub-Saharan Africa has the highest concentration of those living on less than US$1.90 a day, and could see an increase of over 50 million by 2021.