Poor outlook: Covid-19 has likely caused global addition to extreme poverty to quadruple from the ‘no pandemic’ projection

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January 14, 2021 3:50 AM

A recent analysis published on World Bank Blogs makes the impact stark—the authors had forecasted, on the basis of growth outlook in June’s Global Economic Prospect, that between 88 million and 115 million people across the globe would be pushed into extreme poverty in 2020; now, on the basis of the January numbers, they have revised this to 124 million.

The authors have termed this rise “the first ever significant growth in poverty in this millennium”. The Asian financial crisis (AFC) had resulted in an 18-million addition to global extreme poverty.The authors have termed this rise “the first ever significant growth in poverty in this millennium”. The Asian financial crisis (AFC) had resulted in an 18-million addition to global extreme poverty.

It was clear early on in the history of the Covid-19 pandemic that it would hit global growth in an unprecedented way, causing poverty to spike. A recent analysis published on World Bank Blogs makes the impact stark—the authors had forecasted, on the basis of growth outlook in June’s Global Economic Prospect, that between 88 million and 115 million people across the globe would be pushed into extreme poverty in 2020; now, on the basis of the January numbers, they have revised this to 124 million.

To put the numbers in perspective, only 31 million people would have fallen into extreme poverty had the pandemic not occurred. With recovery for many nations—and within these nations, specific sectors and specific type of business concerns—not immediately in sight, the addition to global poverty by the time the world gets some manner of control over the pandemic would be staggering.

The authors have termed this rise “the first ever significant growth in poverty in this millennium”. The Asian financial crisis (AFC) had resulted in an 18-million addition to global extreme poverty. While rapid economic growth post the AFC had also lifted millions out of poverty, a repeat of that story seems difficult; predictably, poverty eradication will be far more long-drawn than envisaged in the pre-pandemic.

Against such a backdrop, governments need to plan for relief to the socioeconomically marginalised before the impact of poverty starts to translate into an impact on health, education, etc, retarding poverty amelioration efforts further. Significantly, the authors noted that, in 2021, extreme poverty might not get reversed even after the availability of a vaccine—the number of Covid-19 induced poor may indeed rise to between 143 million and 163 million.

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