In 2021, the COVID-19 lockdown measures around the world are expected to add as many as 150 million extreme poor.
Global extreme poverty is expected to increase in 2020 for the first time in over 20 years. The disruption caused by the COVID-19 pandemic compound both the effects of conflict and climate change, which were already slowing poverty reduction progress, the World Bank says.
Due to the magnitude of the economic downturn caused by the COVID-19 pandemic an additional 88 million to 115 million people are expected to be driven into extreme poverty this year, with the number increasing to 150 million by 2021.
According to the Poverty and Shared Prosperity Study, extreme poverty, described as living on less than $1.90 a day, would affect between 9.1 percent and 9.4 percent of the world’s population in 2020. This will be a reversion to the 9.2 percent pace seen in 2017.
The poverty rate was projected to drop to 7.9% in 2020 if the pandemic had not hit the planet.
According to World Bank Group President David Malpass, “the pandemic and global recession will cause over 1.4 percent of the world’s population to fall into extreme poverty.”
“Countries would need to plan for a different economy post-COVID, enabling money, labour, expertise, and creativity to migrate into new businesses and sectors, in order to reverse this serious setback to development progress and poverty reduction.”
“Support from the World Bank Community, including IBRD, IDA, IFC, and MIGA, will help developing countries re-establish growth and respond to COVID-19’s health, social, and economic effects as they work toward a more sustainable and inclusive recovery.”
Many of the new poor would live in countries with high poverty rates, according to the study.
Large numbers of people would fall below the extreme poverty line in a number of middle-income countries.
According to the study, middle-income countries will account for around 82 percent of the total.
According to the World Bank, the combination of the COVID-19 pandemic with conflict and climate change would make the 2030 target of ending poverty unattainable unless rapid, meaningful, and substantial policy action is taken.
The global poverty rate could be about 7% by 2030.
Extreme poverty, which has historically afflicted people in rural areas, is projected to affect a growing number of people in rural areas.
Well before the COVID-19 crisis, progress was slowing. According to new global poverty statistics for 2017, 52 million people were lifted out of poverty between 2015 and 2017.
Despite this development, between 2015 and 2017, the rate of reduction slowed to less than half a percentage point per year. Between 1990 and 2015, global poverty fell at a rate of about 1 percentage point per year.
The World Bank calculates poverty lines of $3.20 and $5.50, which represent national poverty lines in lower-middle-income and upper-middle-income countries, respectively, in addition to the $1.90 a day international poverty line.
The study also assesses poverty on a multifaceted scale, including access to education and basic infrastructure.
Although less than a tenth of the world’s population lives on less than $1.90 per day, nearly a fifth of the world’s population lives on less than $3.20 per day, and nearly 40% of the world’s population – nearly 3.3 billion people – lives on less than $5.50 per day.
The COVID-19 crisis has also harmed shared prosperity, which is characterised as income growth for the poorest 40% of a country’s population. Due to lower average income growth, global shared prosperity is expected to stagnate.
The pandemic’s acceleration in economic activity is likely to strike the poorest people the hardest, leading to even lower mutual prosperity measures in the coming years.
In the period 2012-2017, shared prosperity increased in 74 of the 91 economies for which data was available, indicating that growth was inclusive and the incomes of the poorest 40% of the population increased.
Development benefited the poorest people in 53 of those countries more than the rest of the population.
For the period 2012-2017, global shared prosperity (income growth for the bottom 40%) averaged 2.3 percent.
This implies that unless policymakers intervene, the COVID-19 crisis will likely result in increased income inequality, lower social mobility among the vulnerable, and reduced resilience to future shocks.
In order to ensure long-term progress in poverty reduction, the report makes an urgent plea for unity on the part of everyone, not just those in the COVID zone, but especially amongst the vulnerable people everywhere around the world