Singapore (20 Oct 2020) – Economic contractions worldwide brought about by the COVID-19 pandemic will push an additional 88 to 115 million people into extreme poverty, taking the number living under USD 1.60 a day to as high as 150 million next year.
While many of the new poor will be in countries that have high poverty rates, a number of middle-income countries will see significant numbers of poor people slipping below the extreme poverty line. Increasing numbers of urban dwellers too are expected to fall into extreme poverty, which has traditionally affected people in the rural areas, said The World Bank.
In its biennial report on Poverty and Shared Prosperity released earlier this month, the bank said disruptions caused by the pandemic are compounding effects from the forces of conflict and climate change, which were already slowing the progress in poverty reduction efforts.
The World Bank calls for collective action to ensure years of progress in poverty reduction are not erased. The World Bank will be deploying up to USD 160 billion in financial support over 15 months to help more than 100 countries to protect the poor and the vulnerable, support businesses and bolster economic recovery. This includes USD 50 billion of new IDA (International Development Association) resources through grants and highly concessional loans.
According to the World Bank poverty reduction efforts were bearing fruits, although they started to slow just before the outbreak of the pandemic. Some 52 million people climbed out of poverty between 2015 and 2017. Despite the progress, however, the rate of reduction slowed to less than half a percentage point per year between 2015 and 2017, down from 1% point per year between 1990 and 2015.
While less than a tenth of the world’s population live on less than USD1.90/day, close to a quarter of the world’s population live below the USD3.20/day line and more than 40% of the world’s population – almost 3.3 billion people – live below the USD 5.50/day line.
In addition to USD1.90 per day international poverty line, the World Bank measures poverty lines of USD 3.20 and USD 5.50 reflecting national poverty lines in lower middle-income and upper middle-income countries. It also measures poverty across a multidimensional spectrum that includes access to education and basic infrastructure.
Covid-19 has also diminished “shared prosperity” – defined as the growth in the income of the poorest 40% of a country’s population. The deceleration in economic activity intensified by the pandemic will hit the poorest people especially hard, leading to even lower shared prosperity indications in coming years. -/- Source: The World Bank Press Release 7 Oct. 2020.
