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The unseen effect of COVID on World Poverty

We all know that COVID is taking its toll on the whole world, even more than what various experts predicted at the start of phase 1. The impact has been clearly seen in the economies of various countries; however, what is not much visible amidst all these chaos is increasing poverty rate or rather doubling. Let’s start with knowing the impact of the deadly virus on global poverty? A report stated that it is pushing about 40-60 million people into extreme poverty, with the best estimate being 49 million (World Bank Blogs).

“The pandemic and global recession may cause over 1.4% of the world’s population to fall into extreme poverty,” said World Bank Group President David Malpass. “In order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-COVID, by allowing capital, labour, skills, and innovation to move into new businesses and sectors. World Bank Group support—across IBRD, IDA, IFC and MIGA—will help developing countries resume growth and respond to the health, social, and economic impacts of COVID-19 as they work toward a sustainable and inclusive recovery.”

Poverty has always been existed, then what changes now?
• A large share of the new extreme poor will be concentrated in countries that are already struggling with high poverty rates and numbers of poor.
• The increase in the extreme poverty rate and the number of extreme poor are projected to be significantly higher under both the baseline and downside scenario if inequality were to increase as a consequence of the crisis. While some say it might double the poverty rate in developing countries.

According to a few experts, poverty projections suggest that the economic and social impacts if the crisis are likely to be quite significant.

A briefing from the Oxford Poverty and Human Development Initiative (OPHI) says that India tops the list of 10 countries most vulnerable to the virus; others include the poorest in China, Pakistan, Nigeria, Indonesia, Uganda and Afghanistan.

The research by King’s College London and the Australian National University points to poverty increasing dramatically in middle-income developing countries, where millions of people live just above the poverty line. India, Indonesia, Pakistan and the Philippines, are considered to be particularly vulnerable to the pandemic’s economic shockwaves, the King’s College London research says.

In the second week of April 2020, the UN’s International Labour Organization (ILO) claimed that about 400 million workers from India’s informal sector are likely to be pushed deeper into poverty due to Covid-19. There is no dispute that poverty in the country will worsen, but the question is, by how much?

This pandemic is as much a social and economic crisis as it is a humanitarian one. Considering the uncertain path that lies ahead, helping the country’s poor become self-sufficient and better prepared can prove to be the best weapon against the deadly virus, and such a DBT can go a long way in that.

The new analysis by the UN Women and the UN Development Programme (UNDP) said the COVID-19 crisis will dramatically increase the poverty rate for women and widen the gap between men and women who live in poverty. The poverty rate for women was expected to decrease by 2.7 per cent between 2019 and 2021, but projections now point to an increase of 9.1 per cent due to the pandemic and its fallout.

The “pandemic will push 96 million people into extreme poverty by 2021, 47 million of whom are women and girls. This will increase the total number of women and girls living in extreme poverty to 435 million, with projections showing that this number will not revert to pre-pandemic levels until 2030,” the UN agencies said.

By Karishma Gwalani

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