Coronavirus Crisis Could Plunge Half a Billion People into Poverty: Oxfam

The coronavirus spread that killed more than 83,000 people and wreaked havoc on economies around the world could drive about half a billion people into poverty, Oxfam said on Thursday.

The report released by the Nairobi-based charity before the annual meeting of the International Monetary Fund (IMF)/World Bank next week estimated the effect of the crisis on global deprivation owing to a fall in household income or consumption.

“The economic crisis that is rapidly unfolding is deeper than the 2008 global financial crisis,” the report found.

“The estimates show that, regardless of the scenario, global poverty could increase for the first time since 1990,” it said, adding that this could throw some countries back to poverty levels last seen some three decades ago.

The report authors played through a number of scenarios, taking into account the World Bank’s various poverty lines - from extreme poverty, defined as living on $1.90 a day or less, to higher poverty lines of living on less than $5.50 a day.

Under the most serious scenario-a, a 20% reduction in the income-the the number of people living in extreme poverty would rise from 434 million to 922 million worldwide. In the same scenario, the number of people living below the $5.50 per day threshold would rise to almost 4.0 billion by 548 million.

Women are at more risk than men, as they are more likely to work in the informal economy with little or no employment rights.

“Living day to day, the poorest people do not have the ability to take time off work, or to stockpile provisions,” the report warned, adding that more than 2.0 billion informal sector workers worldwide had no access to sick pay.

The World Bank last week said poverty in East Asia and the Pacific region alone could increase by 11 million people if conditions worsened.

To further alleviate the effect, Oxfam launched a six-point action plan to offer cash grants and bailouts to individuals and companies in need and also called for debt reduction, expanded IMF funding, and expanded assistance. Taxing income, incredible earnings, and risky financial instruments will help collect the requisite funds, Oxfam added.

Calls for debt relief have increased in recent weeks as the fallout from the COVID-19 pandemic has roiled developing nations around the world.

In total, governments around the world would need to mobilize at least $2.5 trillion to support developing nations.

“Rich countries have shown that at this time of crisis they can mobilize trillions of dollars to support their own economies,” the report said.

“Yet unless developing countries are also able to fight the health and economic impacts the crisis will continue and it will inflict even greater harm on all countries, rich and poor.”

Source: Reuters