LONDON – The impact of the spread of the corona virus that has killed more than 83,000 people and wreaked havoc on economies around the world could push about half a billion people into poverty, Oxfam said on Thursday.
The report released by the Nairobi-based charity ahead of the International Monetary Fund (IMF) annual meeting next week calculates the impact of the crisis on global poverty due to shrinking household income or consumption.
“The rapid economic crisis is deeper than the 2008 global financial crisis,” the report said.
“Estimates show that, regardless of the scenario, global poverty can increase for the first time since 1990,” he said, adding that this could bring some countries back to the poverty levels last seen about three decades ago.
The authors of the report play through a number of scenarios, taking into account various World Bank poverty lines – from extreme poverty, defined as living on $ 1.90 a day or less, to a higher poverty line living on less than $ 5.50 a day.
Under the most serious scenario – a 20% contraction in income – the number of people living in extreme poverty will increase 434 million to 922 million worldwide. The same scenario would see the number of people living below the $ 5.50 per day threshold increase by 548 million to nearly 4 billion.
Women are more at risk than men, because they are more likely to work in the informal economy with little or no work rights.
“Everyday life, the poorest people do not have the ability to take time off work, or to save supplies,” the report warns, adding that more than 2 billion informal sector workers worldwide do not have access to sick pay.
The World Bank said last week poverty in East Asia and the Pacific alone could increase by 11 million people if conditions worsened.
To help reduce the impact, Oxfam proposed a six-point action plan that would provide cash assistance and bailout to people and businesses in need, and also called for debt cancellation, more IMF support, and increased aid. Tax assets, extraordinary profits, and speculative financial products will help increase the funds needed, Oxfam added.
Calls for debt relief have risen in recent weeks because the effects of the COVID-19 pandemic have rocked developing countries around the world.
In total, governments around the world need to mobilize at least $ 2.5 trillion to support developing countries.
“Rich countries have shown that at this time of crisis they can mobilize trillions of dollars to support their own economies,” the report said.
“But unless developing countries are also able to combat the health and economic impacts, the crisis will continue and it will cause greater harm to all countries, rich and poor.”
(Reporting by Karin Strohecker, Editing by Rosalba O’Brien)
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