World Bank: Coronavirus pushed around 100 Million People into extreme poverty

“The convergence of the Covid-19 pandemic with the pressures of conflict and climate change will put the goal of ending poverty by 2030 beyond reach without swift, significant and substantial policy action”

covid food lines delhi world bank
Homeless migrant workers in New Delhi wait in food lines.

For the first time since 2000, there has been an uptick in the acceleration of extreme global poverty. The World Bank reported on October 7th that between 88 and 114 million people had been thrown into extreme poverty because of COVID-19, and an expected 150 million people will be in the same position by the end of this year.

The World Bank’s estimates show a much more dire situation than previously expected. For example, Bill & Melinda Gates Foundation reported 37 million people went into extreme poverty because of the pandemic.

The new estimates show that a between 703 and 729 million people are in extreme poverty- defined as living on less than $1.90 a day- and that the number could rise further in 2021. Before the pandemic struck, the number of people in in extreme poverty was estimated at 615 million for 2020.

At least 9.1 to 9.4% of the world’s population will fall into extreme poverty in 2020. This is not too different from the poverty rate in 2017, which was at 9.2%. But before the COVID-19 pandemic, the poverty rate was expected to drop to 7.9% in 2020. And between 1990 and 2015 global poverty was decreasing by 1 point every year. This reversal of poverty reduction is by far the largest increase since 1990, when the World Bank first started recording these rates.

“This is the worst setback that we’ve witnessed in a generation,” said Carolina Sánchez-Páramo, global director of the World Bank’s Poverty and Equity Global Practice.

Even during the financial crisis and global recession of 2008, the number of people in extreme poverty was still on the decline because of the continued growth of emerging markets of India and China.

Before this, the most severe setback was in 1998, after the Asian financial crisis threw tens of millions of people into extreme poverty. This setback proved to be brief, and the figures completely rebounded by 1999.

The majority of the world’s extreme poor live in sub-Saharan Africa, where there has been little improvement, especially because of neo-colonial impositions. Even before the pandemic, the rate of poverty was at 40%, with around 440 million of the continent’s population was in extreme poverty. This is expected to rise to a rate of 42% this year, or 480 million people, due to the effects of the pandemic.

The new surge in poverty is expected to likely dash the hopes of the Sustainable Development Goals to eradicate extreme poverty by 2030.

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