SEATTLE, Washington — The coronavirus has caused poverty levels to increase at a rate unimaginable before the pandemic. The people being pushed into extreme poverty are those living right above the poverty level who work jobs that have low security. This increase in extreme poverty will be the highest increase in the global count since 1999. The rise in poverty due to COVID-19 is only one of the many negative effects of this virus.
Some of the Data
Only 10% of 183 economies will not experience declining levels of gross domestic product (GDP). While GDP isn’t the strongest indicator of poverty and doesn’t have a strong correlation with poverty, it is one of many economic indicators of how well a country’s economy is doing. According to several NGOs, this rise in extreme poverty levels wasn’t supposed to happen for another two decades. However, the pandemic has accelerated this growth in poverty levels.
Recently, the World Bank stated that the effects of the pandemic will cause 60 million people to fall into poverty. That is mainly due to economic shutdowns and large costs related to the pandemic. Using comparisons from new poverty projections with ones before COVID-10 allows the World Bank to gather this data. Along those same lines, incomes will reduce by 3.6%, rendering more people impoverished, especially those that are right above the poverty level.
Worsening Situation
The rise in poverty due to COVID-19 is a difficult situation to overcome. It is even more taxing on developing countries. Due to the populations having weaker immune systems, COVID-19 poses a significant threat. High blood pressure and diabetes are crucial factors in causing severe cases. Unfortunately, these are all common in developing countries, thus worsening the problem. As lockdowns ensue, unemployment increases and incomes reduce. The question arises whether to have a lockdown that cuts out people’s income, or to continue with economic operations putting everyone at risk of COVID-19. It is a difficult decision when those living in poverty feel the brunt of the economic shutdown’s effects.
What is essential is a set of social-safety programs that enable families to stay afloat. Such programs already exist, however, expansion is quite necessary. These policies include food-vouchers and universal one-off cash. Donors and the national government fund these programs. Examples of such programs include Thailand’s job retention operations that pay a fixed amount of the worker’s earnings.
Morocco does something similar to Thailand’s program for those whose jobs have been temporarily suspended. Developing countries are responding to the COVID-19 crisis. But according to Economics of Inclusive Poverty, the country’s government will need to have more creative solutions to ensure that it is accessible for all of the poor while incentivizing high-wage workers to contribute.
Into the Future
COVID-19’s effects on global poverty will be long-lasting. As it stands, everyone is currently relying on the creation and distribution of a potential vaccine. Additionally, even as the vaccine is developed, there is no telling how long it would take to distribute worldwide. As a result, the U.N. Secretary-General is working on convincing the G-20 to end tariffs and waive sanctions. Doing so would allow more countries to obtain the medical supplies they need.
Additionally, he is urging the G-20 to pass a trillion-dollar stimulus package for developing countries. On the other hand, people are finding ways to combat COVID-19 itself. Due to impoverished circumstances, 40% of people worldwide don’t have soap or water. UNICEF has provided sanitation products to those in need, in order to combat COVID-19.
In conclusion, the rise in poverty due to COVID-19 is affecting people worldwide. Populations in developing countries are especially affected. Many countries are doing their best to avoid the inevitable rise in poverty; however, the pandemic accelerated the rise of poverty rates by two decades. If more social programs are implemented, these could help soften the impact of COVID-19 for many. Furthermore, if the G-20 countries eliminate tariffs and sanctions, third-world countries could finally receive the medical supplies they need.
– Rishika Kenkre
Photo: Flickr