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Coronavirus | Pandemic could push 150 million into extreme poverty, says World Bank

10th October, 2020 Poverty and Hunger

World Bank’s biennial Poverty and Shared Prosperity Report findings:

  • Global extreme poverty is expected to rise for the first time in 20 years because of the disruption caused by COVID-19, exacerbating the impact of conflict and climate change, which were already slowing down poverty reduction.
  • The pandemic may push another 88 million to 115 million into extreme poverty or having to live on less than $1.50 per day, resulting in a total of 150 million such individuals.
  • Some 9.1% to 9.4% of the world will be affected by extreme poverty in 2020, compared to 7.9% in the counterfactual scenario where the pandemic had not raged across the world.
  • The coronavirus crisis could set back progress on reducing global poverty by 20 or even 30 years.
  • Study warns of poverty surge to over 1 billion due to coronavirus
  • Many of the newly poor individuals will be from countries that already have high poverty rates while many in middle income countries (MICs) will slip below the poverty line. Some 82% of the total will be in MICs.

Reversing the setbacks

  • “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 will help developing countries resume growth and respond to the health, social, and economic impacts of COVID-19.

Lack of data in India

  • As the government decided not to release the 2017-18 All India Household Consumer Expenditure Survey data from the 75th Round, there is an “important gap in understanding poverty in South Asia”,
  • Consequently, the Bank has estimated India’s poverty numbers for 2017 based on “strong assumptions”, resulting in “considerable uncertainties”.
  • Results in the report are incomplete, or uncertain because of the lack of data from India which, as per the report, accounted for 139 million of the 689 million people living in poverty in 2017.