150 million people could face extreme poverty due to Covid-19

CAPE TOWN- The World Bank revealed on Wednesday that the Covid-19 pandemic could push as many as 150 million people into extreme poverty by the end of 2021.

Extreme poverty is defined as living on less than $1.90 or R32 a day. According to the biennial Poverty and Shared Prosperity Report, around 9.1 percent and 9.4 percnt of the world’s population are living in extreme poverty in 2020.

Had the pandemic not convulsed the globe, the poverty rate was expected to drop to 7.9 percent in 2020. Essentially, the pandemic has affected more than three years of progress in poverty reduction.

World Bank Group President David Malpass said that the Covid-19 pandemic and global recession may cause over 1.4 pecent of the world’s population to fall into extreme poverty.

“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, labor, skills, and innovation to move into new businesses and sectors. World Bank Group support will help developing countries resume growth and respond to the health, social, and economic impacts of Covid-19 as they work toward a sustainable and inclusive recovery,” he said.

The Poverty and Shared Prosperity Report also estimates that around 82 percent of the total “new poor” will be in middle-income countries, and in countries that that already have high poverty rates.

While close a tenth of the world’s population lives on less than $1.90 a day, almost a quarter of people live below the $3.20 line and more than 40 percent of the world’s population – almost 3.3 billion people – live below the $5.50 line.

The World Bank said in order to get back on a track of poverty reduction, countries will need collective action to control the virus and build more resilient economies once the pandemic subsides.

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