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Home News World

World Bank urges urgent action against extreme poverty

October 9, 2020
in World
World Bank urges urgent action against extreme poverty

As many as 115 million people could be pushed into poverty due to the economic downturn caused by the global pandemic according to the World Bank | AFP or licensors

By Fr. Benedict Mayaki, SJ

Oct 9 2020

A report by the World Bank highlights a marked increase in global extreme poverty rates this year spurred by the coronavirus pandemic and other long-existing factors.

Global efforts to end extreme poverty are suffering their worst setback in 25 years due to major challenges such as the ongoing Covid-19 pandemic, climate change and conflicts. The effects of these are felt by all countries, but particularly in those with large, poor populations according to a report by the World Bank.

The increase in poverty from 2019 to 2020, the report notes, is projected to be larger than any time since the World Bank started tracking poverty globally. This is the first projected increase since the 1998 Asian financial crisis which shook the global economy.

An estimated 115 million people will be affected by extreme poverty in 2020 according to the report released on Wednesday, titled “Poverty and Shared Prosperity 2020: Reversals of Fortune.”

Extreme poverty is defined as living on less than $ 1. 90 (£1.50) a day.

Pope Francis has repeatedly highlighted the need for a new economic model based on solidarity as we strive to set the foundations for a world that is more just and less violent.

Poverty statistics

Between 1990 and 2017, the number of extremely poor people fell from 1.9 billion to 689 million, according to the World Bank. Global extreme poverty dropped by an average of one per cent point per year between 1990 and 2015, but fell by less than half a percentage point per year between 2015 and 2017.

Before the pandemic, the extreme poverty rate was expected to drop to 7.9 percent in 2020. However, it is now likely to affect between 9.1 to 9.4 percent of the world’s population. The World Bank says that by 2021, as many as 150 million people could become extremely poor

While the coronavirus pandemic is a new obstacle, conflicts and climate change have been a major cause of the increase in extreme poverty in parts of the world for many years.

Poverty and conflict

According to the report, more than forty per cent of the poor live in conflict-affected countries as the effects of conflicts especially in its extreme forms – the destruction of assets, households and natural resources – often leave a legacy which is often difficult to recover from.  

For example, conflicts in Syria and Yemen nearly doubled the poverty rates in the Middle East and North Africa between 2015 and 2018.

Poverty and climate change

The World Bank reports high concentrations of poor people in regions facing the major challenge of climate change, including Sub-Saharan Africa and South Asia. This is largely due to the increase in food prices, exposure to disasters and poor health conditions that affect those populations.

The report projects that climate change will drive 68 million to 135 million people into poverty by 2030.

Poverty and Covid-19

The Covid-19 pandemic further compounds the effects of other long-existing causes of extreme poverty.  According to the report,  its impact could drastically increase the number of extremely poor people by 88 to 115 million, due to its disruption to international trade and travel, among others.

Besides, the pandemic’s effects have spread and affect populations that were previously spared. The “new poor”, the World Bank notes, are likely to be more urban and educated than the “chronic poor” who are more engaged in informal services and manufacturing. Middle-income countries like India and Nigeria may be home to approximately 75 percent of the new poor.

Addressing extreme poverty

The World Bank recommends responding to the urgent crisis in the short run, while continuing to focus on other foundational developmental problems, including climate change and conflict.

It proposes closing the gap between policy aspirations and their attainment in practice, enhancing the sharing of data on the novel coronavirus, investing in preparedness and preventive measures, and improving cooperation to form a better-shared sense of solidarity. – Vatican News

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