COVID-19: 150 million risk extreme poverty, says World Bank

The COVID-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, the World Bank said on Wednesday.

It said the number of new extremely poor people would rise to as many as 150 million by 2021, depending on the severity of the economic contraction.

“Global extreme poverty is expected to rise in 2020 for the first time in over 20 years as the disruption of the COVID-19 pandemic compounds the forces of conflict and climate change, which were already slowing poverty reduction progress,” the World Bank in a new report.

Extreme poverty, defined as living on less than $1.90 a day, is likely to affect between 9.1 percent and 9.4 percent of the world’s population in 2020, according to the biennial ‘Poverty and Shared Prosperity Report’.

This would represent a regression to the rate of 9.2 percent in 2017, the bank said, adding that had the pandemic not convulsed the globe, the poverty rate was expected to drop to 7.9 percent in 2020.

“The pandemic and global recession may cause over 1.4 percent of the world’s population to fall into extreme poverty,” said the President, World Bank Group, David Malpass. 

He said in order to reverse this serious setback to development progress and poverty reduction, countries would 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 support—across IBRD, IDA, IFC and MIGA—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.”

The report also finds that many of the new poor will be in countries that already have high poverty rates.

It said a number of middle-income countries would see significant numbers of people slip below the extreme poverty line.

About 82 percent of the total will be in middle-income countries, the report estimates.

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, the World Bank said.

Increasing numbers of urban dwellers are expected to fall into extreme poverty, which has traditionally affected people in rural areas.