What Is the Impact of the COVID-19 Pandemic on Poverty?
From September 2022, within a mere six-month timeframe, an additional 11 million individuals have plunged into the depths of extreme poverty as of April 2023, surviving on a meager $2.15 or less per day. Consequently, the global tally of impoverished individuals now reaches a staggering 659 million, as reported by the World Bank and their research data via the Poverty and Inequality Platform.[1]
The International Monetary Fund (IMF) forecast that global growth would decline by 4.9 percent in 2020, with a particularly adverse effect on low-income households. In it’s April 2023 update, the global growth forecast declined further down to 2.5 percent–the weakest growth since the global downturn of 2001. This imperils progress made in reducing extreme poverty worldwide since the 1990s.
When it comes to predicting the impact of COVID-19 and the world’s next epicenter the outcome is anyone’s guess. But this much is certain: impact of COVID-19 on poverty, as well as the impact of COVID-19 on migration, has been pronounced, with a significant increase in the numbers of people living in extreme poverty.
“In economies with declining infection rates, the slower recovery path in the updated forecast reflects persistent social distancing into the second half of 2020; greater scarring (damage to supply potential) from the larger-than-anticipated hit to activity during the lockdown in the first and second quarters of 2020; and a hit to productivity as surviving businesses ramp up necessary workplace safety and hygiene practices,” the agency said in an update to its World Economic Outlook.[3]
Others echo this outlook. Researchers at the United Nations (UN) University’s World Institute for Development Economics Research say the pandemic threatens to create a “new era” of poverty by pushing 8 percent of the global population into dire circumstances.
“If realized, it would represent the first increase in global poverty since 1990 and have grave implications for achieving development objectives such as the Sustainable Development Goals,” their report said. “‘We’re living in a whole new era,’ said co-author of the working paper, Andy Sumner, professor of international development at King’s College London.[4]
Reports from the U.S. and other nations illustrate the practical impact of isolation and social-distancing restrictions. When Florida’s agricultural communities became centers for infection last spring, it threatened the forecast for picking of fruit and other vegetables up the Eastern Seaboard, along with the incomes of migrant laborers.
“We’re afraid,” Angelina Velasquez told the New York Times of her reluctance to leave a tomato-rich area of south Florida for a blueberry harvest further north. “But where am I supposed to go? There is no work here.” Observed the newspaper: “As is the case with agricultural communities around the country, Florida’s farming regions have a high degree of built-in risk. Fruit and vegetable workers toil close to each other in fields, ride buses shoulder-to-shoulder and sleep in cramped apartments or trailers with other laborers or several generations of their families.”[5]
Similar conditions prevailed in Mexico too, which soon after Velasquez’s comments became an epicenter for the pandemic. It spread across Latin America and into South America, causing Colombia’s worst recession in more than a century.[6] Such stories were repeated in places like India and other parts of South Asia, the Middle East, and the United Kingdom.
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