Charity group Oxfam has warned that a global recession caused by Covid-19 could push an extra half a billion people into poverty - 8 percent of the world's population - unless urgent action is taken.
Conducted by King’s College London and the Australian National University, the research gauged the short-term impact of containing the coronavirus on global monetary poverty based on the World Bank poverty lines of $1.90, $3.20 and $5.50 a day.
As Statista's Niall McCarthy details below, global poverty levels would increase under all three scenarios for the first time since 1990 according to the analysis with up to a decade of progress lost globally.
The impact is set to be even worse in some hard-hit parts of the world such as North Africa, Sub-Saharan Africa and the Middle East where up to 30 years of progress could be wiped out.
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The most serious scenario involves a 20 percent fall in income which would result in an additional 548 million people earning less than the World Bank poverty threshold of $5.50 per day. The United Nations has warned that $2.5 trillion is needed to support developing countries during the crisis and that nearly half of all Africa's jobs could be lost.
G20 ministers, The World Bank and the IMF met this weekend to discuss debt relief for poorer countries. Oxfam has urged them to agree to a global rescue package and mobilize the sum cited by the UN to avert a global economic collapse. Possible measures to raise the money could include the immediate cancellation of $1 trillion in debt, the IMF issuing a further $1 trillion in Special Drawing Rights, an increase in aid flows to struggling countries as well as the adoption of emergency solidarity taxes.
In fact, as we detailed earlier, hours after Pope Francis on Easter Sunday morning said the debt burden on the most impoverished countries should be forgiven (aka debt jubilee), the Financial Times is now reporting that the G20 group is nearing a critical "action plan" to freeze debt servicing payments for poor countries to stave off an emerging-market meltdown.
The new relief program could be finalized on April 15 on a videoconference of finance ministers and central bank governors. The plan would "freeze on sovereign debt repayments for six or nine months, or possibly through to 2021," the official told the Times.
The official said developed countries and multilateral institutions would use this period to write up "very clear criteria, country-by-country of what exactly is going to happen. Is it debt relief totally? Is it just a deferment, a rescheduling?"
"For debt relief to happen, it would take time for it to be co-ordinated," the official said.
"But what is immediately needed is to give these people space so they don't need to worry about the cash flow and debt servicing going to other countries, and they can use that money for their immediate needs," the official said, who did not want to be named due to the sensitivity of the discussions.