“New Poor” pushed into poverty!

Worldwide, economic instability, social stress, job losses, deprivation, virtual stagnation and lockdowns caused due to COVID-19 pandemic has hit the people hard and has pushed back life and time. As the world recovers from the pandemic crisis and countries take to address the future course of action, the World Bank Group’s new report — Poverty and Shared Prosperity 2020: Reversals of Fortune — presents new estimates of the impacts of COVID-19 on global poverty.

Based on new estimates of the impacts of COVID-19 on global poverty — Poverty and Shared Prosperity 2020: Reversals of Fortune — shows that pandemic has pushed already-poor and vulnerable people further into poverty, while also partly changing the profile of global poverty by creating millions of “new poor”. Additionally, the report deliberates on deepening income inequality, threatening inclusive economic recovery and future growth. However, it also presents how some countries are deploying agile, adaptive policies to reverse the crisis, protect the most vulnerable, and promote a resilient recovery.

Poverty and Shared Prosperity 2020: Reversals of Fortune’s new analysis suggests that the “new poor” may differ from those who were poor before the onset of the pandemic. The report’s “new poor” are more urban, better educated, and less likely to work in agriculture than those living in extreme poverty before COVID-19. Although a large share of the “new poor” will be concentrated in countries that are already struggling with high poverty rates, middle-income countries will also be significantly affected. The report estimates some 72 million of the projected “new poor” in the baseline scenario (and 94 million in the downside scenario) will be in middle-income countries — more than three-quarters of the total. Many of the “new poor” are likely to be engaged in informal services, construction, and manufacturing — the sectors in which economic activity is most affected by lockdowns, mobility restrictions and social distancing.

The report jointly evaluates three factors — the impact of COVID- 19 and the associated global economic recession, armed conflict and climate change. According to updated estimates in the report, COVID-19 is expected to push some 100 million people into extreme poverty during 2020 alone. Armed conflict is driving increases in poverty in some countries and regions. Furthermore, up to 132 million people may fall into poverty by 2030 due to the manifold effects of climate change. Due to the pandemic, millions of people, especially in the developing world, are reversing back into poverty. In 2020, the report projections suggest that 88-115 million people could fall back into extreme poverty, with an additional increase of 23-35 million in 2021.

What concerns is that the profile of the global poor is also “very young”. As per the report, in 2018, half of the poor were children younger than age 15, even though this age group accounted for only a quarter of the world’s population. Children and youth (15–24 yrs.) together account for two-thirds of the global poor. Women are overrepresented among the poor globally and also across most regions of the world. Girls are more likely than boys to be overrepresented among the poor. With the “new poor”, the profile of the global poor has split wide open with larger challenges to bring down global absolute poverty rate.

- S.R.Ranjan 

(Singh Rakesh Ranjan)

Freelance Journalist

(Representational images: source)