Global poverty will rise again to 1 billion people amid the COVID-19 pandemic, AP reported.
A study of King's College London and The Australian National University shows a sharp increase in poverty in middle-income developing countries, where millions of people live just above the poverty line.
Asian countries such as Bangladesh, India, Indonesia, Pakistan, and the Philippines are considered particularly vulnerable to economic pandemic shocks.
“The pandemic is fast becoming an economic crisis for developing countries,” said Andy Sumner, a professor of international development at King’s College London and one of the report’s co-authors.
According to the worst-case scenario, the number of people living in extreme poverty will increase from 700 million to 1.1 billion.
“Without action this crisis could set back progress on reducing global poverty by 20 or even 30 years,” Sumner said.
Researchers call for “urgent global leadership” to overcome the crisis. But the hopes are low after the Group of Seven meeting of world leaders, which was supposed to take place on June 10-12, was postponed. US President Donald Trump plans to hold an expanded meeting in September, which will also bring together leaders from Russia, Australia, South Korea, and India.
Sumner said three steps should be prioritized. First, it is necessary to create a “rapid response global commission on poverty and COVID-19” under the guidance of a well-known world leader to determine the level of funding required.
Secondly, funds should be quickly released by expanding the current debt servicing environment that the International Monetary Fund provides to all developing countries and freezing World Bank debt repayments at least until the end of 2020, possibly until 2021. When the crisis subsides, debt restructuring or outright cancellation of debt for some developing countries “will be needed or even unavoidable.”
And thirdly, countries that benefit from the standstill should use this money to strengthen and expand social safety nets.