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 says.
It estimates the pandemic will push an additional 88-million to 115-million people into extreme poverty this year, with the total rising to as many as 150-million by 2021, depending on the severity of the economic contraction.
Poverty rate should have declined
Extreme poverty, defined as living on less than $1.90 a day, is likely to affect between 9.1% and 9.4% of the world’s population in 2020, according to the biennial Poverty and Shared Prosperity Report.
Had the pandemic not caused such a severe impact around the globe, the poverty rate was expected to drop to 7.9% in 2020.
“The pandemic and global recession may cause over 1.4% of the world’s population to fall into extreme poverty,” said World Bank Group President David Malpass.
New post-virus economies needed
“In order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-COVID by allowing capital, labour, skills, and innovation to move into new businesses and sectors.”
The report also finds that many of the new poor will be in countries that already have high poverty rates.
A number of middle-income countries will see significant numbers of people slip below the extreme poverty line. About 82% of the total will be in middle-income countries, the report estimates.
Substantial and swift policy action
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.
By 2030, the global poverty rate could be about 7%, it estimates.