77 Million More People Face Extreme Poverty Due to COVID-19 Challenges
Extreme poverty affected 889 million people worldwide by the end of 2021, according to the United Nations (UN). This is a substantial hike from the 2019 level of 812 million people, with the 77-million-person change driven largely by the effects of the COVID-19 pandemic.
The UN warned that this rate is likely to climb even higher once the toll of the war in Ukraine is added. UN analysis indicated that “1.7 billion people are faced with exposure to spiking food, energy, and fertilizer costs as a result of the war in Ukraine,” said UN Deputy Secretary-General Amina Mohammed at a news conference.
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People living in extreme poverty subsist on $1.90 a day or less, but poverty extends further than income.
“Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination, and exclusion, as well as the lack of participation in decision making,” according to the UN.
Education in particular took a hit during the pandemic. In 2021, 70 percent of 10-year-olds in developing countries were unable to read a basic text—a 17 percent increase from 2019.
Poverty and hunger also have lasting impacts on security. Food-related crises, hunger, and climate change have been shown to trigger or exacerbate conflicts, and the war in Ukraine could result in rations being cut in at-risk regions and conflict zones worldwide.
The world had been making progress on the extreme poverty front, with the share of the world’s workers living in extreme poverty falling from 14.3 percent in 2010 to 3.1 percent in 2019, but the COVID-19 pandemic pushed back on that improvement. The UN estimated that one in five developing countries’ GDP per capita would not return to 2019 levels by the end of 2023.
“The developed world proved in the last two years that millions can be lifted out of poverty by the right kind of investment—in resilient and clean infrastructure, social protection, or public services,” said UN Under Secretary-General Liu Zhenmin, head of the Department of Economic and Social Affairs, in a UN press release. “The international community must build on that progress, and ensure developing countries can invest at similar levels, while reducing inequality and securing a sustainable energy transition.”
The average income of the bottom 40% of people dropped 6.7% over the course of the pandemic ↘️ …— UN DESA (@UNDESA) April 12, 2022
Meanwhile, the wealth of the world’s 10 richest men doubled ⤴️⤴️#Fin4Dev can help address inequality. Find out how here: https://t.co/zrl92Za4HE #BridgingFinanceDivide
The UN report, 2022 Financing for Sustainable Development Report: Bridging the Finance Divide, noted that many developing countries cannot recover from the pandemic because of the crippling cost of debt repayments. The poorest developing countries pay an average of 14 percent of their revenue for interest on debts, and are cutting budgets for education, infrastructure, and capital spending to cover the costs, The Washington Post reported. In comparison, developed countries were paying just 3.5 percent of revenue on debt interest.
The report warns that rich donor nations are likely to focus spending on responding to the war in Ukraine, cutting aid to developing countries, which could exacerbate the problem further.
Ukraine itself faces significant increases in poverty inside its borders as well. In 2021, 18 percent of Ukrainians lived in poverty; by the end of 2022, that could have increased to 70 percent, the World Bank said. If a “massive” post-war support package is not developed, it is likely that more than 60 percent of Ukrainians will still have an income below the national poverty line by 2025.
Humanitarian organizations are bracing for funding gaps in the face of both the war in Ukraine and the global poverty shift. UNICEF faces a $59 million funding gap, especially as nearly two-thirds of all Ukrainian children have been displaced because of the conflict and they and their families need food and support.
More than 250m people could be pushed into extreme poverty in 2022 – Oxfam https://t.co/mSY9tgAzkZ— The Guardian (@guardian) April 12, 2022
In addition to poverty within Ukraine itself, the war could have significant implications for global poverty. The rising price of food caused by Russia’s invasion of Ukraine and increased energy costs could push a quarter of a billion more people into extreme poverty, according to Oxfam’s report First Crisis, Then Catastrophe. This could be mirrored in global hunger: the number of undernourished people could reach 827 million in 2022, the charity estimated.
“A wave of governments is nearing a debt default and being forced to slash public spending to pay creditors and import food and fuel,” the brief explained. “The world’s poorest countries are due to pay $43 billion in debt repayments in 2022, which would otherwise cover the costs of their food imports. Global food prices hit an all-time high in February, surpassing the peak crisis of 2011.”
Those rising food and fuel prices mean consumers are being forced to choose between buying food, heating their homes, or paying medical bills. In wealthy countries, rising food costs account for 17 percent of consumer spending, but in Sub-Saharan Africa, consumers must spend as much as 40 percent of their funds on food in light of the new price increases.
Oxfam estimated that rising food prices alone will push 65 million more people into extreme poverty this year.
The UN was already “off track” in its efforts to hit development goals before the COVID-19 pandemic and the war in Ukraine hit, and now the agency is requesting more resources overall. The report recommended hastening debt relief and expanding eligibility to middle-income nations that find themselves facing heavy debts due to pandemic-related borrowing.