Half Billion More People Face Poverty Caused By The Coronavirus - Report

Half Billion More People Face Poverty Caused By The Coronavirus - Report

As a result of the economic impact of the coronavirus pandemic, about half a billion people could be forced into poverty unless wealthy countries take "urgent action" to help developing nations, a leading aid organization warned Thursday. 

Throughout the run-up to three key global economic meetings next week, Oxfam urged rich countries to step up their efforts to help the developing world. Failing to do so, it added, could hinder the fight against poverty in some regions, including Africa and the Middle East, by a decade and by as much as 30 years.

According to a research-based report at King's College London and the Australian National University, it warns that between 6% and 8% of the world's population could be forced into poverty as governments shut down entire sectors of their economic systems to maintain the virus spread. In an indication of the consequences of lockdowns in many Western countries, the study states that more than one million Bangladeshi workers — 80 per cent of whom are women — have been laid off or sent home without pay after orders have been cancelled.

“The devastating economic fallout of the pandemic is being felt across the globe," said Jose Maria Vera, Oxfam International Interim Executive Director.

Oxfam calls on world leaders to come to an agreement on an economic rescue plan to keep developing nations and vulnerable societies alive. Finance ministers from the Community of 20 major economies, including the International Monetary Fund and the World Bank, are expected to meet next week. 

Oxfam also suggests an increase in foreign funding of $500 million and the creation of $1 trillion of special drawing rights at the IMF, a step that significantly raises the resources available to developing countries in the critical months ahead. It would give the Ethiopian government access to an additional $630 million, according to the study, which would be sufficient to raise health expenditure by 45%.

Among the steps that Oxfam proposes is the immediate cancelation of the debt payments due in 2020 worth $1 trillion for developing countries. It said, for example, canceling Ghana's foreign debt payments this year would allow the government there to give a cash grant of $20 a month to each of the 16 million children, disabled people and elderly people in the country for a six-month period.

Image: People await Covid-19 screening and testing in Lenasia, South Africa. Photograph: Themba Hadebe/AP