Introduction:

The coronavirus (COVID-19) is a crisis like no other the world has faced in recent decades in terms of its potential economic and social impacts. The world bank estimates that the pandemic could push about 49 million people into extreme poverty in 2020. It also reports that for the first time since 1998, global poverty rates are forecast to rise. According to the United Nations estimates, by the end of the year, 8% of the world’s population, a half-billion people, may be pushed into destitution largely because of the pandemic.

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Previous efforts across to globe to fight poverty:

• In 1990, 36% of the world’s population, or 1.9 billion people, lived on less than $1.90 a day. By 2016, that number had dropped to 734 million people, or 10% of the world’s population, largely because of progress in South Asia and China.
• Some of the biggest gains were made in India, where 210 million people were lifted out of poverty from 2006 to 2016, according to the U.N.
• Since 2000, Bangladesh brought 33 million people — 20% of its population — out of poverty while funding programs that provided education to girls, increased life expectancy and improved literacy.
• Famines that once plagued South Asia are now vanishingly rare, and the population is less susceptible to disease and starvation.

Impacts across globe:

• It is feared that this progress may be reversed, experts worry, and funding for anti-poverty programs may be cut as governments struggle with stagnant growth rates or economic contractions as the world heads for a recession.
• While everyone will suffer, the developing world will be hardest hit.
• The World Bank estimates that sub-Saharan Africa will see its first recession in 25 years, with nearly half of all jobs lost across the continent. South Asia will most likely experience its worst economic performance in 40 years.
• Most at risk are people working in the informal sector, which employs 2 billion people who have no access to benefits like unemployment assistance or health care.
• In Bangladesh, 1 million garment workers — 7% of the country’s workforce, many of them informally employed — lost their jobs because of the lockdown.
• Countries like India, Bangladesh, which spent heavily on programs to improve education and provide health care, may no longer be able to fund them.
• There will be groups of people who climbed up the ladder and will now fall back into vicious cycle of poverty.
• In India, millions of migrant laborers were left unemployed and homeless overnight after the government there announced a lockdown. In parts of Africa, millions may go hungry after losing their jobs and as lockdowns snarl food aid distribution networks.
• In Mexico and the Philippines, remittances that families relied on have dried up as primary breadwinners lose their jobs and can no longer send money home.
• A resolution that committed the U.N. to eliminating poverty and hunger and providing access to education for all by 2030 may now be a pipe dream.

Measures needed: Policies needed to mitigate poverty and distributional impacts will have to respond to each country’s context and circumstances. Having said that, the numbers above suggest that across affected countries:

• Multilateral global institutions must support the developing nations:
  • Oxfam is calling on world leaders to agree on an Emergency Rescue Package of 2.5 trillion USD paid for through the immediate cancellation or postponement of 1 trillion in debt repayments, a 1 trillion increase in IMF Special Drawing Rights (international financial reserves), and an additional 500 billion in aid.
• An effective response in support of poor and vulnerable households will require significant additional fiscal resources.
  • Providing all the existing and new extreme poor with a cash transfer of $1/day (about half the value of the international extreme poverty line) for a month would amount to $20 billion —or $665 million per day over 30 days.
  • Given that impacts are likely to be felt by many non-poor households as well and that many households are likely to need support for much longer than a month, the sum needed for effective protection could be far higher.
• Any support package will need to quickly reach both the existing and new poor.
  • While existing safety net programs can be mobilized to get cash into the pockets of some of the existing poor relatively quickly, this is not the case for the new poor.
  • In fact, the new poor are likely to look different from the existing poor, particularly in their location (mostly urban) and employment (mostly informal services, construction, and manufacturing).
• Decision-makers need timely and policy-relevant information on impacts and the effectiveness of policy responses.
  • This can be done using existing, publicly available data to monitor the unfolding economic and social impacts of the crisis, including prices, service delivery, and economic activity, as well as social sentiment and behaviors.
  • In addition, governments can use mobile technology to safely gather information from a representative sample of households or individuals.
  • Phone surveys can collect information on health and employment status, food security, coping strategies, access to basic services and safety nets and other outcomes closely related to the risk of falling (further) into poverty.

Conclusion:

This pandemic is as much a social and economic crisis as it is a humanitarian one. Considering the uncertain path that lies ahead, helping the country’s poor become self-sufficient and better prepared can prove to be the best weapon against the deadly virus, and such a DBT can go a long way in that.