Gearing up for tough times
It has been almost a year now and the Covid-19 pandemic has been taking a heavy toll especially on our economies. World over the situation is grim and various researches and reports are suggesting tough days ahead for the common man.
Though various governments have been initiating some measures to control and check recession and loss of jobs, the solutions seem not to be working so far. Most of the companies in India and elsewhere have stopped recruiting people and the unemployment rates have surged quite high during the past six months now.
Reports and analysis by renowned economists and market specialists indicate that the world and south Asian region in particular will be the hardest hit. The latest projections show that the global poverty could rise to over one billion people due to the pandemic and more than half of the 395 million additional extreme poor would be located in South Asia.
Researchers from King’s College London and Australian National University published the new paper with the United Nations University World Institute for Development Economics Research (UNU-WIDER) said that poverty is likely to increase dramatically in middle-income developing countries and there could be a significant change in the distribution of global poverty.
This in simple terms means that the location of global poverty could shift back towards developing countries in South Asia and East Asia. Besides, the cost of the crisis in lost income could reach USD 500 million per day for the world’s poorest people, and the intensity and severity of poverty are likely to be exacerbated dramatically.
Given the trend, the value of the poverty line will increases and a larger share of the additional poor will be concentrated in regions where the corresponding poverty line is more relevant given the average income level.
The countries which have vast number of people who have suffered loss of job and will witness reduced number of working days in the coming months will witness a huge surge in poverty indexes raising to alarming levels.
Over the past few years some of the countries had made good progress in reducing the number of poor in their countries but the Covid pandemic has surely rubbed off their achievements.
Two countries, Ethiopia and India had managed to achieve a sustained reduction in their incidence of poverty since the early 1990s, by reaching their lowest poverty headcount ratio ever recorded at about 22 and 13 per cent, respectively.
But the contraction in per capita income and consumption imposed by the pandemic’s economic effects could erase huge portions of progress that was otherwise achieved during the past several years.
The world is moving towards a situation where the big powers have to come forward and take some responsibility. The global leadership from the G7, G20, and the multilateral system need to propose plans to address the impact of the COVID-19 on global poverty quickly.