The report warned that the economic crisis would be “deeper than the 2008 global financial crisis."
As the coronavirus pandemic wreaks havoc across the world, with over 1.5 million reported cases and over 95,000 deaths, the international organization Oxfam warned Thursday that the economic fallout could push around half a billion people into poverty.
“The estimates show that, regardless of the scenario, global poverty could increase for the first time since 1990,” a recent report said, adding that this could throw some countries back to poverty levels last seen some three decades ago.
The report warned that the economic crisis would be “deeper than the 2008 global financial crisis,” calculating the impact of the crisis on global poverty due to shrinking household incomes or consumption.
“Living day to day, the poorest people do not have the ability to take time off work, or to stockpile provisions,” it says, adding that more than two billion informal sector workers worldwide had no access to sick pay.
For the NGO, the worst-case serious scenario would be a 20 percent contraction in income, resulting in a rise of 434 million in the number of people living in extreme poverty to nearly 1.2 billion worldwide. The same scenario would see the number of people living below the US$5.50 a day threshold rise by 548 million people to nearly four billion.
To help mitigate the impact, Oxfam proposed a six-point action plan that would deliver cash grants and bailouts to people and businesses in need and also called for debt cancellation, more IMF support, and increased aid. Taxing wealth, extraordinary profits, and speculative financial products would help raise the funds needed, Oxfam added.
In a similar manner, by mid-March, the executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC) Alicia Barcena said that COVID-19 would directly impact the already weakened Latin American economy, as poverty could increase for 35 million people.