The World Bank on Wednesday said in a report that as many as 150 million people may face extreme poverty due to situations related to COVID-19 by 2021, PTI reported. It also advised countries to prepare for a “different economy” post-pandemic and allow movement of capital, labour, skills and innovation into new businesses and sectors.
“The pandemic and global recession may cause over 1.4% of the world’s population to fall into extreme poverty,” World Bank Group President David Malpass said.
“In order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-COVID, by allowing capital, labour, skills and innovation to move into new businesses and sectors,” he said.
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The report also states that if there was no pandemic, poverty rates would have been expected to drop by 7.9% in 2020. However, given the present scenario, an additional 88 million to 115 million people will fall into extreme poverty, thereby pushing the total to 150 million. This will depend on the severity of the economic contraction, according to the Washington-based global lender.
This would represent a regression to the rate of 9.2% in 2017, according to the biennial Poverty and Shared Prosperity Report.
Noting that the new poor will be in countries that already have high poverty rates, the report said that a number of middle-income countries will see significant numbers of people slip below the extreme poverty line.
About 82% of the total will be in middle-income countries, the report estimates.
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The convergence of the COVID-19 pandemic with the pressures of conflict and climate change will put the goal of ending poverty by 2030 beyond reach without swift, significant and substantial policy action, the World Bank said, adding that by 2030, the global poverty rate could be about 7%.