The number of people living in extreme poverty is set to increase by 120 million people to over 800 million people as a result of the effects of the COVID-19 pandemic.
Currently 689 million people live in extreme poverty, surviving on less than US$1.90 a day. Children and other young people account for two-thirds of the world’s poor.
And has always been the case, women and girls represent the majority of people living in extreme poverty in most regions, with this being particularly the case in Africa south of the Sahara.
While some view poverty as an African thing, and the latest statistics serve to reinforce this perception, those who have been complacent about this matter world must be worried by the fact many of the people who have fallen into poverty since the onset of COVID-19 are from countries that the World Bank classifies as “middle-income”.
This means that while poverty is deepening in the areas it has traditionally been associated with, it is also emerging and re-emerging in countries that thought they were well on their way to eradicating it.
In an op-ed published on July 7, 2021, United Nations Secretary-General Dr António Guterres called for increased solidarity with developing countries to combat growing poverty and to close the gap between rich and poor globally.
“The pandemic is set to increase the number of extremely poor people by some 120 million around the world; more than three-quarters of these ‘new poor’ are in middle-income countries,” he said.
These countries need a helping hand to avoid financial catastrophe, and to invest in a strong recovery.
The International Monetary Fund has stepped in to allocate US$650 billion in Special Drawing Rights, an instrument viewed by many development economists as the least stressful way to increase the funds available to cash-strapped economies without sinking them deeper into debt.
It has been suggested that developed countries, notwithstanding their own domestic priorities, should channel their unused share of these SDRs to low and middle-income countries.
The UN Secretary-General has emphasised that the global solidarity that has been preached for decades within the context of the Millennium Development Goals and the subsequent Sustainable Development Goals, among other structures, should now be turned into action.
According to Dr Guterres, the real test of international solidarity on matters of poverty and development, will only be seen in the provision of extending an economic lifeline to the developing world and on issues such as climate.
The increasing poverty being seen around the world is being most acutely felt in contemporary times within the context of access to COVID-19 vaccines.
Rich countries have been accused of hoarding vaccines at the expense of developing nations, which had placed their hopes in the COVAX facility but have seen that Western-led approach to vaccination failing to deliver on its promises.
Dr Guterres said, “We are in a race between vaccines and variants; if the variants win, the pandemic could kill millions more people and delay a global recovery for years.
“But while 70 percent of people in some developed countries are vaccinated, that figure stands at less than one per cent for low-income countries. Solidarity means delivering on access to vaccines for everyone – fast. Pledges of doses and funds are welcome. But let’s get real. We need not one billion, but at least eleven billion doses to vaccinate 70 percent of the world and end this pandemic.”
Some estimates show that rich countries have been able to commit as much as 28 percent of their GDP into weathering the impact of the COVID-19 crisis.
In middle-income countries, this figure drops to 6,5 percent of GDP; and in the least developed countries, the number plummets to less than two percent.
This shows the extent of the chasm dividing the haves and the have-nots.
The head of the United Nations said many developing countries now face crippling debt service costs, at a time when their domestic budgets are stretched and their ability to raise taxes is reduced.
There have been efforts to address this, including the Debt Service Suspension Initiative and Common Framework for Debt Treatment by the G20.
Dr Guterres has welcomed these initiatives, and added: “But they are not sufficient. Debt relief must be extended to all middle-income countries that need it. And private lenders must also be brought into the equation.”
In addition, the US$650 billion SDR allocation by the IMF is being welcomed by countries across the world.
But the problems remains the allocation formula, which strangely sets aside more money for rich countries than developing ones.
With poverty caused by COVID-19 set to remain a challenge for years to come, there really is a need for genuine international solidarity to confront the greatest challenge to humanity in living memory.