Half a billion people could be plunged into poverty as economies around the world shrink due to the coronavirus epidemic, a new study has warned.
The level of poverty in developing countries could decline by up to 30 years, research published Thursday by the World Research Institute for Development Economics at the United Nations University.
“The impact will be quite devastating,” said co-author Andy Sumner, professor of international development at King’s College London, who warned of a “poverty tsunami.”
“Covid could lead to a very large increase in global poverty, in fact, it could send the world back 10 years and could send back some areas of 30 years,” said Sumner.
Researchers used World Bank data to measure the effects of reducing the amount of money spent in economies with three levels of poverty – $ 1.90 (£ 1.53), $ 3.20 and 5, $ 50 per day.
The results showed that even if consumption fell by 5% – the smallest impact they had modeled – it would lead to the first increase in income-related poverty since 1990.
With international financial leaders meeting next week, the research has sparked calls for swift action to protect vulnerable populations who will not be able to escape strict quarantine measures like those implemented in Europe.
Oxfam called on world leaders to agree on a $ 2.5 billion economic rescue package to “keep poor countries and poor communities afloat.”
Sumner said urgent action is needed to create a safety net system that would mitigate the immediate blow to loss of income, as well as policies to ensure people are not left in poverty in the long term .