COVID-19 May Push 500m People into Poverty, Oxfam Warns

Oxfam has warned that the economic fallout from the COVID-19 pandemic could push 500 million people into poverty unless urgent action is taken to bail out developing countries.

He said the coronavirus fallout could set back the fight against poverty by a decade, and as much as 30 years in some regions such as the sub-Saharan Africa, Middle East and North Africa, adding that over half the global population could be living in poverty in the aftermath of the pandemic.

Oxfam disclosed this on Thursday in a new report titled: ‘Dignity Not Destitution’, where it presented fresh analysis which suggested that between six and eight per cent of the global population could be forced into poverty as governments shut down entire economies to manage the spread of the virus.

To this end, Oxfam called on world leaders to agree an ‘Economic Rescue Package for All’ to keep poor countries and poor communities afloat ahead of key meetings of the World Bank, International Monetary Fund (IMF) and G20 Finance Ministers next week.

Oxfam further revealed that the report was published by the United Nations University World Institute for Development Economics Research, and conducted by researchers at King’s College in London and the Australian National University.

The report said: “The devastating economic fallout of the pandemic is being felt across the globe. But for poor people in poor countries who are already struggling to survive, there are almost no safety nets to stop them falling into poverty.

“G20 Finance Ministers, the IMF and World Bank must give developing countries an immediate cash injection to help them bail out poor and vulnerable communities. They must cancel all developing country debt payments for 2020 and encourage other creditors to do the same, and issue at least US$1 trillion of Special Drawing Rights.

“Existing inequalities dictate the economic impact of this crisis. The poorest workers in rich and poor nations are less likely to be in formal employment, enjoy labour protections such as sick pay or be able to work from home. Globally, just one out of every five unemployed people has access to unemployment benefits. Two billion people work in the informal sector with no access to sick pay-the majority in poor countries where 90 percent of jobs are informal compared to just 18 percent in rich nations.

“Women are on the front line of the coronavirus response, and are likely to be hardest hit financially. Women make up 70 per cent of health workers globally and provide 75 percent of unpaid care, looking after children, the sick and the elderly. Women are also more likely to be employed in poorly paid precarious jobs that are most at risk.  More than one million Bangladeshi garment workers (80 per cent) of whom are women have already been laid off or sent home without pay after orders from western clothing brands were cancelled or suspended.”

The report stressed that many wealthy nations have introduced multi-billion-dollar economic stimulus packages to support business and workers, while most developing nations lack the financial firepower to follow suit.

The report, which was published  by the United Nations University World Institute for Development Economics Research, and conducted by researchers at King’s College London and the Australian National University,  estimated that nearly half of all jobs in Africa could be lost.

According to it, “Delivering the $2.5 trillion the UN estimated is needed to support developing countries through the pandemic would also require an additional $500 billion in overseas aid. " ”This includes $160 billion which Oxfam estimated is needed to boost poor countries’ public health systems and $2 billion for the UN humanitarian fund. Emergency solidarity taxes, such as a tax on extraordinary profits or the very wealthiest individuals, could mobilise additional resources.”

The report noted that governments must learn the lessons of the 2008 financial crisis where bailouts for banks and corporations were paid for by ordinary people as jobs were lost, wages flattened and essential services such as healthcare cut to the bone.