Poverty and Shared Prosperity Report
Recently, a report titled as “Poverty and Shared Prosperity Report” released that Sub-Saharan Africa, with 27-40 million new poor, and South Asia, with 49-57 million, will be badly hit. It is a biennial report released by the World Bank.
• The Poverty and Shared Prosperity series provides a global audience with the latest and most accurate estimates on trends in global poverty and shared prosperity. For more than two decades, extreme poverty was steadily declining. Now, for the first time in a generation, the quest to end poverty has suffered its worst setback.
• The report presents new estimates of COVID-19’s impacts on global poverty and inequality.
• Harnessing fresh data from frontline surveys and economic simulations, it shows that pandemic-related job losses and deprivation worldwide are hitting already-poor and vulnerable people hard, while also partly changing the profile of global poverty by creating millions of “new poor.”
About the Report
The pandemic may push another 88 million to 115 million into extreme poverty or having to live on less than $1.50 per day, resulting in a total of 150 million such individuals.
Some 9.1% to 9.4% of the world will be affected by extreme poverty in 2020, the report said, compared to 7.9% in the counterfactual scenario where the pandemic had not raged across the world.
The pandemic and global recession may cause over 1.4% of the world’s population to fall into extreme poverty.
Many of the newly poor individuals will be from countries that already have high poverty rates while many in middle income countries (MICs) will slip below the poverty line, as per the report. Some 82% of the total will be in MICs.
New Poor: Many of the new poor will be in countries that already have high poverty rates. 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.
Increasing numbers of urban dwellers are expected to fall into extreme poverty, which has traditionally affected people in rural areas.
Progress was slowing even before the COVID-19 crisis. New global poverty data for 2017 show that 52 million people rose out of poverty between 2015 and 2017.
Yet despite this progress, the rate of reduction slowed to less than half a percentage point per year between 2015 and 2017.
Global poverty had dropped at the rate of around 1 percentage point per year between 1990 and 2015.
The COVID-19 crisis has also diminished shared prosperity – defined as the growth in the income of the poorest 40 percent of a country’s population.
Average global shared prosperity is estimated to stagnate or even contract over 2019-2021 due to the reduced growth in average incomes.
The deceleration in economic activity intensified by the pandemic is likely to hit the poorest people especially hard, and this could lead to even lower shared prosperity indicators in coming years.
What need to be done?
The Poverty and Shared Prosperity 2020 report provides recommendations for a complementary two-track approach: responding effectively to the urgent crisis in the short run while continuing to focus on foundational development problems, including conflict and climate change.
o Closing the gaps between policy aspiration and attainment
o Enhancing learning, improving data
o Investing in preparedness and prevention
o Expanding cooperation and coordination
o Finally, effective responses must begin by recognizing what makes these challenges not just different and difficult, but so consequential for the poor.
But reversing even a massive reversal of fortune, such as we are seeing with COVID-19, is necessary and possible. It has been done in the past, in the face of what were regarded at the time as insurmountable challenges – eradicating smallpox, ending World War II, closing the ozone hole – and it will be done again in the future.
The world must commit urgently to working together, and to working better – now especially, and for the long term.