The new COVID-19 pandemic can push some half a billion people across the globe into poverty, Oxfam says, as the contagious disease is raging around the world, taking more lives and wreaking havoc on economies.
In a report on Thursday, the Kenya-based charity organization assessed the fallout from the coronavirus spread on global poverty due to shrinking household incomes or consumption.
“The economic crisis that is rapidly unfolding is deeper than the 2008 global financial crisis. The estimates show that, regardless of the scenario, global poverty could increase for the first time since 1990,” the report found.
The report, which came out a few days ahead of the joint annual meeting of the International Monetary Fund (IMF) and the World Bank, added that such dramatic impact could plunge certain countries back to poverty last seen three decades ago.
The COVID-19 disease, caused by a new coronavirus, was first detected in the Chinese city of Wuhan late last year and is currently affecting 209 countries and territories across the globe. It has so far affected more than 1,537,500 people and killed over 89,950.
The World Health Organization (WHO) has declared the outbreak a global pandemic.
The authors of the Oxfam report developed several scenarios, taking into account the World Bank’s different poverty lines – from severe poverty, defined as living on $1.90 a day or less, to higher poverty lines of living on less than $5.50 a day.
Under the most serious scenario, which sees a 20 percent contraction in income, 431 million more people to nearly 1.2 billion across the world will plunge into extreme poverty. According to the same scenario, the number of people living below the $5.50 a day threshold will rise by 548 million people to nearly 4 billion.
Oxfam, a confederation of 19 independent charitable organizations focusing on the alleviation of global poverty, also predicted that women are at more risk than men, as they are more likely to work in the informal economy with little or no employment rights.
“Living day to day, the poorest people do not have the ability to take time off work, or to stockpile provisions,” the report further warned, noting that over two billion informal sector workers globally have no access to sick pay.
Last week, the World Bank warned that poverty in East Asia and the Pacific region alone could soar by 11 million people if conditions worsened.
To help alleviate the impact of COVID-19 pandemic, Oxfam proposed a six-pint action plan that would provide people and businesses in need with cash grants and bailouts. The plan also called for debt cancellation, more IMF support, and increased aid.
According to Oxfam plan, taxing wealth, extraordinary profits, and speculative financial products would also help increase the funds needed.
The report further said that governments across the globe would need to mobilize at least $2.5 trillion in total to help developing nations.
“Rich countries have shown that at this time of crisis they can mobilize trillions of dollars to support their own economies. Yet unless developing countries are also able to fight the health and economic impacts the crisis will continue and it will inflict even greater harm on all countries, rich and poor,” it added.