Global Poverty Under Covid-19

Set by the World Bank, the international poverty line is currently at 1.90$ a day. Based on the cost of sustaining one adult, it sets a threshold for people living in extreme poverty. For the past 25 years, the number of people living below this line has consistently been decreasing. However, forecasts suggest poverty will be exacerbated by the effects of Covid-19.

In 1990, there were 1.9 billion people living in extreme poverty. By 2017, the number was at 689 million. Valensisi, G. (2020) conducted a preliminary study on the issue based on IMF forecasts of GDP growth. According to the author, throughout 2020, the number of people living under 1.90$ a day can increase between 68 and 100 million, depending on the severity of a forthcoming recession. Additionally, Sumner, A., Hoy, C., & Ortiz-Juarez, E. (2020) estimated that an increase in poverty will mainly occur in Sub-Saharan Africa and South Asia.

It is hard to assess the full impact caused by Covid-19 alone, as authors believe climate change and conflict also amplify poverty risk, whether through higher food prices or exposure to natural disasters. The question is: will the pandemic setback efforts to end poverty around the world, as proposed by the United Nations 2030 Agenda for Sustainable Development?

Sources:

• Djankov, S., & Panizza, U. (2020). COVID-19 in developing economies. Centre for Economic Policy Research.
• Valensisi, G. (2020). COVID-19 and global poverty: Are LDCs being left behind?. The European Journal of Development Research, 1-23.
• Sumner, A., Hoy, C., & Ortiz-Juarez, E. (2020). Estimates of the Impact of COVID-19 on Global Poverty. UNU-WIDER, April, 800-9.
• https://www.worldbank.org/en/news/feature/2020/10/07/global-action-urgently-needed-to-halt-historic-threats-to-poverty-reduction

Isabel Caldeira

NEC Member
Student of the Master’s Degree in Economics
Nova School of Business and Economcis