How has the coronavirus pandemic affected global poverty?

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How has the coronavirus pandemic affected global poverty?

Siobhán O’Grady
July 3, 2020 at 8:00 a.m. EDT

The novel coronavirus pandemic has wreaked havoc on the global economy, upending entire industries and leaving scores of people around the world without work, child care and — in many places — enough food on their tables.

The economic upheaval has exposed and intensified deep-seated inequity, thrusting many of the world’s most vulnerable people into more precarious situations and pushing others into poverty. More than 10 million cases of the virus have been confirmed globally, but even in places where the official case count remains low, the ripple effects of the economic crisis have left many families on shaky financial footing.

Previous economic crises have taken devastating tolls. During the global financial crisis of 2007-2008, poverty increased in some countries and the rate of poverty reduction slowed in others. Countries suffered persistent losses in output. And researchers documented close associations between spikes in unemployment and excess mortality.

The pandemic is an external factor, not directly comparable to the problems within financial markets that led to the Great Recession. But regardless of cause, economic downturns affect human health and well-being, all the more so when a public health crisis is the cause of the downturn in the first place.

Here’s what we know about how international economic turmoil is playing out and what may come next.

What do economic forecasts tell us?

In April, the International Monetary Fund projected that the global economy would experience a 3 percent downturn in 2020, its sharpest contraction since the Great Depression. Last week, the IMF revised those forecasts, saying that the global recession will be far worse than originally thought. New projections suggest output will drop by 4.9 percent.

Justin Sandefur, senior fellow at the Center for Global Development, told The Washington Post that the projections can only tell part of the story.

“We are still mostly relying on forecasts of what’s happening, not actual numbers,” he said.

Some new data is trickling in via phone surveys, which allow interviewers to ask questions about how individual households are coping and can offer a better sense of how the economic crisis is playing out on the ground.

So far, evidence in some places suggests the impact has been “really severe,” Sandefur said. “But we don’t yet have a systematic picture of that. It’s still sort of just a collage of small pieces.”

It may take several years, he said, to gain a full understanding.

How is the economic turmoil affecting global hunger?

The World Food Program announced Monday that it will dramatically escalate its food assistance to serve up to 138 million people this year as more people go hungry due to lockdowns and job losses during the pandemic. That marks the highest number of people that WFP, the United Nations’ hunger relief arm, has ever served in a single year since its inception in 1961.

“It’s making the poorest poorer and the hungriest hungrier,” Steve Taravella, senior spokesman at WFP, said of the pandemic. “A lot of what we’re talking about really is the impact of the socioeconomic fallout from the virus more than the health impact.”

Hunger could be more deadly than coronavirus in poorer countries

For people facing food insecurity, the choice to stay home without money or food may feel more dangerous than the risk of the virus. David Beasley, WFP’s executive director, said in April that the world “could be facing multiple famines of biblical proportions within a short few months.”

Countries that were already facing food insecurity before the pandemic began are particularly at risk for being pushed over the brink.

WFP has not yet seen evidence that famine is happening, Taravella said this week, but he added that the organization fears “that if we don’t receive the resources to help meet this dramatic need very quickly, we could see famine in multiple countries.”

How does economic instability affect women and girls?

Experts have warned that globally, women and girls often bear the brunt of economic downturns, which can impact schooling, health and career opportunities.

By late March, more than 1.5 billion children had their schooling disrupted due to the pandemic, and a report in April from the Malala Fund projected that the pandemic will terminate or seriously delay secondary schooling for 10 million girls. Case studies from the 2014-2016 Ebola epidemic in West Africa found that during that deadly outbreak, large numbers of girls quit school and never returned.

When countries started to lock shut down, women’s health organizations warned that restrictions on movement could limit women’s ability to access lifesaving medical care and contraceptives, which could affect their ability to plan their families and control their finances. Some groups estimated that millions of women would experience unplanned pregnancy due to the effects of the shutdown.

Nahla Valji, who serves as senior gender adviser to António Guterres, the U.N. secretary general, told the New York Times in May that past crises show that although economic upheaval can affect anyone, it is women who are less likely to bounce back from fiscal damage wrought during a crisis. Globally, women perform most of the world’s unpaid labor. And when women and girls are forced out of school early or experience unplanned pregnancy, it can have long-term effects on their finances.

Globally, “women earn less, they save less, they’re more likely to be in precarious jobs with little security or protections if they do work, or in the informal sector, with no protections at all,” Valji told the Times. “And that means that they have less buffer to economic shocks, such as the ones we are experiencing.”

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How do travel restrictions and lockdowns affect the global economy?

In March, as the coronavirus spread, airlines started cutting flights and furloughing staff. Some shut down entirely. Border restrictions put in place to keep people from spreading the virus meant even travel between many neighboring countries became impossible.

Now, experts are trying to measure the full impact tourism losses will have on the global economy.

On Wednesday, the U.N. Conference on Trade and Development (UNCTD) warned that the global tourism industry is on track to lose at least $1.2 trillion due to pandemic-related disruptions. If travel continues to be affected for an entire year, the losses could reach $3.3 trillion.

Millions of jobs rely on tourism, which connects to sectors including food and entertainment. UNCTD warned that because so many women work within the tourism industry, many in informal jobs, as well as in service jobs tied to related industries, they are at particular risk of losing work due to the impact of shutdowns.

Countries that rely on tourism for crucial income are at serious risk of fiscal trouble. Jamaica, for example, looks set to lose 11 percent of its gross domestic product from losses in the tourism industry, even in the best-case scenario, UNCTD said in its report. Thailand would lose 9 percent.

“The global contraction in tourism arrivals could have devastating economic consequences as some developing countries are highly dependent on tourism,” the report said. “In some countries, such as several small island developing states, tourism accounts for more than half of the GDP.”

The jobs will affect workers in formal and informal sectors, and the lost wages could push workers who previously enjoyed steady work into dangerous financial uncertainty.

Lockdowns can also take a disproportionate toll on the most vulnerable. Strict shutdowns “carry a much higher human price in the developing world,” where the absence of social safety nets can make survival without work nearly impossible, economist Julian C. Jamison said in an essay published by The Washington Post.

About Bruce

Work for sustainable development of small islands and the Chesapeake Bay; ex-Peace Corps (Volunteer and staff) in LA & Caribbean; cruised Caribbean on S/Y Meander for three years; like small tropical islands, French canals, Umbria, Tasmania, and NZ. Married 52 years to the late Kincey Burdett Potter (see President of the now-sunsetting Island Resources Foundation.
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