THE ECONOMIC crisis caused by coronavirus could push over half a billion people into poverty unless urgent and dramatic action is taken, new analysis warns.
The research in new report ‘Dignity Not Destitution‘, which was conducted at Oxfam’s suggestion by researchers at King’s College London and the Australian National University, suggests 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.
Jose Maria Vera, Oxfam International Interim Executive Director, commented on the findings: “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.
“Many wealthy nations have introduced multi-billion-dollar economic stimulus packages to support business and workers, but most developing nations lack the financial firepower to follow suit.
“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 flatlined and essential services such as healthcare cut to the bone.
“Economic stimulus packages must support ordinary workers and small businesses, and bail outs for big corporations must be conditional on action to build fairer, more sustainable economies.”
The coronavirus pandemic could set back the fight against poverty by a decade, and as much as 30 years in some regions such as sub-Saharan Africa and the Middle East and North Africa.
The International Labour Organization (ILO) estimates that 25 million jobs could be lost, but that is likely to be ‘a significant underestimate.’
Curfews and lockdowns are causing untold economic hardship, and workers are projected to lose as much as $3.4 trillion in income.
In countries like Kenya and Cambodia, tens of thousands of factory and farm workers are being told to go home.
Women workers will be among the hardest hit, as they are more likely to be engaged in informal and precarious work.
The International Monetary Fund (IMF) has already said that the world is heading for a recession bigger than that caused by the global financial crisis in 2008.
The report states that immediate action must be taken by the G20 and other government leaders, which would go a very long way to mitigating the economic impacts and providing direct assistance to ordinary people hit hard by this crisis.
It also suggests governments worldwide must mobilise at least $2.5 trillion to support developing countries to stop the pandemic and prevent global economic collapse.
This must be done in ways that ‘underpin a new social contract between people, governments and the market and that radically reduce inequality and lay the foundations for a more human economy.’
The report concludes that choices being made now ‘can lay the foundations for a more equal, feminist and sustainable world, or they can accelerate inequality and environmental destruction.’