World Bank warns 150 million people at risk of slipping into extreme poverty

The World Bank on Wednesday said that the level of global extreme poverty is anticipated to increase in 2020 for the first time in two decades as a result of the coronavirus pandemic, with 150 million people expected to be pushed into the extremely poor category by 2021.

The international financial assistance institution offered the new predictions in a press release on the findings of its biennial “Poverty and Shared Prosperity Report.” 

The study found that “extreme poverty,” which includes those living on less than $1.90 a day, is likely to impact between 9.1 and 9.4 percent of the world’s population in 2020, compared to a rate of 9.2 percent in 2017. 

The World Bank argued that if it were not for the impacts on COVID-19 on nations’ economies, the poverty rate would have likely dropped to 7.9 percent in 2020 based on previous downward trends. 

The report added that about 8 in 10 people classified as “new poor” will be in “middle-income countries,” including India, Nigeria and Indonesia. 

The World Bank also included that the type of poverty normally rooted in rural areas will soon be experienced by an increasing number of residents in urban communities. 

World Bank Group President David Malpass said in the press release that the 150 million anticipated to fall into extreme poverty as a result of the coronavirus global recession amounts to 1.4 percent of the world’s population.

Malpass added, “in order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-COVID, by allowing capital, labor, skills, and innovation to move into new businesses and sectors.”

The World Bank president said in the statement that the international group “will help developing countries resume growth and respond to the health, social, and economic impacts of COVID-19 as they work toward a sustainable and inclusive recovery.”

However, the report also noted that international progress in reducing poverty had slowed even before COVID-19 ravaged the globe. Global poverty dropped at the rate of about 1 percentage point per year between 1990 and 2015, shrinking to less than half a percentage point per year between 2015 and 2017. 

The report’s authors wrote that the study “offers no simple answers to these major challenges currently confronting the world, because there are not any.” 

“The impacts of COVID-19 remain especially fluid and may intensify,” the group added. “The report can, however, identify ways in which COVID-19 is distinctive in the effects it is likely to have on poor people.”