The Financial Express

Pandemic could push 60m into ultra poverty globally

WB estimates, warns of collapsing growth

| Updated: June 09, 2020 12:02:54

File photo used for representational purpose File photo used for representational purpose

The World Bank has warned that as many as 60 million people worldwide could be pushed into extreme poverty due to the impact of the deadly coronavirus.

"Our estimate is that up to 60 million people will be pushed into extreme poverty - that erases all the progress made in poverty alleviation in the past three years," bank president David Malpass said on Tuesday (Washington time).

The people, who live on less than US$1.90 (Tk 161.5) a day, are defined as extreme poor.

He issued the warning after announcing the lender's emergency operations to fight COVID-19 for the 100 developing nations, home to 70 per cent of the world's population, the bank said in a statement.

The bank chief said the global economic growth could also be shrunk by 5.0 per cent this year as almost all the countries in the world are struggling with the pandemic.

The Washington-based lender has announced a US$160 billion worth of grants and low-interest loans, to be disbursed in 15 months, to help poor countries tackle the COVID-19 crisis.

Mr Malpass said, "Millions of livelihoods have been destroyed and healthcare systems are under strain worldwide."

The COVID-19 pandemic has already caused a million of jobs cut across the globe and severe businesses fallout, with poorer countries feeling the brunt.

Mr Malpass said, "The World Bank Group has moved quickly and decisively to establish emergency response operations in 100 countries, with mechanisms that allow other donors to rapidly expand the programmes."

"To return to growth, our goal must be rapid, flexible responses to tackle the health emergency, provide cash and other expandable support to protect the poor, maintain the private sector, and strengthen economic resilience and recovery," he said.

The WB Group's other windows including-- the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA)--have also fast-tracked support to businesses in developing countries, including trade finance and working capital to maintain private sectors, jobs and livelihoods.

The bank's support through grants, loans and equity investments will be supplemented by the suspension of bilateral debt service, as endorsed by its governors.

IDA-eligible countries that request forbearance on their official bilateral debt payments will have more financial resources to respond to the COVID-19 pandemic and fund critical, lifesaving emergency responses.

"The bilateral debt-service suspension being offered will free up crucial resources for IDA countries to fund emergency responses to COVID-19," said Mr Malpass.

The president suggested the nations should move quickly to substantially increase the transparency of all their governments' financial commitments.

This will increase the confidence in the investment climate and encourage more beneficial debt and investment in the future, he noted.

The bank's operational response will strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest.

Country operations will deliver help to the poorest families through cash transfers and job support; maintain food security, nutrition and continuity of essential services such as clean water and education; target the most vulnerable groups, including women and forcibly displaced communities, who are most likely to be hit hard; and engage communities to support vulnerable households and foster social cohesion, the Washington-based lender said.

The scale and speed of the response is critical in helping countries mitigate the adverse impacts of this crisis and prioritise the human capital investments that can accelerate recovery, it added.

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