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By 2021, as many as 150 mn people likely to be in extreme poverty due to COVID-19: World Bank

The World Bank on Wednesday warned that by 2021, as many as 150 million people are likely to be in extreme poverty because of the coronavirus pandemic and countries will have to prepare for a “different economy” post-COVID by allowing capital, labour, skills and innovation to move into new businesses and sectors.

The COVID-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, depending on the severity of the economic contraction, according to the Washington-based global lender.

This would represent a regression to the rate of 9.2 per cent in 2017, according to the biennial Poverty and Shared Prosperity Report.

Had the pandemic not convulsed the globe, the poverty rate would have been expected to drop to 7.9 per cent in 2020, it said.

“The pandemic and global recession may cause over 1.4 per cent of the world’s population to fall into extreme poverty,” World Bank Group President David Malpass said.

“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, labour, skills and innovation to move into new businesses and sectors,” he said.

Noting that the new poor will be in countries that already have high poverty rates, the report said that a number of middle-income countries will see significant numbers of people slip below the extreme poverty line.

About 82 per cent of the total will be in middle-income countries, the report estimates.

The convergence of the COVID-19 pandemic with the pressures of conflict and climate change will put the goal of ending poverty by 2030 beyond reach without swift, significant and substantial policy action, the World Bank said, adding that by 2030, the global poverty rate could be about seven per cent.

In its report, the World Bank noted that the lack of recent data for India severely hinders the ability to monitor global poverty.

Absence of recent data on India, one of the economies with the largest population of extreme poor, creates substantial uncertainty around the current estimates of global poverty, the Bank said.