COVID-19 Will Worsen Poverty in 47 Poorest Nations Says UN

World | December 4, 2020, Friday // 09:12
Bulgaria: COVID-19 Will Worsen Poverty in 47 Poorest Nations Says UN

The pandemic could push as many as 32 million people in the world's least developed countries into extreme poverty, a new UN report has said. Without international action, global development goals will be missed.

The world's least developed countries (LDCs) will experience their worst economic performance in 30 years in 2020 due to the pandemic, the United Nations Conference on Trade and Development (UNCTAD) said in a report released Thursday.

 

In its Least Developed Countries Report 2020, the intergovernmental body, which seeks to help developing economies navigate a globalized economy, predicted that falling income levels, widespread unemployment and growing fiscal deficits caused by the pandemic could push as many as 32 million people into extreme poverty in the 47 countries designated as "least developed."

 

While the initial health impact of the coronavirus has been less severe in these countries than many feared, the economic impact has been devastating, the report said. Economic growth forecasts for these countries were revised down from 5% to -0.4% between October 2019 and October 2020, which is expected to lead to an overall drop in per capita income of 2.6% in 2020.

 

"The least developed countries today are undergoing the worst recession in 30 years," UNCTAD Secretary-General Mukhisa Kituyi wrote in a foreword to the report. "Their already low standards of living are falling. Their stubbornly high poverty rates are rising further, reversing the slow improvement they had achieved prior to the pandemic. Progress towards achievements on nutrition, health and education are being undone by the onslaught of the crisis."

 

Experts believe that previous experience handling epidemics as well as demographic factors including lower population density and a relatively young population helped many LDCs to weather the first months of the coronavirus outbreak. But the UNCTAD cautioned that a future surge in the spread of coronavirus in LDCs would pose a shock to health care systems, which remain underdeveloped.

 

The global economic recession has likely had a greater impact on LDC economies than the domestic market downturn. A major slump in global demand for products from these markets has depressed the prices of key exports. Countries whose economies depend heavily on the export of a few products, like minerals and metals or garments, have experienced particularly bad shocks as foreign trade prices and volume fell suddenly.

 

A prolonged economic crisis could also cause permanent job loss and threaten entrepreneurship in a way that would seriously harm future output potential in these countries, the report said.

Global poverty levels and food insecurity are also expected to go up, with temporary bouts of poverty becoming prolonged. The share of people in LDCs living below the $1.90 (€1.57) per day poverty line is expected to rise 3 percentage points to 35.2%, representing an additional 32 million people, the report said./DW

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